Category: Important Questions

Students get through the TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs) which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Very short answer questions

Question 1.
What are the other names for Multinational companies?
Answer:
A multinational corporation is also known as a transnational corporation namely “Global gaint (or) World enterprises (or) International enterprise.

Question 2.
What is a Multinational Firm?
Answer:
All forms of business organisation that transcend political frontiers may be called as multinational firms.

Question 3.
What do you mean by MNC?
Answer:
A Multinational company is one whose ownership is accommodated in more than one country products are manufactured and sold in many countries

Question 4.
Explain the merits of MNC?
Answer:
Merits of MNC:

1. They increase the investment income and employment in the host country.
2. They increase managerial skills.
3. They support the domestic enterprise.
4. They help in increasing the competition.
5. They try to equalize the cost of factors of production.

Question 5.
Explain the demerits of MNC?
Answer:

1. They may retard the growth of employment in the home country.
2. They may destroy competition and acquire monopoly powers.
3. MNC technology is designed for worldwide profit maximization and is not for the development of the needs of poor countries.
4. MNC’s avoid taxes by manipulating the transfer pricing.

Short answer questions

Question 1.
Mention the five criteria to define a company as an MNC?
Answer:

1. It operates in many countries at different levels of economic development.
2. Multinational manage their local subsidiaries.
3. It maintains complete industrial organisation including research and development and manufacturing facilities in several countries.
4. It has multinational central management.
5. It has multinational stock ownership.

Question 2.
MNC’s are in a position to exercise massive control over an economy substantiate.
Answer:

1. MNC’s are characterised by possessing huge financial resources. These huge financial resources give them economic power in the economy they can afford to survive even during losses as well.
2. MNC’s possess technological superiorities and are capable of conforming to international standards and quality specifications.
3. They make use of aggressive marketing strategies for their products.
4. They have an established brand image in the market.

Question 3.
Global enterprises are giant both in size and operations “substantiate this statement.
Answer:

1. It has huge capital resources.
2. It involves foreign collaboration,
3. It uses advanced technology.
4. It leads to product innovation.
5. It makes use of marketing strategies.
6. It leads to the expansion of market territory.
7. It makes uses of centralized control.

Question 4.
Multinational companies have done more harm than good. Explain.
Answer:

1. Yes, I agree that multinational companies have done more harm than good. It is clear from the following disadvantages which it is creating for the economy.
2. It disregards national priorities.
3. It leads to the creation of a monopoly.
4. It leads to the depletion of natural resources.
5. It leads to technology obsolete.
6. It creates a threat to national sovereignty.

Question 5.
Give an example of multinational companies
Answer:

1. Unilever limited.
2. Union carbide.
3. International Business Machines. (IBM).
4. Philips.
5. Coca-cola corporation.

Question 6.
What do you understand by multinational companies and explain its features?
Answer:
A multinational company is a company carrying on business in two or more countries. According to Neil H. Jacoby, “A multinational corporation owns and manages business in two or more countries.
Features:
(i) A multinational company is operated in more than one country simultaneously.
(ii) It is generally very large in size.
(iii) Its purpose is to reduce transport costs and to make use of raw materials, labour, capital and the market of foreign countries.
There are 500 to 700 MNCs operating in the world today, Half of them are U.S multinationals. The multinationals based in the USA have the largest share of foreign direct investment (FDI), followed by the U.K, Germany, Japan, Switzerland, France and Canada. In underdeveloped countries, the investment and employment created by the MNCs have been chiefly concentrated in Brazil, Mexico, Hong Kong, the Philippines, Singapore and South Korea. Latin America accounts for about 60% of the MNC employment in developing countries, followed by Asia 30% and Africa 10%. Foreign investment has moved some developing countries which offer political stability and a convenient economic environment, including tax incentives, large markets, cheap labour and easy access to oil and other natural resources.

For Own Thinking

1. Name any 2 Indian Multinational Companies abroad?
Answer:

1. Indian MNC abroad.
2. Suzuki Marathi Suzuki
3. Timex watches.

2. Name any 2 Foreign Companies in India?
Answer:

1. Coca-cola corporation.
2. International Business Machine.

For Future Learning

Multinational companies establish themselves in developing countries to enjoy huge profits by selling consumer goods or luxury items. They start a business by offering a wide variety of goods at prices cheaper than local retailers offer. But once they are established they increase prices.
(i) State the values the government of a developing country ignores while allowing MNCs to establish in their country.
Answer:

1. MNC’s produce only those things which are used by the rich, poor people do not get any benefits.
2. MNC leads to use the natural resources of the host country carelessly.
3. MNC’s tend to promote their culture in their home country.
4. Many domestic industries have to windup, as a result of the threat from MNC’s.

