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


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


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Attempt Test: Class 12 Entrepreneurship: CBSE Sample Question Papers- Term I (2021-22) | 60 questions in 90 minutes | Mock test for Class 12 preparation | Free important questions MCQ to study Sample Papers for Class 12 Commerce for Class 12 Exam | Download free PDF with solutions
QUESTION: 1

"One-man control is best in the world if that man is big enough to manage everything." This statement holds true for _________________ form of business organization.

Solution:

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.

QUESTION: 2

Partnership form of organisation was developed due to the inherent limitations of sole proprietorship. One of them is limited capital, identify the other two?

Solution:

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.

QUESTION: 3

___________ section of the business plan generally begins with the "mission statement" by the entrepreneur describing the size, scope and nature of the enterprise.

Solution:

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

QUESTION: 4

A Company is called an artificial person because_________.

Solution:

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.

QUESTION: 5

Which of the following factors does the macro-environment not include?

Solution:

Customer is a part of micro environmental factor.

QUESTION: 6

Which of the following formats of business plan is not targeted towards the external stakeholder?

Solution:

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

QUESTION: 7

What is the minimum number of members required to start a public company?

Solution:

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

QUESTION: 8

A company generally affixes a ________ in most of it’s documents.

Solution:

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

QUESTION: 9

An idea should eventually lead to success of the venture of an entrepreneur. Which among the following ideas will an entrepreneur have to select?

Solution:

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.

QUESTION: 10

(i) Each partner is liable for acts performed by other partners.
(ii) Each partner can bind other partners and the firm by his acts done in the ordinary course of business.
Which feature of partnership is highlighted by these two statements?

Solution:

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

QUESTION: 11

Nelson started an AC repair shop in his area after doing a diploma course. What idea field is it?

Solution:

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.

QUESTION: 12

Karan has learnt the art of zardozi work from his grandfather and father. He opened a designer boutique exclusively for bridal wear all by himself. He introduced new designs in his work which is highly appreciated by everyone.
What form of business organisation is operated by him?

Solution:

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.

QUESTION: 13

Identify the third element in the innovation process from the given options.

Solution:

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.

QUESTION: 14

As per law, a business and owner are one and same in case of sole proprietorship. What characteristic does this imply?

Solution:

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.

QUESTION: 15

What is the minimum paid up capital required to start a private ltd. company?

Solution:

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

QUESTION: 16

Which is the first stage in the process of innovation?

Solution:

Creativity provides stimulus for opportunity discovery and new venture creation.

QUESTION: 17

What is the basic test of a successful entrepreneur?

Solution:

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.

QUESTION: 18

___________ component of a financial plan helps to ascertain the highest possible returns on investment.

Solution:

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

QUESTION: 19

Identify the third stage in Opportunity Project Interface.

Solution:

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

QUESTION: 20

Which form of business organisation can commence business immediately after incorporation?

Solution:

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.

QUESTION: 21

What can serve as a basis for formulation of strategies and policies?

Solution:

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

QUESTION: 22

Sara had established a home-made papad business in Pune. Papads made by her were very popular in her locality but being the sole owner and manager of business, she could neither introduce many flavours because of limited financial resources.
Which of the following characteristic of her business, does this situation imply?

Solution:

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. 

QUESTION: 23

Which of the following feature applies ONLY to a public company?

Solution:

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

QUESTION: 24

Which statement is NOT correct about the company form of business organisation?

Solution:

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

QUESTION: 25

As an entrepreneur begins gathering all this information regularly, they will start to develop a "trend-spotter mind." As they absorb and mull about what they have read, heard and observed, they will start to make connections and observations that will lead to business-boosting insights. What type of trend spotting is this?

Solution:
QUESTION: 26

Priya owns a company called Sunshine Estate Pvt. Ltd. Siddhi and Siddhika are other two members of the company. The company has 130 employees. Total yearly turnover of Sunshine Estate is ₹ 10 crore. Total paid up capital is ₹ 10 lakh. The shares of members cannot be transferred. Is the company eligible to be termed as a private company?

Solution:

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.
QUESTION: 27

Manoj is engaged in manufacturing air conditioners. The following information is available to you:

Solution:

Variable cost per unit

QUESTION: 28

Reliance Industries in its AGM of 2021 shows a power point presentation of performance of FY 2021 and future plans of including the chairman of Saudi Aramco as independent director in Reliance. It has a new project to invest in ₹ 75 thousand crore to start green energy segment, which was explained by Mukesh Ambani himself through this presentation. What format of business plan did he use?

Solution:

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.

QUESTION: 29

Gaurav Gupta co-founder of Zomato Ltd. made a plan to share all the details about revenue, funds and their utilisation, liquidity and how they are planning to meet their financial obligations while taking the company public for the potential shareholders. What plan did he lay out?

