Test: Nature & Significance Of Management - 3 - Commerce MCQ

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.

The two broad categories of business activities are industry and commerce.

Options B, C and D are the factors behind starting a business.

Option A is wrong as profit is the reward for risk bearing. 

Human activities are of two types economic and non-economic.

Economic activities may be classified into business, profession and employment.

Commerce includes activities relating to trade and auxiliaries to trade.

The correct option is A.

Working out of sentiments  or patriotism or sympathy pays nothing.It is out of concern and does not involve money to be received in return. So, its a non economic activity. Since teaching involves payment of salary . Hence it it an economic activity.

The given statement is false as Earning of profit is considered to be the prime objective of business. Profit earning: One of the main purpose of business is to earn income by way of profit.

Transfer of interest i.e. transfer of ownership is only possible in case of business with some legal formalities.A person engaged in profession cannot transfer his professional certificate to any other person ,so transfer of interest is not possible in profession.Similarly An employee cannot transfer his job to anyother person because he has got the job due to special skills ,knowledge and qualification which are nontransferable.