(ii) What value do the MNCs violate?
Answer:

1. Neglect of Industrial and Economic growth of the home country.
2. An investment in the home country is not profitable.
3. Money value also decreased.

Case Study

Public enterprises are established to achieve the goal of economic and social development of the country. They are managed and controlled by Central or State Governments through ministers or government officials. Many times their poor performance influences the policy formulation and running of the enterprise into a loss. Even the big business houses use their influence and get the policies formulated in their favour. State the role of ministers or government to frame the policies for the success of public enterprises.
Answer:

1. Government policies are favourable towards N public enterprise.
2. Public and human resources also developed in our country.
3. By providing good services to increase profit.
4. Government must frame the policies for the success of the public enterprise.
5. No-one Can misuse these policies for personal use.
6. National income will raise by starting MNC’s in the home country.

Multiple choice questions

1. Centralised control in MNC’s implies control exercised by:
(a) branches
(b) subsidiaries
(c) headquarters
(d) parliament
Answer:
(c) headquarters

2. Reconstruction of risk public sector units is taken up by:
(a) MOFA
(b) MOU
(c) BIFR
(d) NRF
Answer:
(c) BIFR

3. BIFR stand for:
(a) Bureau of Industrial and Financial Reconstruction
(b) Board of Industrial and Financial Reconstruction
(c) Board of Indian Financial Reconstruction
(d) Board of Industrial and Financial Reformation
Answer:
(b) Board of Industrial and Financial Reconstruction

4. Multinational companies operate in:
(a) the native countries only
(b) several countries
(c) the Asian countries only
(d) the European countries only
Answer:
(b) several countries

5. Philips is an example of:
(a) joint-stock company
(b) partnership company
(c) sole trading institution
(d) multinational company
Answer:
(d) multinational company

6. Latin America accounts for MNC employment in developing countries:
(a) 10%
(b) 50%
(c) 30%
(d) 60%
Answer:
(d) 60%

7. A multinational company is also known as:
(a) global giant
(b) partnership
(c) co-operative society
(d) public Corporation
Answer:
(a) global giant

8. Pepsi corporation company is an example of:
(a) MNC
(b) government company
(c) join venture
(d) public company
Answer:
(a) MNC

9. Government policy is also favourable towards:
(a) Public corporation
(b) Multinational company
(c) Joint Hindu family
(d) Partnership
Answer:
(b) Multinational company

10. Operates in many countries at different levels of economic development and has i multinational central management:
(a) MNC
(b) Import
(c) Export
(d) Entrepot
Answer:
(a) MNC

11. The multinational firms based in …….. have the largest share of Foreign direct investment.
(a) Germany
(b) Japan
(c) Unite States of America
(d) the United Kingdom
Answer:
(c) Unite States of America

12. Coca Cola corporation it is an:
(a) American company
(b) African company
(c) German company
(d) Indian company
Answer:
(a) American company

Students get through the TN Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 7 Cooperative Organisation

Very short answer questions

Question 1.
What is a Co-operative warehouse?
Answer:
Co-operative warehouse are mostly found in rural areas. It helps the members to get the facility of storing agricultural inputs. They will keep the finished goods till they are despatched for sale through marketing co-operatives.

Question 2.
Mention any four features of co-operative society?
Answer:

1. Voluntary Organisation.
2. Equality
3. Democratic managements and
4. Combination of resources.

Question 3.
Write a short note on the meclagaon committee.
Answer:
In 1914 a committee headed by meclagaon was appointed by the government to review the working of co-operatives on the basis of this recommendation of the committee the government of co-operatives was transferred, from the central to the state governments.

Question 4.
What are the non agricultural credit society?
Answer:

1. Consumer’s co-operatives
2. Manufacturer’s co-operatives
3. Housing co-operatives and
4. Co-operatives warehouses.

Question 5.
What are the aims of credit co-operative society?
Answer:
Credit societies are voluntary association of people with moderate means. They are formed with the aim of giving short term finance to members. In this way the co-operative society protects its members from the clutches of the money lenders.

Question 6.
Give example of co-operative super markets in TamilNadu?
Answer:
Examples of co-operatives super markets in TamilNadu are Kamadhenu Super Market in Chennai, Chinthamani Super Market in Trichy and Coimbatore and Karpagam Super market in Vellore and Villupuram districts! and Ponni co-operatives Super market inj Salem.

Question 7.
What are the aims of co-operative societies?
Answer:
Co-operative enterprises emerged as an instrument to protect the interest of weaker sections. The aim or philosophy behind the concepts is all for each and each for all.

Question 8.
Define Joint Stock Company.
Answer:
A company is defined as an incorporated v association which in an artificial person created by law having a common seal and perpetual succession.

Question 9.
Explain the merits of Super Market?
Answer:
Merits of super Market:

1. Customers are able to buy the goods of daily use in one place.
2. The profit of the super market is shared with the customers in the form or low price of products.
3. They can move around the stores and buy in a relaxed manner and choose the articles they like.
4. Super markets are able to attract many customers and there by register more turn over.
5. The commodities are made available at fixed prices. It is marked on the products.

Short answer questions

Question 1.
What is meant by one man one vote?
Answer:
Co-operative societies are managed on democratic lines. Every member has only one vote irrespective of the number of shares held by. him. The society is formed on the principle of democracy which means “ One vote for one member”. A General body meeting is conducted annually. Representatives are elected by the members to manage the society.

Question 2.
What is the significance of ‘self help and mutual help?
Answer:
The main principle of co-operative organisation is the mutual help. Every member of the society is expected to help himself. This is called self-help. When every member helps every other member, it is called mutual help.

Question 3.
What are the aims of Credit Cooperative society?
Answer:
Credit societies are voluntary association of people with moderate means. They are formed with the aim of giving short-term finance to members. In this way, the co¬operative society protects its members from the clutches of the moneylenders.

Question 4.
Explain the meaning of ‘Consumer co-operatives’.
Answer:
Consumer’s Co-operatives: A cooperative society organized by consumers of a locality for supplying essential goods at a reasonable price. This is called a consumer cooperative society. It eliminates the middlemen. They purchase their requirements directly from the producers or wholesalers in bulk and sell to members, non-members at a reasonable price.

Question 5.
What are the aims of Cooperative societies?
Answer:
Co-operative enterprises emerged as an instrument to protect the interest of the weaker sections. The aim or philosophy behind the concept is “All for each and each for all”.

Question 6.
What do- you understand by marketing co-operative?
Answer:
Marketing co-operatives help the members to secure fair price for their products. They may purchase the produce from the members and sell in, bulk when the market is favourable. In some cases co-operatives sell the produce of the members on commission basis. Marketing co-operatives advance loans to the members. These societies eliminate middlemen and help the members to secure better price for their product.

Question 7.
What is a Non-agricultural Non-credit Society?
Answer:
Non-Agricultural Non-credit societies are formed in order to assist the middle and lower income groups of people. Their main aim is for rendering different types of service to their members at nominal rates of interest.
The different types are:

1. Consumer’s co-operatives
2. Manufacturer’s co-operatives
3. Housing co-operatives and
4. Co-operative warehouses.

Question 8.
What does the word co-operation mean?
Answer:
The word co-operation is derived from the Latin word “co-operari” meaning “ to work with”. So co-operation means working together with others for a common purpose.

Question 9.
What are Co-operative Farming Societies?
Answer:
Co-operative farming are organized by landowners and agriculturists. The main aim is to secure the advantage of large-scale farming and produce maximum productivity with the lowest cost. These societies would solve the problems of agriculture like poor yield.

Long answer questions

Question 1.
Explain the types of Agricultural Credit Societies.
Answer:

1. Agricultural credit societies are organised mostly by agriculturists of a village. They provide loans to its members for various productive and unproductive purposes – relating to Agriculture. Agriculture credit societies are also called as rural credit societies or primary societies.
2. Rural credit Societies are located in rural areas. They secure funds by way of selling shares and by accepting deposits from members and non-members. They lend for productive purpose to small farmers and marginal farmers. They are formed at villages. ‘Its aim is to help their members in developing the habit of savings and banking habit. They also help in collecting rural savings for national development. The liability of the members is unlimited.

Question 2.
What are the steps involved in forming a co-operative society?
Answer:
Formation of a Co-operative Society: A co-operative society must be registered under the Co-operative Societies Act, 1912 or any other state Co-operative law. A co-operative society can be started with a minimum of 25 persons, having a common interest.
An application has to be submitted to the Registrar of Co-operative Societies expressing their intention. The application form is known as Memorandum of Association, It should contain the name and address of the society its objectives, the capital and liability of the members, A copy of the bye-laws stating the rules and regulations of the society should be attached along with the application form.
The system of management, procedure with regard to meetings, resolutions, are stated in the bye-laws. The Registrar will, carefully scrutinise the documents in order to ensure that they are in accordance with the provisions of the Act. When he is folly satisfied he will enter the name of the society in his register and issue the Certificate of Registration. By issue of this certificate, the society comes into existence as a body corporate having a separate legal entity.

Question 3.
State the meaning of supermarket and explain its features.
Answer:
“Supermarket” refers to a type of large-scale retailing. The articles of daily use are sold in different departments without the help of salespersons. It is usually started in cities and big towns as a joint-stock company to earn profit. They must have a large daily turnover to earn a profit on their large capital outlay. In India, the first supermarket was started in New Delhi.
Supermarkets have a dominant provision section, with more varieties. Other sections relating to clothing, footwear, stationery, crockery, and other household items are displayed with their prices. The prices are fixed. There is no bargaining. Door delivery of goods is also given. Sales are made only for cash. Nowadays credit cards are also accepted.
Features:

1. It is a form of large scale retailing,
2. There Is a wide variety of goods made available.
3. The system of self-service is used.
4. There is no need for salesmen in the self-services section.
5. The layout is in the form of different departments.
6. Sales are on a cash basis.
7. Goods are sold after cleaning and packing.
8. No adulteration is practiced.
9. Correct weighment are used so that consumers are not cheated by short weighing.
10. Scarce commodities are also supplied.

Question 4.
Draw a chart showing the types of co-operatives.
Answer:

For Future learning

A group of mechanical and automobile engineers joins hands to set up a Cooperative for the assembly of scooters. How can they go about it? What principles would you like them to keep in mind? How can they augment their financial resources and how should they organize the marketing effort?
Answer:
An Industrial co-operative is organized by small-scale producers. These co-operatives are very useful in obtaining spare parts of scooters.
Now a days we all live in High rise flats. These are either constructed by builders or built by a group of people as a society. Work in groups and collect information regarding any two cooperative housing societies in your neighborhood.
Co-operative community hall, Madipakkam. These types of co-operative giving loans for the construction of buildings.

For Own Thinking

1. List out any 2 Cooperative institutions.
Answer:

1. Amul
2. Indian farmers fertilizers co-operative Limited.
3. Mothers diary
4. Dairy farmers
5. National rural utilities co-operative finance corporation.

2. Name any 2 district-level cooperative organizations.
Answer:

1. TamilNadu co-operative marketing Federation Limited.
2. Tamil Nadu state co-operative society.

3. Mention any 3 village-level primary cooperatives in your area?
Answer:

1. Co-operative Marketing societies.
2. Co-operative fanning societies.
3. Housing co-operatives.

Case Study

Chandra, a trade union activist, lives in a Workers’ colony in the city of Chennai. He is a devoted leader for the cause of workers’ welfare. For the last many months he has been observing that the local vendors of commodities of daily use have been making j huge profits by charging high process from j workers. He cannot tolerate all this and thinks of the idea of opening a consumers’ cooperative store in the colony. He calls a few elderly workers of the locality, tells them about their exploitation by merchants, and discusses with them all his plans to solve the problem. Merchants and discusses with them all his plans to solve the problem. While some of the workers welcome the scheme. Others express their genuine doubts about its feasibility and success. Take the roles of these workers and list out the possible arguments among them.
Answer:
Chandra a trade union activist to Start a consumer cooperative society to buy quality goods. They also supply essential commodities through the public distribution system.

1. Students co-operative stores.
2. Co-operative provision stores.
3. Supermarket.

So, Chandru thinks we want to buy quality goods at a fair price to open consumer co-operatives. Financial resources collected from members.

Multiple choice questions

1. In a cooperative society the principle followed is:
(a) one share one vote
(b) one man one vote
(c) no vote
(d) multiple votes
Answer:
(b) one man one vote

2. What is the minimum number of persons, required to form a co-operative society?
(a) 2
(b) 7
(c) 10
(d) 20
Answer:
(b) 7

3. Maximum membership in a co-operative society is:
(a) 50
(b) 60
(c) 100
(d) unlimited
Answer:
(d) unlimited

4. Co-operative society can be started:
(a) only at villages
(b) in town and villages
(c) only in cities
(d) only in urban areas
Answer:
(b) in town and villages

5. Agricultural credit societies are organized in:
(a) towns
(b) villages
(c) hill areas
(d) coastal areas
Answer:
(b) villages

6. The capital of a Co-operative society is divided into shares of equal value:
(a) 100
(b) 1000
(c) many
(d) 500
Answer:
(c) many

7. The Indian Co-operative Act was enacted in the year:
(a) 1914
(b) 1974
(c) 1954
(d) 1944
Answer:
(a) 1914

8. The first-ever co-operative movement was started in the year:
(a) 1858
(b) 1958
(c) 1948
(d) 1844
Answer:
(d) 1844

9. The Government appointed a committee to review the working of co-operatives under the chairmanship of
(a) H.C. Calvert
(b) Meclagaon
(c) Horace Plunkett
(d) Talmaki I
Answer:
(b) Meclagaon

10. The first-ever co-operative movement was started by:
(a) Alexander Dumas
(b) Meclagaon
(c) Calvert
(d) Robert Owen
Answer:
(d) Robert Owen

11. The history of co-operative movement can be started in the year:
(a) 100
(b) 20
(c) 150
(d) 300
Answer:
(c) 150

12. All for each and each for all is the philosophy behind the concept of
(a) capitalism
(b) socialism
(c) feudalism
(d) co-operation
Answer:
(d) co-operation

13. In the central Government passed, the credit Co-operative societies Act:
(a) 1804
(b) 1994
(c) 1904
(d) 1914
Answer:
(c) 1904

14. The father of the co-operative movement was:
(a) Robert Owen
(b) Alexander Dumas
(c) Meclagaon
(d) Calvert
Answer:
(a) Robert Owen

15. A co-operative supermarket supplies:
(a) credit
(b) service
(c) goods
(d) cash
Answer:
(c) goods

16. Consumers co-operation was first successful in:
(a) England
(b) the USA
(c) Swiss
(d) India
Answer:
(a) England

17. Central co-operative bank is established at:
(a) villages
(b) districts
(c) state headquarters
(d) urban areas
Answer:
(c) state headquarters

18. Only of the profits to be distributed as dividend.
(a) 10%
(b) 11%
(c) 9%
(d) 25%
Answer:
(c) 9%

19. Minority interest can be protected in:
(a) sole trader
(b) partnership
(c) co-operative societies
(d) public company
Answer:
(b) partnership

20. Co-operation is a mid-way between:
(a) capitalism and communism
(b) capitalism and socialism
(c) socialism and mixed economic system
(d) socialism and feudalism
Answer:
(a) capitalism and communism

21. Dividend is declared in a co-operative store to its members:
(a) share capital
(b) number of shares purchased
(c) amount of patronage given
(d) none of the above
Answer:
(c) amount of patronage given

22. The basic objective of a co-operative society is to:
(a) earn profit
(b) organize some essential service for the benefit of its member
(c) organize essential services to the community
(d) arrange for enough quality goods for the community
Answer:
(b) organize some essential service for the benefit of its member

23. In a co-operative society, the shares of a member:
(a) can be transferred
(b) can be repaid
(c) cannot be transferred
(d) none of the above
Answer:
(b) can be repaid

24. A co-operative supermarket supplies:
(a) credit
(b) service
(c) goods
(d) cash
Answer:
(c) goods

Students get through the TN Board 11th Commerce Important Questions Chapter 6 Joint Stock Company which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 6 Joint Stock Company

Very short answer questions

Question 1.
What is stated in the situation clause in a memorandum?
Answer:
The state in which the registered office of the company is to be situated is stated here. The actual address need not be given.

Question 2.
What are registered companies? Give examples?
Answer:
Companies that are registered under the companies act 1956 are .called registered companies. Tata motors limited, Satyam computer services Ltd, EID parry ltd, etc belong to this category.

Question 3.
Write a short note on Capital Clause?
Answer:
The capital clause requires to state the company’s authorized share capital, the different categories of shares, and the nominal value (the minimum value per share) of the shares. It is also required to list the company’s assets under this clause.

Question 4.
For what reasons are shares forfeited?
Answer:

1. Shares can be forfeited only for non-payment of calls due.
2. Shares cannot be forfeited for any other debt due from the shareholder.

Question 5.
How does the company secretaries Act 1980 define a secretary?
Answer:
According to the company secretaries Act 1980, a company secretary is a person who is a member of the institute of company secretaries of India.

Question 6.
What is the consequence of not receiving a minimum subscription?
Answer:
If a minimum subscription is not received within 90 days of the issues of the prospectus money received on the application must be refunded to the applicants.

Question 7.
What do the Articles of Association deal with?
Answer:
Articles of Association is another important document as it contains the rules and regulations for the internal functioning of the company.

Question 8.
Write a short note on the capital clauses.
Answer:
The amount of share capital with which the company is to be registered and its division into shares of fixed amount are also stated in the capital clause.

Long answer questions

Question 1.
Briefly explain the features of the company form of organization.
Answer:
Salient Features of the company form of organization are –

1. Separate legal entity: A company is a person created by law complying with all formalities prescribed under the Companies Act, 1956. It enjoys a separate personality of its own, different from the members composing it. A company can enter into valid Contracts with others including its members and deal with the property in any way it likes. It can sue others in its own name and be sued in its own name by others including its members.
2. Perpetual succession – continuity of life: Members may come and go but the company can go on forever” (Lord Gower). This is because the company’s existence does not depend upon the existence of even promoters who were instrumental in its formation Neither change in the membership of the company nor the death of its members has any impact on the x continuity of its life.
3. Common seal: Though the separate personality of the company is legally recognized, it needs a human agency to act. Obviously, it cannot sign. Any contract entered into by a company, to be valid, must bear the official seal of the company.
4. Limited liability: The liability of the members of a company is generally limited to the value of shares. When once the full value of the shares is paid up, there is no more liability for the shareholders. The feature of limited liability attracts a large number of investors to subscribe to the shares of the company.
5. Easy transferability of shares: In the case of public limited companies, their fully paid shares can be transferred to others without any difficulty. However, in the case of private limited companies, the right to transfer the shares is subject to certain restrictions.

Question 2.
Briefly state the documents to be filed for getting a certificate of incorporation.
Answer:
The promoter has to file the following documents with the Registrar of Companies for getting a certificate of incorporation.

1. Memorandum of Association: This document defines the scope of activities of the company. It should contain the name, the place where the registered office is situated, authorized capital, and the objects of the business. It should be printed and duly stamped, signed, and witnessed. A minimum of two persons in the case of a private limited company and seven in the case of a public limited company must sign the document.
2. Articles of Association: This contains the regulations connected with the internal management of the company. This document must also be duly stamped and signed by the signatories to the memorandum and witnessed.
3. Original letter of approval: Original letter of approval of name be obtained from the Registrar and be filed.
4. A list of directors: A list of directors who have consented to be its directors must be filed.
5. Written consent to act as directors: The directors have to give their consent in writing to act as their directors. They should also undertake to take the necessary qualification shares and pay for them.
6. Notice of the address of the registered office.
7. Statutory declaration: A declaration stating that all the requirements of law relating to registration have been complied with is to be filed. This declaration must be given by an Advocate of the Supreme Court or High Court, or by a Chartered Accountant who is engaged in the formation of the company or by a person named in the Articles as a director or secretary of the company. The Registrar will scrutinize all the documents and if he finds them in order, he will issue the Certificate of Incorporation.

Question 3.
Bring out the distinction between a company and a partnership.
Answer:

Question 4.
Discuss briefly the different kinds of companies.
Answer:
Kinds of companies: Companies can be classified on the basis of incorporation, nature of liability, the extent of public interest, ownership, nationality, etc.
On the basis of incorporation: Any company – is to be incorporated under an Act. The provisions of the particular Act under which it is established govern its working. Companies of this kind are of three types. They are –

1. Chartered companies: Companies established as a result of a charter granted by the King or Queen of a country are known as chartered companies. The charter issued, governs their functioning, eg: East India Company and Bank of England. In India, such companies do not exist now.
2. Statutory companies: Companies established by Special Acts of Parliament or State Legislatures are called statutory companies. The special Acts under which they are established regulate their functioning. Reserve Bank of India, Life Insurance Corporation of India, etc., are of this type.
3. Registered companies: Companies that are registered under The Companies Act, 1956 are called registered companies. Tata Motors Limited, Satyam Computer Services Ltd, EID Parry Ltd, etc belong to this category.

On the basis of liabilities:

1. Companies limited by shares: Here the maximum liability of a shareholder is limited to the amount unpaid on the shares held. Ofice he pays the full value of shares, he has no further liability.
2. Companies limited by guarantee:
   company limited by guarantee the liability of a shareholder is limited to the amount he has voluntarily undertaken to contribute to meet any deficiency at the time of its winding up.
3. Unlimited companies: The liability of the members of unlimited companies is unlimited. Unlimited companies are almost non-existent.

On the basis of nationality:

1. Domestic company: Companies registered under the Companies Act, 1956 or under earlier Acts are considered domestic companies.
2. Foreign company: A foreign company means a company incorporated outside India but having a place of business in India. It has to furnish to the authorities the full address of the registered or principal office of the company or a list of its directors or names and addresses of the residents in India authorized to receive notices, documents, etc.

On the basis of ownership:

1. Holding and subsidiary companies:
   A company becomes a holding company of another if it can appoint or remove all or majority of the directors of the latter company or if it holds more than 50% of the equity share capital of the latter or if it can exercise more than 50% of the total voting power of the latter.
2. The other company which is so controlled is called the subsidiary company.
3. Government companies: A Government company is one in which not less than 51% of the paid-up capital is held by the Central Government or by any one or more State Governments or partly by the Central Governments and partly by one or more State Governments, eg: Bharat Heavy Electricals Limited, Steel Authority of India Limited, etc.
   A subsidiary of a Government company is also treated as a Government company. Its employees are not Government employees.