Solution:

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.

QUESTION: 30

Amit observes that the changed lifestyle of the people has made them workaholic and because of this they have become prone to various diseases. They rely on medicines for every little health problem. Allopathy medicines have side effects and people hesitate to consume them. He decides to make herbal medicines and sell them in the market. His herbal remedies worked well and so he decides to grow these herbs himself in order to reduce cost. Which idea field did Amit used for his business?

Solution:

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

QUESTION: 31

A grocery store sold in a day different quantity of different products at the prices indicated against them :

The shopkeeper also found, based on the number of bills issued by him, that there were 50 customers. If customer is the unit sale, what is the “Unit Price” in the above case?

Solution:

Unit Price 

QUESTION: 32

Routing, scheduling, dispatching, follow-up, inspection, and shipping are elements of __________.

Solution:

The operation plan, in a way is planning: (i) For production in advance of operations.
(ii) Establishing the exact route of each individual item, part of assembly.
(iii) Setting starting and finishing dates for each important assignment/work.
(iv) Regulating the orderly movement of goods through the entire manufacturing cycle i.e., right from procurement of all materials to the shipping of finished goods.

QUESTION: 33

Rima and Soha wanted to start a business. They have done their MBA from IIM Ahmedabad. Rima is a finance expert and Soha is sales specialist. They wrote down all the things they will need to take care of for the business like – suppliers, logistics, target market, funding, production, sales techniques, and all other things which they will encounter during the course of the business to find the solution to each and run business smoothly. What is the document on which all details are written is called?

Solution:

The business plan is a comprehensively written down document prepared by the entrepreneur describing formally all the relevant external and internal elements involved in starting a new venture.

QUESTION: 34

Samy and Tanmay want to start a business but both are from under privileged areas, both of them does not have huge amount of money to start a business but have an idea of a tech company that can bring revolution in the market. You are a chartered accountant friend of Samay and Tanmay. They come to you for an advice about how to start their business after telling you the whole situation.
What form of business enterprise would you suggest them?

Solution:

Resources and the life span of both sole proprietorship and partnership form of organisation stands limited with liabilities being unlimited. To comply with these growing needs, the demand was on rise for:

  1. Capital
  2. Managerial talent and skills
  3. Limited liability

Thus, joint stock company as a modern form of business organisation emerged to meet the requirements of large sized business.

QUESTION: 35

Assertion (A): The relation of partnership arises from contract and not from status.
Reason (R): The business of partnership can be carried on by all the partners or any one of them acting for all.

Solution:

Partnership is the result of a contract. It does not arise from status, operation of law or inheritance.

QUESTION: 36

People in India love to travel in trains but the food served in rains sometimes ruins their travel experience and the food sometimes is not even properly cooked or hygienic. Dominos got to know this and started to deliver pizzas to trains via online booking. The idea boosted the sales of Dominos to next level. What did Dominos identify?

Solution:

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.

QUESTION: 37

Sanjiv was developing a business plan for his organization. While working on the financial plan he realised that his financial requirements will be for fixed assets and their installations, preliminary expenses, working capital, expenses on research and development and investment in short-term assets viz. raw material, level of cash, etc. To decide on the sources of funds for the venture, he tried to ensure the selection of the best overall mix of financing for the enterprise.
Identify the element/s of financial plan discussed here.

Solution:
QUESTION: 38

A ________is a roadblock in a situation, something that sets up a conflict and forces you to find a solution. When an entrepreneur identifies such a road, block, he/she is said to have identified the problem.

Solution:

Problem identification is part of the scientific method, as it serves as the first step in a systematic process to identify, evaluate a problem and explore potential solutions.

QUESTION: 39

 Match the following with the given examples: 

Solution:
QUESTION: 40

PAN is a _____________________ digit alpha numeric code issued by income tax department

Solution:

Permanent Account Number abbreviated as PAN is a unique 10-digit alphanumeric number issued by the Income Tax Department to Indian taxpayers.

QUESTION: 41

Assertion (A): There is a constant and consistent effort on the part of all entrepreneurs to improve the products and services already existing in the markets.
Reason (R): A product or service may be desired from forest resources, agriculture, horticulture, mineral, animal husbandry, wind, sun and human resource.

Solution:

A business opportunity or idea often comes from everyday problems that someone solves. Successful businesses find a need and fill it by providing a service or a product. Entrepreneurs who look at ways to make an existing product or service better can be as successful as those who create or invent products.

QUESTION: 42

Match the elements of operational plan with their meaning.

