Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

EP > UNIT 2 > Flashcards

UNIT 2 Flashcards

1
Q

Human activities can be broadly classified into _____ and ____ activities

A

Economic and non -economic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Economic activities can be defined as____

A

An activity in which the main objective is monetary gain. It deals with production, distribution and consumption of goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Economic activities are divided into ____, _____ and _____.

A

Profession, employment and business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A non-economic activity is ______

A

An activity performed not out of monetary gain but out of love, care, self-fulfillment etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Profession can be defined as_____

A

An occupation in which a person professes to have specialized knowledge which is used for instructing, guiding or advising.
EG: doctors, lawyers etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Employment can be defined as____

A

A person is working for other and is remunerated in return. These activities are performed according to the level of employment that is agreed to.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Business can be defined as____

A

” A state of being busy or occupied”

Activities performed like production and distribution with objective of monetary gain.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

FC Hooper defines business as_____

A

A complex field of commerce and industry, basic industries, process and manufacturing and ancillary services which serve and interpenetrate the business as a whole.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

BO wheeler defines a business as____

A

An institution organized and operated to provide goods and services to society with an incentive of private gain.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Peterson and Plowman define a business as_____

A

An activity in which people trade something of value, whether it be goods or services, for mutual gain or for profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Name the characteristics of a business.

A

1) Entrepreneurs presence
2) Economic activity
3) Production and procurement of goods and services ( consumer goods, producer goods and services )
4) sale or exchange of goods and services
5) regularity
6) utility ( form utility/production, place utility /transportation and time utility/warehousing )
7) profit earning
8) uncertainty of returns
9) elements of risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Name the three types of business activities:

A

1) manufacturing
2) service
3) trading

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Manufacturing can be defined as____

A

The process of converting a raw material into a finished good.
It can happen in a free market economy, collectivist economy or a mixed market economy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Service can be defined as____

A

An intangible commodity that cannot be stored and has to be consumer at the point of sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are auxiliaries to trade ?

A

this collectively refers to commercial firm sin the service sector which indulge in banking, communication, transportation etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Trading can be defined as____

A

Buying, selling or exchanging of goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the three forms of businesses ?

A

Private sector enterprises, public sector enterprises, Joint sector enterprises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are the types of private sector companies ?

A

1) Sole proprietorship
2) Partnership
3) Joint Hindu family business
4) Cooperative societies
5) Joint stock companies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is a sole proprietorship ?

A

When an individual owns, operates and controls a business and bears the responsibility of profit and loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is a partnership ?

A

When two or more individuals form a business using personal resources.

21
Q

What is a Joint Hindu family business ?

A

When a business is owned and managed by an undivided Hindu family.

22
Q

What is a cooperative society ?

A

A voluntary association who work for the motive of welfare of the members.

23
Q

What is a joint stock company ?

A

An association of people formed to carry out business activities and it has its own legal status independent of its members

24
Q

A public sector enterprise can be defined as ______

A

A business which is owned, operated and managed by a public corporation or the government. Here, welfare is the primary motive and profit is the secondary motive

25
Q

What are the three types of public sector enterprises ?

A

1) developmental undertakings
2) public corporations
3) government companies

26
Q

What is a developmental undertaking ?

A

1) oldest, most common and most traditional form of business
2) managed by a government official and is a government department
3) government official is answerable to parliament or state legislature

27
Q

What is a public corporation ?

A

1) a corporate body with its own legal status formed under an Act by parliament of state legislature.
2) also called a statutory corporation

28
Q

What is a government company ?

A

1) established under the Indian Companies Act
2) 51% of paid up capital is held by central govt. or state govt. or partially by central and partially by state govt.
3) shares are bought in the name of the president of India

29
Q

What is a joint sector company ?

A

1) partnership between private enterprise and government enterprise
2) a business is called a joint sector company when the state industrial development corporations (SIDC’s) or the government hold 26% equity, 25% private promoter and the balance is subscribed by the general public
3) usually managed by private members but there is representation of the government in the board of directors

30
Q

The various factors an entrepreneur should take into account before selecting a type of business is:

A

1) size and nature of business
2) level of control the entrepreneur wishes to have
3) level of structure entrepreneur wants to deal with
4) vulnerability to law suits
5) tax implications
6) expected profit or loss of the business

31
Q

A private enterprise can be of two broad types which are ____ and ____.