On the basis of a number of members:

1. Public Limited Companies: The public is invited to subscribe to the shares of the company usually by issuing a prospectus. Shares are easily transferable. A minimum number of people is seven and there is no limit to the maximum number of shareholders. The name must end with the word ‘limited’.
2. Private Limited Companies: A private limited company is a company that has a minimum paid-up capital of rupees one lakh or such higher paid-up capital as may be prescribed.

For Own Thinking

1. Name any 2 Government-owned Joint Stock companies.
Answer:

1. Indian Telephone Industries.
2. TamilNadu State Transport Corporation Limited.
3. TamilNadu Agro Industries Corporation.

2. Name any 2 Joint-stock companies with private ownership.
Answer:

1. Nokia
2. Nestle

3. Name any 2 Private ownership with Foreign participants.
Answer:

1. Marathi Suzuki.
2. Ford.
3. Hyundai.

For Future Learning

Collect advertisements of three different companies inviting the public to subscribe to their shares. Compare their contents regarding the following points.
Answer:

Case Study

Case 1: Ashok is an industrial designer by training. He had the opportunity to learn the technology of fiberglass manufacture while he was in Germany for his training. He plans to set up a plant for the manufacture of fiberglass in India and is able to interest some financiers and technologists. It is estimated that the initial investment in the plant will be of the order of 50 lakhs. Ashok and others decide to set up a company for this purpose. Should they set up a public limited company for the purpose? If so, how should
they go about it? If not, what alternative would you suggest? What formalities will be required of Ashok and his associates if they choose the alternative form of organization suggested by you?
Answer:
Ashok started the public limited company with a capital of Rs. 50 lakhs.
Incorporation: (a) Registration, (b) Approval for the proposed name.
Filling documents: (a) Memorandum of Association, (b) Articles of Association, (c) List of directors, (d) Written consent to act as a director, (e) Statutory declaration, (j) Registrar check all the documents, (g) Prospectus, (h) Minimum subscription, (i) Statement in lies of the prospectus, (j) Filing further documents.
Ashok followed the above rules regarding forming a company.

Case 2: Collect any 10 items of daily use (Packed items} and list the names of the companies manufacturing those items. Classify those companies as public and private limited companies. Which of them are Multinational Companies?
Answer:

1. Sakthi Masala – Private Limited.
2. Aachi Masala – Private Limited.
3. Aavin milk – Government of Tamil Nadu.
4. Arokia – Private Limited.
5. Coca-Cola – Multinational company.
6. Nestle chocolate – Multinational company.
7. Pepsico – Multinational company.
8. Lovato – Private Limited company.
9. Dairy Milk – Private Limited company.
10. Colgate – Private Limited company.
11. Hamam Soap – Multinational company.
12. Ariel – Private Limited company.

Multiple choice questions

1. The board of directors of a joint stock company is elected by:
(a) general public
(b) government bodies
(c) share holders
(d) employer
Answer:
(c) share holders

2. Which document is called charter of a company?
(a) Memorandum of association
(b) Prospectus
(c) Articles of association
(d) All of the above
Answer:
(a) Memorandum of association

3. Name the type of company which must have a minimum paid up capital of 5 lakhs:
(a) public company
(b) private company
(c) government company
(d) all of the above
Answer:
(a) public company

4. Registration of a joint stock company is:
(a) compulsory
(b) optional
(c) compulsory for public limited companies for private limited companies
(d) optional for public limited companies and compulsory for private limited companies
Answer:
(a) compulsory

5. The minimum number of members for a public limited company is:
(a) 2
(b) 3
(c) 1
(d) 10
Answer:
(c) 1

6. The minimum subscription specified in the prospectus must be received with in:
(a) 90 days
(b) 120 days
(c) 130 days
(d) 60 days
Answer:
(a) 90 days

7. Debenture holders of a company are its:
(a) creditors
(b) members
(c) credit customers
(d) borrowers
Answer:
(a) creditors

8. Where the shares are issued at a discount and the nominal value of the share is Rs. 100 the maximum discount that can be allowed is:
(a) Rs. 5
(b) Rs. 10
(c) Rs. 20
(d) Rs. 15
Answer:
(b) 110

9. Large scale production has become the order of the day with the:
(a) the outbreak of the First World war
(b) the advent of the industrial revolution
(c) break down of feudal system
(d) victory of communism
Answer:
(b) the advent of the industrial revolution

10. A company is created by:
(a) law
(b) the entrepreneur
(c) the government
(d) the rich people
Answer:
(a) law

11. The liability of the members of a company is limited to the:
(a) proportion of capital
(b) value of assets
(c) technical experts
(d) value of shares
Answer:
(d) value of shares