Solution:
QUESTION: 43

Paranshu was working with Hitesh, a new entrepreneur, as a Production Manager. To achieve the objectives, he issues necessary orders and guidelines to his subordinates pertaining to work and they give practical shape to the production plan. Identify the element being discussed above which is related to one of the components of a ‘Business Plan’.

Solution:

The process of initiating production in accordance with preconceived production plan is said to be dispatching. This includes issuing necessary orders instructions, guidelines and/or information to work pertaining to giving practical shape to the production plan.

QUESTION: 44

Which of the following is the reward for undertaking a business activity?

Solution:

Business is a continuous human economic activity with an objective to earn profit by producing, buying and selling of goods and services. Profit is the reward for undertaking a business activity as no business can survive for long without earning profits. The sole purpose of business is the maximization of profit. If a business can’t produce profit, it is expected of it to go downhill financially. Therefore, the businessman does all the possible tricks to maximize its profits by increasing the volume of sales or decreasing the costs.

QUESTION: 45

YELLOW televisions sells 24" colour television at ₹ 5,000. The variable cost incurred in manufacturing these televisions are ₹ 2,000. Fixed expenses amounts to ₹ 4,000. What will be the break-even quantity for the 24’ television?

Solution:

QUESTION: 46

Which of the following statement is incorrect with regards to Private Ltd. Company?

Solution:

In spite of certain restrictions imposed on a private company, it enjoys certain privileges under the Companies Act. A substantial number of entrepreneurs prefer to form a private company because only two members are required to form a private company. It is not necessary for a private company to issue a prospectus, whereas it is mandatory for a public company.

QUESTION: 47

Members of the Joint Stock Company have no right to participate directly in the day to day management of the company. They elect representatives called directors. Which feature of the company is highlighted in the above statement.

Solution:

Members of the Joint Stock Company have no right to participate directly in the day to day management of the company. They elect representatives called directors who manages the company’s affair on their behalf.

QUESTION: 48

Carefully identifying the product or service features, design as well as the resources that will be needed forms a part of which of the following?

Solution:

It is the stage which involves identifying :

  • Product design
  • Market Strategy
  • Financial needs
QUESTION: 49

Varun is a polytechnic college graduate. He is specialised in repairing electronic goods. After few months of his graduation he started working in a small factory of manufacturing electronic circuits. The owner told Varun that he could no longer run the factory so he decided to give it to Varun for a minimum consideration. The factory had two workers and they were doing fine, but one fine day Varun got a huge order of supplying 15,000 circuits every month to a popular electronic goods manufacturing company in India. He knew that to meet the orders timely he has to employ more people. Identify the type of planning Varun will have to work on:

Solution:

Every organisation comes into existence when a number of person join hands. All these people work to achieve the organisational goals set by the entrepreneur. Human resource is a most important part for success of any organisation.

QUESTION: 50

During the outbreak of COVID-19 in 2020 all the governments had made wearing mask and hand gloves and keeping sanitisers with them always mandatory, Sameer an MBA graduate knew that the sale of sanitisers masks and hand gloves will boom. So Sameer took a loan of ₹ 10,000 from his father and started buying mask sanitisers and hand gloves from the wholesale market and sold in the retail locality at good profits. Within no time Sameer had made a huge amount of money by which he decided that he will start his own trading firm. What quality of an entrepreneur did Sameer show?

Solution:

There are a lot of opportunities in the world of business, which everyone might not be able to spot. And entrepreneurs should be able to spot it.

QUESTION: 51

Kishan is a fast food stall owner used to sell his fast food near the office of Wipro. One day he saw a bunch of school students going in a car and eating fast food. He got an idea. Next day he took his stall near a school during the lunch time. A bunch of students came to his stall and purchased fast food. That day Kishan had sold double the quantity he used to sell daily in just two hours. Kishan knew that the school is the perfect place to put his tall and do his business. What element of business opportunity did Kishan identify?

Solution:

Assured market scope means an entrepreneur knows that he is going to get hundred percent business from a particular opportunity.

QUESTION: 52

Krishna is a therapist. He treats people with depression anxiety, panic, attacks, and all other kinds of bad feelings and psychological problems one is facing. He is also a motivational speaker who boost up the morale of a person willing to quit. He is the best at what he does. He cures trauma and all other pain which are not physical and not easily visible. Which type of economic activity is this? 

Solution:

Profession is that occupation in which one professes to have acquired specialise knowledge, which is used either in instructing come and guiding or advising others.

QUESTION: 53

Gopesh, Poonam and Kritesh Singh enters into agreement to run an event management firm by sharing profits and losses equally. They had written down the specific duties of each of them on stamp and got the firm registered. Poonam takes on the position of president of the firm and the client servicing part of the business where is Gopesh and Kritesh, will do the production and operation. Which form of business enterprise is mentioned in above case?

