Test: Class 12 Entrepreneurship: CBSE Sample Question Papers- Term I (2021-22) - Commerce MCQ

Form of business organization which is owned financed, controlled and managed by only one person is called as sole proprietorship. All investment is made by the proprietor. The sole proprietor alone is entitled to all the profits and losses of business.

In partnership form of business the managerial ability and continuity is limited as there are limited number of partners engaged in business with limited amount of capital.

Description of business Venture generally begins with the "mission statement" by the entrepreneur describing the size, scope and nature of the enterprise.

A company is created by law. Though, it has no body and no conscience, it still exists as a person, having a distinct personality of its own. Because like a human being it can buy, sell and own property, sue others, be sued by others, hence called as an artificial person.

Customer is a part of micro environmental factor.

An internal operational plan contains planning details for the guidance of management and workers.

Minimum 7 members and maximum unlimited members are there in a public company.

Company being an artificial person affixes every document with common seal as its signature to authenticate the document.

Environment analysis is the process of monitoring the economic and noneconomic environment, to determine the opportunities and threats to an organisation. Successful scanning catches important changes, and an entrepreneur easily proceed to the next stage of product or service identification. Only environmental scanning makes a project viable and enterprise sustainable in the long run.

A mutual agency is a legally binding relationship entered into by business partners, which gives each partner authority on behalf of the business.

Service sector is the most growing field these days, the world over, thanks to emerging knowledge societies and advancements in Information and Technology. So, new opportunities can be identified by understanding the linkages to different business activities.

Form of business organization which is owned financed, controlled and managed by only one person is called as sole proprietorship. All investment is made by the proprietor. The sole proprietor alone is entitled to all the profits and losses of business.

The third stage in process of innovation is Implementation. At this stage, the creative idea is given a practical shape through observation, product design, manufacturing or services.

Sole Proprietorship business does not have an identity separate from the owner. Death, insanity, imprisonment, physical ailment or bankruptcy of the sole proprietor will have a direct and detrimental effect on the business and may even cause closure of the business.

Minimum paid up capital for private company is ₹ 1,00,000.

Creativity provides stimulus for opportunity discovery and new venture creation.

The successful entrepreneur will make sure there is a constant flow of new ideas and a commitment to try out at least some of these new ideas and business opportunity.

Proforma investment decision indicates the different assets in which the funds are to be invested so as to maximize the return.

Product identification is an entrepreneurial idea leading to a definite product after opportunity spotting and scanning of the environment.

A private company can start its business right after getting the certificate of incorporation, whereas a public company needs a certificate of commencement to start its business.

Scanning external environment can help in identifying threats and opportunities which further helps an entrepreneur to form plans and policies.

One of the demerits of Sole Proprietorship is that it has a limited area of operation as there is only the owner who handles all the responsibilities. 

A private company has a restriction to invite share applications from public. 

Company form of business organisation can be incorporated with a minimum of 7 members.

A private company:

1. (has a minimum of two and a maximum of fifty members excluding its past and present employees.
2. restricts the right of its members to transfer shares.
3. prohibits an invitation to the public to subscribe for any shares or debentures of the company, or accept any deposits from persons other than its directors, members or relatives.
4. has a minimum paid up capital of one lakh rupees (subject to change).
5. uses the word 'Pvt. Ltd.' at the end of its name.

Variable cost per unit

A hopeful, entertaining slide show and oral narrative that is meant to trigger discussion and interest potential investors in reading the written presentation, i.e. the executive summary and a few key graphs showing financial trends and key decision-making benchmark.

As the financial plan must explain to any potential investor how the entrepreneur plans to meet all financial obligations and maintain its liquidity in order to either pay off debt or provide good return on investment.

Products can be derived from sun, wind, soil, water and other natural resources.
In this case, organic farming is a product of natural resources.