A

Corporate and non-corporate

32
Q

A non-corporate can be defined as _____

A

1) The identity of the enterprise and the owner is not different
2) The owner bears all the profits and risks
3) can be set up without registration under governing laws

33
Q

A corporate can be defined as_____

A

1) Identity of the enterprise and the owner is not the same.
2) The owner is not liable to pay debts
3) has to be set up with registration under governing laws

34
Q

What are the types of corporates ?

A

1) Joint stock company

2) cooperative society

35
Q

What are the types of non-corporates ?

A

1) sole proprietorship
2) partnership
3) JHU

36
Q

What are the characteristics of sole proprietorship ?

A

1) Individual ownership
2) Individual management
3) Individual financing
4) unlimited liability
5) sole beneficiary
6) easy formation and closure
7) no separate legal entity
8) limited area of scope( finance and managerial availabilities )

37
Q

Sole proprietorship is a suitable form of business when:

A

1) capital is limited
2) secrecy is important
3) market for the product is local
4) involvement of artistic of customizable goods
5) size of venture is small
6) quick decision making is required

38
Q

The legalities involved while forming a sole proprietorship are:

A

1) business name
2) service tax registration ( ST-1 has to be filled if taxable services exceed 10 lakhs )
3) VAT / CST registration: VAT is for in a state and CST is for inter-state
4) PAN card number
5) bank account number
6) payment of taxes

39
Q

The characteristics of a partnership are

A

1) Two or more people must sign the contract
2) minors cannot be admitted
3) minimum number is 2, maximum is 20. In case of banking, maximum is 10
4) Agreement can be oral or written, written agreement is advisable and is called a partnership deed.
5) profit sharing
6) unlimited liability
7) implied authority
8) mutual agency
9) utmost good faith
10) restriction on transfer of shares without consent
11) continuity

40
Q

A partnership form of business is more suitable when:

A

1) capital and managerial requirements are higher
2) small or medium scale business
3) direct contact with customers is necessary

41
Q

Partnership firms in India are governed by the _______

A

The Indian Partnership Act, 1932

42
Q

Is registration compulsory for a partnership ?

A

No and it is not penalized but it is advisable

43
Q

Why should a partnership get registered ?

A

If they are not registered, the following rights are denied to them:

1) A partner cannot file suit against another partner or the firm
2) a case cannot be filed against a third party company
3) firm cannot claim a set off or other proceedings in dispute with a third party

44
Q

What are the steps a partnership should take to get registered ?

A

1) Application of registration has to be filled which includes
- Name of the firm
- Name of the place
- Name of other places
- date of joining of partners
- Full name and permanent address of all partners
- Duration of the firm
2) Formalities of registration:
- application signed by all partners
- Duly filled specimen of affidavit
- certified copy of partnership deed
- proof of ownership
3) issue of certification of registration

45
Q

What are the two schools of law governing HUFs in India ?

A

1) Dayabhaga
- west Bengal and Assam
- son acquires right in family property only after the death of the father
2) Mitaakshara
- son acquires right in property from birth

46
Q

What are the two essential conditions for the existence of an HUF ?

A

1) minimum two members in a family

2) existence of ancestral property

47
Q

What are the characteristics of HUFs ?

A

1) Creation under Hindu Law
2) Membership
3) Management
- eldest male manages affairs, Karta
- other members, coparceners
4) Liability
- Karta has unlimited liability
- Coparceners have limited liability
5) Rights of accounts ( only Karta )
6) Minor as a member ( only male members by taking birth in a family )
7) Dissolution ( mutual agreement )
8) Implied authority
- only Karta

48
Q

What are the legal formalities involved in forming a HUF ?

A

1) Capital
- ancestral property or family gifted assets
2) Members
- minimum 2
3) Suitable name
4) Form a deed
5) Apply for PAN
6) Open a bank account
7) Official stationary should be printed with HUF’s name

EP (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions