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Sole Proprietorship Multiple-Choice Questions (MCQs)
Sole ownership, otherwise called a sole tradership, individual business venture, or ownership is a kind of big business possessed and run by one individual and in which there is no legitimate differentiation between the proprietor and the business substance. A sole merchant doesn't really work alone - it is feasible for the sole dealer to utilize others.
Sole Proprietorship MCQs: This section contains multiple-choice questions and answers on Sole Proprietorship. It will help the students to prepare well for their exams and to test their skills on Sole Proprietorship.
List of Sole Proprietorship MCQs
1. What is a Sole Ownership?
- Company owned by Government
- Company owned by a group of people
- Company owned by a single person
- Company owned by a dormant
Answer: C) Company owned by a single person
Explanation:
Sole ownership, otherwise called a sole tradership, individual business venture, or ownership, is a kind of big business possessed and run by one individual and in which there is no legitimate differentiation between the proprietor and the business substance. A sole merchant doesn't work alone—it is feasible for the sole dealer to utilize others.
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2. A Sole Ownership firm is owned by?
- Single Person
- Group of Persons
- Managing Committee
- Government
Answer: A) Single Person
Explanation:
Sole ownership, otherwise called a sole tradership, individual business venture or ownership, is a kind of big business possessed and run by one individual.
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3. In which case a sole ownership firm is most favourable?
- Large Scale Operations
- Medium Scale Operations
- Small Scale Operations
- None of the above
Answer: C) Small Scale Operations
Explanation:
In the sole ownership the size of tasks is little. The proprietor can have direct contact with clients and workers. He can know the relations and inclinations of purchasers. It empowers him to roll out vital improvements in the quality and plan of his items.
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4. What is the profit-sharing in a sole proprietorship firm?
- None
- Equally among partners
- Equally among all the employees
- No profits
Answer: A) None
Explanation:
In a sole proprietorship firm, there is no profit sharing because only one person is the owner of the firm and he is not liable to share the profits.
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5. What is the liability of a sole proprietorship firm owner?
- Limited
- Unlimited
- No Liability
- Restricted Liability
Answer: B) Unlimited
Explanation:
Sole owners and accomplices have a limitless obligation. The limitless responsibility implies that assuming you can't reimburse the obligations of the business, your loan bosses can pursue whatever you own.
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6. A sole proprietorship firm owner has a cut off in which of the following abilities?
- Owner
- Managerial
- Worker
- None
Answer: B) Managerial
Explanation:
A sole owner likewise has a restricted managerial capacity. He can't be a specialist in every one of the fields of the business. Besides, restricted assets might imply that he can't enlist able individuals to take care of him. Accordingly, the business might experience the ill effects of botch and helpless choices.
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7. What is the disadvantage of being a sole proprietorship firm owner?
- Personal Control
- Easy Formation
- Unlimited Liability
- Faster Decision Making
Answer: C) Unlimited Liability
Explanation:
As a sole owner, you will have a limitless risk for any obligations of the business. This implies that, on account of a claim, someone could come later your resources just like your business resources.
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8. Does a sole proprietorship firm need to publish its accounts?
- Yes
- No
Answer: B) No
Explanation:
Since a sole proprietorship firm does not come under government regulation hence they don't need to publish the accounts.
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9. What is the life of a sole proprietorship firm?
- Short
- Unstable
- Long
- Stable
Answer: B) Unstable
Explanation:
Sole ownership can exist as long as its proprietor is alive and wants to proceed with the business. At the point when the proprietor passes on, the sole owner does not exist anymore. The resources and liabilities of the business become a piece of the proprietor's bequest.
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10. Is sole ownership useful for a General Store?
- Yes
- No
Answer: A) Yes
Explanation:
Sole ownership is useful for a General Store as it operates on a small scale.
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