Solution:

Partnership is an association of two or more persons to carry on, as coowners, a business and to share its profits and losses.

QUESTION: 54

King C Gillette it invented the disposable razor and started the Gillette company, which is a multibillion business today. But way back in 1901, deluxe fledging company was $12,500 in debt – a lot of money then. Gillette creditor had lined up to get their money. King C Gillette penned down all the potential investment, ways to reduce debt, raise funds, how the funds will be disbursed, what amount of funds available and all the money related things and made a plan of action to get through the situation and the rest is history. What kind of plan did Gillette pen down?

Solution:

Sound financial plan discusses financial requirement, sources of raising fund, exact assessment, potential investment, economic feasibility, general financial wellbeing.

QUESTION: 55

Salim a newly appointed manager in Rawal Ltd. was given a task to ensure that the sales of company grow to higher levels. For this particular task Salim went through all previous records of the company and all the future forecast about the sales of the company. Salim read all the details about the market and competitors of Rawal Ltd. He researched about all the new technology in the market and all the financial resources which can be used by him. He found out each and everything resource that could be used to complete his particular task. Which importance of environmental scanning are mentioned in the case?

Solution:

If the company has thorough knowledge of external environment, it can tap raw material, technology and even financial resources from the market at economical prices at the right time.

QUESTION: 56

It all started in December 1946 with a group of farmers’ keen to free themselves from intermediaries, gain access to market and thereby ensure maximum returns of their efforts. Based in the village of Anand, the Khera District Milk Cooperative Union, better known as Amul expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network now covers 21,20,000 farmers, 10,411 village level milk collection centres and 14 district level plants. Amul is the common brand for most product categories produced by various unions, like liquid milk, milk powder, butter, ghee, cheese, cook a product, sweet, ice-cream, and condensed milk. Amul sub-brands include variant such as Amul spray, Amul spree, Amulya, and Nutramul. What type of business enterprise is Amul?

Solution:

Cooperative Society is a form of organisation where in person voluntarily associate together as human beings on the basis of equality for the promotion of an economic interest for themselves.

QUESTION: 57

Kaushik joined a media house that publishes a magazine about finance every month. It covers articles related to stocks mutual funds and other different class of assets. Kaushik had joined the mutual fund division of the magazine. His divisional head explained him the nature of work of the division. He also informed Kaushik that in addition to visit to mutual fund companies he would have to attend the new launches of NFOs and other mutual funds on the last Friday of every month. Identify the way of spotting trend the divisional head explains to Kaushik. 

Solution:

Entrepreneur get involved in specific industry’s trade association and in attending events and in talking to customers both online and offline. They also take advantage of social networking tools like LinkedIn and Facebook.

QUESTION: 58

Prabhu was a talented artist. He started his own furniture business. His designs were very unique. People loved his designs. Eventually Prabhu’s business became a huge success. Prabhu wanted to expand his business. For this purpose, he needed funds so he decided to sell a particular percentage of his share through the medium of an initial public offer. Where the interested parties, apply for his company’s share. He also appointed 8 members for the company. All of them were specialised in some aspect of business including himself. The paid up capital of company was ₹ 25 lakh. Which kind of company is mentioned in above case?

Solution:

A public company has minimum seven members. It does not restrict transfer of any share, invite public to subscribe its shares, debenture and public deposit. It has minimum paid-up capital of five lakh rupees and uses the word Ltd. at the end of its name.

QUESTION: 59

Dipender was working in an IT company. Food near the area was not good. He thought of making a collection of best 100 restaurants in the city so that he could order food from the places. He then collected all the data and put that up on a website made by him. Within no time the website became a big hit which later lead him to think of an ideal business opportunity and he opened a food delivery company. Which factor of sensing opportunity is discussed in the case?

Solution:

Creativity is innovating a solution and vision. The entrepreneur should be able to creatively identify an idea to generate a valuable solution to a problem. Once the solution is identified their vision to convert the solution into business opportunity helps them to move forward, overcoming all the obstacles.

QUESTION: 60

Ranbir wants to start a business. He is not sure of the type of business he should start so he asked suggestions from his friend. His friend gave him reports and industry updates. He started reading and looking for the required information in the reports. He also interacted with two people for the type of product they would like to use in future. In addition to this he visited trade fairs, malls, exhibitions, to assess the ongoing trends. He understood one thing that the suppler of the raw material is just three and they have formed a syndicate and they charge vague prices from the new entrants. Which type of environmental factor is discussed in the case?

Solution:

The elements of the micro environment are closely associated with the company and they do not affect all the companies operating in the industry, in a similar manner, as some factors are specific to the firm.

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