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Test: Small Business - 2 - Commerce MCQ


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20 Questions MCQ Test Business Studies (BST) Class 11 - Test: Small Business - 2

Test: Small Business - 2 for Commerce 2024 is part of Business Studies (BST) Class 11 preparation. The Test: Small Business - 2 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Small Business - 2 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Small Business - 2 below.
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Test: Small Business - 2 - Question 1

Any industry located in a rural area which produces any goods, renders any service with or without the use of power is known as ________

Detailed Solution for Test: Small Business - 2 - Question 1
Explanation:
In a rural area, industries that produce goods or provide services with or without the use of power are known as village industries. These industries are typically smaller in scale and are often based on traditional methods and techniques. They play a crucial role in the development of rural areas by creating employment opportunities and contributing to the local economy. Village industries can vary widely, including agriculture, handicrafts, textiles, food processing, and more. These industries are essential for the sustainable development of rural areas and help in reducing migration to urban centers.
Test: Small Business - 2 - Question 2

________ are also known as Rural industries or Traditional industries

Detailed Solution for Test: Small Business - 2 - Question 2
Rural Industries or Traditional Industries
Traditional industries, also known as rural industries, are characterized by their reliance on traditional methods of production and their location in rural areas. These industries typically involve small-scale production and are often based on traditional skills and knowledge passed down through generations. Some examples of traditional industries include handloom weaving, pottery, handicrafts, and traditional food processing.
Characteristics of Rural Industries
- Reliance on traditional methods: Traditional industries often use age-old techniques and tools for production, preserving the cultural heritage of the region.
- Small-scale production: These industries are typically operated by small-scale entrepreneurs or artisans, often working from their homes or small workshops.
- Location in rural areas: Rural industries are usually located in rural or semi-rural areas, where the availability of raw materials and low-cost labor is higher.
- Manual labor: Traditional industries rely heavily on manual labor, with artisans often specializing in specific skills and crafts.
- Sustainable practices: These industries often follow sustainable practices, utilizing locally available resources and promoting eco-friendly production methods.
Advantages of Rural Industries
- Preservation of traditional skills and knowledge: Rural industries contribute to the preservation of traditional crafts and skills, ensuring their continuity for future generations.
- Employment generation: These industries provide employment opportunities in rural areas, reducing migration to urban areas and promoting balanced regional development.
- Cultural identity: Traditional industries help in preserving the cultural identity and distinctiveness of a region, showcasing its unique heritage and craftsmanship.
- Income generation: Rural industries contribute to the income generation of artisans and small-scale entrepreneurs, improving their standard of living.
Challenges faced by Rural Industries
- Lack of infrastructure: Rural industries often face challenges related to inadequate infrastructure, such as lack of proper transportation, power supply, and marketing facilities.
- Limited market access: Traditional industries may struggle to find markets for their products, especially due to competition from mass-produced goods and limited marketing resources.
- Skill gaps: The younger generation may show less interest in traditional crafts, leading to a shortage of skilled artisans and a decline in traditional industries.
- Limited access to finance: Small-scale entrepreneurs in rural areas often face difficulties in accessing financial resources and credit facilities for expanding their businesses.
Overall, rural industries or traditional industries play a vital role in preserving cultural heritage, generating employment, and promoting sustainable development in rural areas. Efforts to support and promote these industries can contribute to the overall socio-economic growth of rural communities.
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Test: Small Business - 2 - Question 3

Which of the following is organised by individuals?

Detailed Solution for Test: Small Business - 2 - Question 3
Organisations by Individuals:
- Cottage Industries: Cottage industries are small-scale industries that are operated by individuals or families in their own homes. These industries typically involve the production of goods like handicrafts, textiles, pottery, and so on. Individuals organize and run these industries to generate income for themselves and their families. They usually work with limited resources and employ traditional techniques.
- Chemical Industry: The chemical industry, on the other hand, is not organized solely by individuals. It involves large-scale manufacturing and production of chemicals, pharmaceuticals, plastics, and other related products. Chemical industries are usually run by corporations or companies, which have multiple stakeholders and a hierarchical organizational structure.
- Railway Industry: Similarly, the railway industry is not organized by individuals. It is a complex and extensive network of railways, operated by government entities or private companies. The railway industry requires significant investments in infrastructure, technology, and human resources. It involves the transportation of passengers and goods on a large scale.
- None of these: The correct answer is not "None of these" because cottage industries are indeed organized by individuals. However, the chemical industry and railway industry are not organized solely by individuals.
In conclusion, cottage industries are the only option among the given choices that are organized by individuals.
Test: Small Business - 2 - Question 4

Limit of investment in small scale industry is _________

Detailed Solution for Test: Small Business - 2 - Question 4

Small scale industries are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. These industries make a one-time investment in machinery, plants, and industries, but it does not exceed Rs 1 Crore.

Test: Small Business - 2 - Question 5

Expand EOUs

Detailed Solution for Test: Small Business - 2 - Question 5

The Export Oriented Units (EOUs) scheme, introduced in early 1981, is complementary to the SEZ scheme. It adopts the same production regime but offers a wide option in locations with reference to factors like source of raw materials, ports of export, hinterland facilities, availability of technological skills, existence of an industrial base and the need for a larger area of land for the project. As on 31st December 2005, 1924 units are in operation under the EOU scheme.

Test: Small Business - 2 - Question 6

The Small Industries Development Organisation (SIDO) is also known as ____

Detailed Solution for Test: Small Business - 2 - Question 6

The Small Industries Development Organisation (SIDO), also known as the Office of the Development Commissioner which is attached to this ministry is responsible for implementing and monitoring of various policies and programmes formulated.

Test: Small Business - 2 - Question 7

Expand DIC

Detailed Solution for Test: Small Business - 2 - Question 7
Definition: DIC stands for District Industries Centers.
Explanation:
District Industries Centers (DIC) are government organizations that are responsible for promoting and supporting industrial development at the district level. They play a crucial role in providing assistance, guidance, and support to entrepreneurs and industries in their respective districts.
Functions of DIC:
DICs have various functions and responsibilities, including:
1. Promotion of industries: DICs work towards the promotion of industries in their district by identifying potential sectors and encouraging entrepreneurs to set up new ventures.
2. Entrepreneurship development: They provide training and skill development programs to aspiring entrepreneurs, helping them in starting and managing their businesses successfully.
3. Project identification and appraisal: DICs evaluate project proposals and provide technical and financial assistance for viable projects. They also help in project formulation and preparation of feasibility reports.
4. Financial assistance: DICs facilitate access to financial assistance schemes and subsidies offered by the government for industrial development. They help entrepreneurs in availing loans and grants for their projects.
5. Infrastructure development: DICs play a role in developing industrial infrastructure in their districts by identifying suitable land, setting up industrial estates, and providing basic amenities like power, water, and transportation.
6. Marketing and export promotion: They assist industries in marketing their products and exploring export opportunities by organizing trade fairs, exhibitions, and buyer-seller meets.
7. Entrepreneurial counseling and guidance: DICs provide counseling and guidance to entrepreneurs regarding various aspects of business management, including finance, marketing, production, and legal compliance.
8. Monitoring and evaluation: DICs monitor the performance of industries in their district and evaluate their progress. They provide necessary support and interventions for the growth and sustainability of industries.
Conclusion:
District Industries Centers (DIC) are instrumental in promoting and supporting industrial development at the district level. They provide a range of services and assistance to entrepreneurs and industries, contributing to the overall economic growth and development of the region.
Test: Small Business - 2 - Question 8

Expand KVIC

Detailed Solution for Test: Small Business - 2 - Question 8
Expand KVIC: Khadi and Village Industries Commission

  • What is KVIC?

  • KVIC stands for Khadi and Village Industries Commission. It is an apex organization under the Ministry of Micro, Small, and Medium Enterprises (MSME) in India.



  • Role of KVIC:


    • Promotes the development of Khadi and village industries in rural areas.

    • Provides financial assistance and support to artisans, weavers, and entrepreneurs involved in these industries.

    • Implements various schemes and programs to enhance the productivity and competitiveness of Khadi and village industries.

