Test: Nature And Purpose Of Business - 1


10 Questions MCQ Test Business Studies (BST) Class 11 | Test: Nature And Purpose Of Business - 1


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This mock test of Test: Nature And Purpose Of Business - 1 for Commerce helps you for every Commerce entrance exam. This contains 10 Multiple Choice Questions for Commerce Test: Nature And Purpose Of Business - 1 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Nature And Purpose Of Business - 1 quiz give you a good mix of easy questions and tough questions. Commerce students definitely take this Test: Nature And Purpose Of Business - 1 exercise for a better result in the exam. You can find other Test: Nature And Purpose Of Business - 1 extra questions, long questions & short questions for Commerce on EduRev as well by searching above.
QUESTION: 1

Which of the following does not characterise business activity?

Solution:

Salary or wages is not a characteristic of business. In a business activity, the entrepreneurs work for themselves, solely for the profit motive. A business involves production and exchange of goods and services. Risk is also involved in carrying on a business because of the unpredictable events associated with it. 
Hence, the correct answer is option (d).

QUESTION: 2

Which of the broad categories of industries covers oil refinery and sugar mills?

Solution:

An oil refinery and a sugar factory are categorized as secondary industries as their raw materials (crude oil and sugarcane) are processed into finished goods (oil and sugar).
Hence, the correct answer is option (b).

QUESTION: 3

Which of the following cannot be classified as an auxiliary to trade?

Solution:

Mining cannot be classified as an auxiliary to trade. This is because it does not facilitate trade but in fact forms the basis of trade. Mining is classified as a primary industry as it involves the extraction of natural resources.
Hence, the correct answer is option (c).

QUESTION: 4

The occupation in which people work for others and get remunerated in return is known as:

Solution:

Employment is a business activity in which people are hired and are remunerated in return. Those engaged in a business or a profession work with the main motive of earning a profit for themselves.
Hence, the correct answer is option (b).

QUESTION: 5

The industries which provide support services to other industries are known as

Solution:

Tertiary industries provide facilities to primary and secondary industries, such as transport and banking, to enable them to function.
Hence, the correct answer is option (c).

QUESTION: 6

Which of the following cannot be classified as an objective of business?

Solution:

Investment is not an objective of business. Rather, it is a basic requirement of every business. It is the profit motive that serves as the sole objective of every business activity. Business enterprises also need to improve their productivity and engage in research and development activities for innovating new products to be able to sustain themselves in the market. Thus, increasing productivity, innovating and earning a profit are objectives of business. However, investment cannot be considered as a business objective.
Hence, the correct answer is option (c).

QUESTION: 7

Business risk is not likely to arise due to

Solution:

Good management enables an enterprise to achieve new milestones and does not bring on a business risk. Changes in government policy, dishonesty on the part of employees and power failure can lead to losses and thus are considered business risks.
Hence, the correct answer is option (d).

QUESTION: 8

The term business is derived from the word ______________

Solution:

The word business is derived from the word BUSY. In simple words the act of being busy can be said to be busy+ness i.e. Business.

QUESTION: 9

Business is considered to be _________________

Solution:

Economic activity is one which is carried for the purpose of earning profits Business no doubt honours social and political aspects but its chief objective is to earn profits .

QUESTION: 10

The possibilities of inadequate profits or even losses due to uncertainties are known as ____________

Solution:

The possibilities of inadequate profits or even losses due to uncertainties are known as business risk.Business risk refers to the possibility of inadequate profits or even losses due to uncertainties or unexpected events.