    • Creates employment opportunities, especially in rural and semi-urban areas.

    • Preserves and promotes the traditional art and craft heritage of India.

    • Markets and promotes Khadi products through its network of Khadi institutions and retail outlets.

    • Organizes training programs and workshops to skill artisans and entrepreneurs.



  • Importance of Khadi and Village Industries:


    • Khadi represents the freedom movement of India and is a symbol of self-reliance.

    • Village industries utilize local resources, provide sustainable livelihoods, and contribute to rural development.

    • They promote eco-friendly and sustainable production practices.

    • They play a crucial role in preserving traditional skills and crafts.

    • Khadi and village industries contribute to the national economy and promote inclusive growth.



  • Key Initiatives by KVIC:


    • Prime Minister's Employment Generation Programme (PMEGP): Provides financial assistance for setting up new ventures in Khadi and village industries.

    • Honey Mission: Promotes beekeeping and honey production as a means of livelihood.

    • Khadi Reform and Development Program (KRDP): Aims to modernize and upgrade Khadi institutions.

    • Marketing Assistance Scheme: Supports marketing and promotion of Khadi products.

    • Rozgar Yukta Gaon (RYG): Aims to create model villages with sustainable employment opportunities.



By implementing various schemes and programs, KVIC plays a vital role in empowering rural artisans, promoting self-employment, and preserving the cultural heritage of India.
Test: Small Business - 2 - Question 9

Small industries contribute _______ of gross industrial value

Detailed Solution for Test: Small Business - 2 - Question 9
Small industries contribute _______ of gross industrial value:
To determine the percentage of gross industrial value contributed by small industries, we can use the given options and eliminate the incorrect ones.
- Option A: 49 percent
- Option B: 45 percent
- Option C: 48 percent
- Option D: 40 percent (Answer)
Since we are looking for the percentage of gross industrial value contributed by small industries, we want the lowest percentage. We can eliminate options A, B, and C because they are higher percentages.
Therefore, the correct answer is option D: 40 percent. Small industries contribute 40 percent of the gross industrial value.
Test: Small Business - 2 - Question 10

Which of the following is part of small scale sector?

Detailed Solution for Test: Small Business - 2 - Question 10

Small scale industries are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. These industries make a one-time investment in machinery, plants, and industries, but it does not exceed Rs 1 Crore. Paper Products and Printing, Food Products, Cotton Textiles all are part of small scale indudtries.

Test: Small Business - 2 - Question 11

Which of the following is a main problem for small business?

Detailed Solution for Test: Small Business - 2 - Question 11
The main problem for small businesses can vary depending on the specific circumstances and industry. However, some common problems that small businesses often face include:
1. Finance:
- Limited access to capital and funding
- Difficulties in securing loans or lines of credit
- Cash flow management issues
2. Raw material:
- Sourcing quality and affordable raw materials
- Managing inventory and stock levels
- Dealing with supply chain disruptions
3. Managerial skills:
- Lack of expertise in various areas of business management
- Challenges in hiring and retaining skilled employees
- Balancing multiple roles and responsibilities
4. Marketing and customer acquisition:
- Limited budget for marketing and advertising
- Competing with larger businesses with more resources
- Identifying and reaching target customers
5. Government regulations and compliance:
- Navigating complex regulatory requirements
- Keeping up with changes in laws and regulations
- Ensuring compliance with tax obligations
6. Technology and innovation:
- Adopting and integrating new technologies
- Keeping up with industry trends and innovations
- Overcoming barriers to digital transformation
7. Competition:
- Competing against larger, more established businesses
- Differentiating from competitors in a crowded market
- Developing a unique value proposition
It is important for small business owners to identify and prioritize their specific challenges in order to develop effective strategies for growth and success. Seeking support from business networks, mentors, and professional advisors can also be beneficial in addressing these challenges.
Test: Small Business - 2 - Question 12

ISO 9000 is concerned with

Detailed Solution for Test: Small Business - 2 - Question 12
ISO 9000 is concerned with Quality

The International Organization for Standardization (ISO) is an independent, non-governmental international organization that develops and publishes standards. ISO 9000 is a set of standards that focuses on quality management systems. It defines the criteria for a quality management system and provides guidance on how to implement it effectively.


ISO 9000 is concerned with ensuring that organizations consistently meet customer requirements and enhance customer satisfaction. It emphasizes the importance of a systematic approach to quality management and continuous improvement.


Key points about ISO 9000:



  • Quality Management System: ISO 9000 sets the requirements for establishing, implementing, maintaining, and continuously improving a quality management system.

  • Customer Focus: ISO 9000 emphasizes the need for organizations to understand and meet customer requirements to enhance customer satisfaction.

  • Process Approach: ISO 9000 encourages organizations to adopt a process approach to quality management, where processes are identified, managed, and improved to achieve desired outcomes.

  • Continuous Improvement: ISO 9000 promotes the concept of continuous improvement, where organizations strive to enhance their performance and achieve better results over time.

  • Auditing and Certification: ISO 9000 provides guidelines for internal and external audits to assess the effectiveness of the quality management system. Organizations can seek certification to demonstrate their compliance with ISO 9000 standards.


In summary, ISO 9000 is concerned with quality management systems and provides a framework for organizations to establish and improve their quality processes, ultimately leading to better customer satisfaction and organizational performance.

Test: Small Business - 2 - Question 13

Expand NABARD

Detailed Solution for Test: Small Business - 2 - Question 13
Expanded form of NABARD:
- NABARD: National Bank for Agriculture and Rural Development
Explanation:
NABARD stands for National Bank for Agriculture and Rural Development. It is an apex development bank in India that focuses on providing financial and developmental support to the agriculture sector and rural areas. Here is a detailed explanation of the expanded form:
- National: NABARD is a national-level institution that operates across India, providing its services to all states and union territories.
- Bank: NABARD functions as a bank, offering various financial services to individuals, organizations, and other banks. It provides loans, grants, and other financial assistance to promote agricultural and rural development.
- for Agriculture: NABARD specifically targets the agriculture sector and aims to strengthen it by providing financial aid, implementing policies, and supporting agricultural research and development.
- and Rural Development: NABARD's primary focus is on rural development. It works towards improving the quality of life in rural areas by offering financial assistance for various activities such as infrastructure development, rural entrepreneurship, and capacity building.
NABARD plays a crucial role in fostering rural prosperity and sustainable agriculture in India. It collaborates with state governments, regional rural banks, and other financial institutions to ensure the effective implementation of its programs and initiatives.
Test: Small Business - 2 - Question 14

Expand RSBDC

Detailed Solution for Test: Small Business - 2 - Question 14
RSBDC stands for Rural Small Business Development Centre.
Here is a detailed explanation of the expansion of RSBDC:
1. Rural: This term refers to areas located outside of urban or metropolitan regions. It typically includes countryside or remote areas with lower population densities.
2. Small Business: Small businesses are privately-owned enterprises that have a limited number of employees and generate a relatively low level of revenue compared to larger corporations. These businesses play a significant role in local economies and often have a more personalized approach to customer service.
3. Development: Development refers to the process of improving or growing something. In the context of RSBDC, it pertains to the enhancement and growth of small businesses in rural areas.
4. Centre: A center, in this context, is an organization or institution that provides resources, support, and services to small businesses. It serves as a hub for entrepreneurs and offers guidance and assistance in various areas of business development.
Therefore, the expansion "Rural Small Business Development Centre" (RSBDC) refers to an organization or institution that focuses on supporting and promoting the growth of small businesses in rural areas. It aims to provide resources, training, and assistance to entrepreneurs in order to enhance their business operations, increase profitability, and contribute to the economic development of rural communities.
Test: Small Business - 2 - Question 15

NABARD was setup in __________

Detailed Solution for Test: Small Business - 2 - Question 15
The establishment of NABARD
- NABARD, which stands for National Bank for Agriculture and Rural Development, was set up on July 12, 1982.
- It was established under the recommendation of the Shivaraman Committee, which was formed in 1979.
- The committee was formed to review the arrangements for institutional credit for agriculture and rural development in India.
- The establishment of NABARD aimed to provide focused and specialized financial and developmental support to the agricultural sector.
- NABARD was created as an apex development bank by an act of Parliament.
- It serves as a refinance institution for providing credit facilities to agricultural and rural development banks in India.
- NABARD's main objectives include promoting sustainable agriculture, rural development, and rural prosperity.
- It provides various financial and developmental services to support agriculture, rural industries, and rural infrastructure.
- NABARD also plays a crucial role in promoting rural financial institutions and strengthening their capacity to provide credit to rural areas.
- Over the years, NABARD has played a significant role in improving the agricultural and rural development landscape in India.
Test: Small Business - 2 - Question 16

Expand NSIC

Detailed Solution for Test: Small Business - 2 - Question 16
NSIC - National Small Industries Corporation
The expanded form of NSIC is National Small Industries Corporation. It is a government enterprise that falls under the Ministry of Micro, Small and Medium Enterprises (MSME). NSIC was established in 1955 with the aim of promoting, aiding, and fostering the growth of small scale industries in India.
Key Points about NSIC:
- NSIC provides a range of services to small enterprises, including technical support, marketing assistance, credit facilitation, and capacity building.
- The corporation offers various schemes and programs to promote the competitiveness of small businesses and enhance their access to markets.
- NSIC operates a network of Technical Service Centers (TSCs) and Incubation Centers (ICs) across the country to provide technical training, skill development, and incubation support to small industries.
- It also facilitates the procurement of raw materials and machinery for small businesses through its Single Point Registration Scheme (SPRS).
- NSIC plays an important role in the implementation of various government policies and programs related to small industries, such as the Public Procurement Policy for Micro and Small Enterprises (MSEs).
- The corporation collaborates with other organizations and institutions to facilitate technology transfer, promote innovation, and support the growth of small industries.
- NSIC has been instrumental in empowering small entrepreneurs and contributing to the overall development of the MSME sector in India.
In conclusion, NSIC stands for National Small Industries Corporation and it serves as a vital institution in promoting and supporting the growth of small scale industries in India.
Test: Small Business - 2 - Question 17

NSIC was setup in

Detailed Solution for Test: Small Business - 2 - Question 17
NSIC was setup in 1955.
NSIC, which stands for National Small Industries Corporation Ltd., was established in 1955.
Here are some key points about NSIC's establishment:
- NSIC was set up by the Government of India in order to promote and support the growth of small-scale industries in the country.
- The main objective of NSIC is to aid, counsel, assist, finance, and protect the interests of small-scale industries.
- NSIC operates under the Ministry of Micro, Small and Medium Enterprises (MSME) and is headquartered in New Delhi, India.
- Over the years, NSIC has played a crucial role in the development of small-scale industries by providing various services such as marketing support, credit facilitation, technology support, and training programs.
- NSIC also assists small-scale industries in participating in domestic and international trade fairs, exhibitions, and buyer-seller meets.
- The establishment of NSIC has significantly contributed to the growth and development of small-scale industries in India.
In conclusion, NSIC was set up in 1955 by the Government of India to support the growth and development of small-scale industries in the country.
Test: Small Business - 2 - Question 18

Expand SIDBI

Detailed Solution for Test: Small Business - 2 - Question 18

Explanation:



  • SIDBI: Small Industries Development Bank of India


The correct expansion of SIDBI is "Small Industries Development Bank of India".


SIDBI is an independent financial institution in India that aims to promote, finance, and develop small-scale industries. It was established in 1990 and is headquartered in Lucknow, Uttar Pradesh. SIDBI provides financial assistance and support to small and medium-sized enterprises (SMEs) through various loan schemes, credit facilities, and developmental programs.


Some key functions and objectives of SIDBI include:



  • Promoting and developing micro, small, and medium-sized enterprises (MSMEs)

  • Providing financial assistance to MSMEs for their growth and expansion

  • Facilitating the development of MSMEs through technology upgradation, capacity building, and skill development

  • Supporting entrepreneurship and innovation in the MSME sector

  • Collaborating with other financial institutions and stakeholders to enhance the availability of credit and other financial services to MSMEs

  • Undertaking research, policy advocacy, and knowledge dissemination related to MSME development


SIDBI plays a crucial role in the development of small-scale industries in India and contributes to the overall economic growth of the country.

Test: Small Business - 2 - Question 19

The District Industries Centers Programme was launched on

Detailed Solution for Test: Small Business - 2 - Question 19
The District Industries Centers Programme was launched on May 1, 1978.
The District Industries Centers (DIC) Programme was launched in India with the aim of promoting and developing micro, small, and medium enterprises (MSMEs) at the district level. Here is a detailed explanation of the launch of the programme:
Background:
- The Indian government recognized the importance of MSMEs in generating employment, promoting entrepreneurship, and contributing to economic growth.
- In order to provide a conducive environment for the growth of MSMEs, the District Industries Centers Programme was initiated.
Launch:
- The programme was officially launched on May 1, 1978.
- The launch date signifies the government's commitment to empowering and supporting MSMEs.
- The announcement was made by the Ministry of Small Scale Industries and Agro & Rural Industries.
Objectives:
- The main objective of the DIC Programme was to promote the development of MSMEs in each district of India.
- It aimed to provide a single point of contact for all services and support required by MSMEs, including information, training, finance, and marketing assistance.
- The programme aimed to facilitate the establishment, growth, and modernization of MSMEs in a decentralized manner.
Implementation:
- The programme was implemented through the establishment of District Industries Centers in each district across India.
- These centers acted as the nodal agency for coordinating and implementing various schemes and programs for MSMEs at the district level.
- The centers provided a range of services, including the identification of potential entrepreneurs, training programs, assistance in obtaining finance, and marketing support.
Impact:
- The DIC Programme played a crucial role in promoting the growth of MSMEs in India.
- It helped in the creation of employment opportunities, especially in rural areas, leading to inclusive economic development.
- The program also contributed to the overall industrialization and economic progress of the country.
In conclusion, the District Industries Centers Programme was launched on May 1, 1978, with the aim of promoting and developing MSMEs at the district level. The program proved to be instrumental in providing support and services to entrepreneurs, fostering economic growth, and generating employment opportunities in India.
Test: Small Business - 2 - Question 20

Exemption from paying taxes for 5 ot 10 years is known as _________

Detailed Solution for Test: Small Business - 2 - Question 20
Exemption from paying taxes for 5 or 10 years is known as Tax Holiday.
Tax holidays are a governmental incentive program that grants temporary exemption or reduction in taxes to businesses or individuals in order to stimulate economic growth and encourage investment. This policy is often used by governments to attract businesses and promote economic development in specific regions or industries.
Here is a detailed explanation of the concept of tax holiday:
1. Definition:
- Tax holiday refers to a period of time during which businesses or individuals are exempt from paying certain taxes.
- The duration of the tax holiday can vary, typically ranging from 5 to 10 years.
2. Purpose:
- The main purpose of a tax holiday is to attract investment, boost economic activity, and create employment opportunities.
- It is often used as a tool to attract new businesses or encourage existing businesses to expand their operations.
3. Eligibility:
- Tax holidays are usually targeted towards specific industries or regions that the government wants to promote.
- Eligibility criteria may include factors such as the type of business, size of investment, job creation, and location.
4. Benefits:
- Tax holidays provide businesses with significant financial incentives by reducing or eliminating their tax obligations.
- This can free up capital for investment, research, development, and hiring new employees.
- It also helps businesses remain competitive in the market and stimulates economic growth.
5. Drawbacks:
- While tax holidays can have positive effects, they also have some drawbacks.
- It can result in a loss of tax revenue for the government, which may impact public services and infrastructure development.
- There is also a risk of abuse or misuse of the tax holiday program by businesses that do not fulfill their obligations or fail to deliver the expected economic benefits.
In conclusion, a tax holiday refers to the exemption from paying taxes for a specific period of time, typically 5 or 10 years. It is a government incentive aimed at promoting economic growth, attracting investment, and creating job opportunities. However, it is important for governments to carefully design and monitor tax holiday programs to ensure that they achieve their intended goals and do not have adverse effects on public finances.
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