12. Any contract entered into by a company to be a valid must:
(a) be recognized by the government
(b) be accepted by the board of directors
(c) bear the seal of the company
(d) be registered with the registrar of companies
Answer:
(c) bear the seal of the company

13. Management of a company is entrusted to:
(a) group of exports
(b) government officials
(c) technical experts
(d) the board of directors
Answer:
(d) the board of directors

14. Statutory companies are those which are established by:
(a) special acts of parliament
(b) special acts of parliament or state legislatures
(c) special acts of state legislatures
(d) provisions of the constitution of India
Answer:
(b) special acts of parliament or state legislatures

15. A private company limited can work with just:
(a) two directors
(b) five directors
(c) one director
(d) many directors
Answer:
(a) two directors

16. A company secretary is appointed by:
(a) government
(b) the institute of company secretaries of India
(c) the board of directors
(d) shareholders in annual general meeting
Answer:
(c) the board of directors

17. The overall maximum managerial remuneration in a public limited company shall not exceed:
(a) 11% of net profit
(b) 11% of paid-up capital and free reserves
(c) 5% of net profit
(d) 5% of paid-up capital and free reserve
Answer:
(a) 11% of net profit

18. The value of qualification shares of a director in a public limited company shall not exceed:
(a) 5000
(b) 500000
(c) 50000
(d) 500
Answer:
(a) 5000

19. Managerial remuneration is paid in the form of:
(a) monthly salary,
(b) commission
(c) percentage of net profit
(d) monthly salary or percentage of net profits or a commission
Answer:
(d) monthly salary or percentage of net profits or a commission

20. The interval between two annual meetings must not be more than months:
(a) 15
(b) 18
(c) 10
(d) 12
Answer:
(a) 15

21. The liability of shareholders of a private limited company is limited to:
(a) the paid-up value of the shares
(b) the amount remaining unpaid on the shares
(c) the extent of private assets
(d) amount called up
Answer:
(b) the amount remaining unpaid on the shares

22. A private limited company can commence business:
(a) immediately on receiving the certificate of incorporation
(b) only after the certificate of commencement of the business is received
(c) on getting name approval from the registrar
(d) on filing all the documents necessary for formation with the Registrar
Answer:
(a) immediately on receiving the certificate of incorporation

23. The existence of a company comes to a close:
(a) on the death of all its promoters
(b) on the death of all the directors of the board
(c) on the transfer of shares by most of its original members
(d) none of the above
Answer:
(d) none of the above

24. Which of the following documents define the scope of a company’s activities?
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
(d) Statutory Declaration
Answer:
(a) Memorandum of Association

25. Which of the following companies must file with the Registrar a statement in lieu of prospectus?
(a) a public limited company which raises funds from the public through issue of shares
(b) a public limited company which has made arrangement for racing its capital from directors and their relatives
(c) a private limited company
(d) all of them
Answer:
(b) a public limited company which has made arrangement for racing its capital from directors and their relatives

26. A preference share has priority in:
(a) dividend only
(b) only in return for capital at the time of winding up
(c) voting rights
(d) both dividend and return of capital on winding up
Answer:
(d) both dividend and return of capital on winding up

27. Shares can be forfeited for:
(a) non-payment of any debt due to the company
(b) not attending three annual general meetings consecutively
(c) for non-payment of call money
(d) for violent activities at the annual general meetings
Answer:
(c) for non-payment of call money

28. Debenture holders are entitled to receive interest in the following circumstances:
(a) when there are profits
(b) when shareholders also get dividend
(c) every year irrespective of loss
(d) all the above
Answer:
(d) all the above

29. A share certificate discloses:
(a) the name of the shareholder
(b) the number of shares
(c) distinctive number of shares
(d) all of these
Answer:
(d) all of these

30. Holding companies are those which:
(a) are administered by the multinationals
(b) hold more than 50% of the equity share capital of another company
(c) look after the administration of other companies
(d) are under the direct control of the government of India.
Answer:
(b) hold more than 50% of the equity share capital of another company

31. The minimum paid-up capital of a private limited company should be:
(a) Rs. 5 lakhs
(b) Rs. 10 lakhs
(c) Rs. 25 lakhs
(d) Rs. 1 lakh
Answer:
(d) Rs. 1 lakh

32. Joint-stock companies require:
(a) huge, capital
(b) small capital
(c) no capital
(d) medium capital
Answer:
(a) huge, capital

33. A private limited company:
(a) should compulsorily hold a statutory meeting
(b) is exempted from holding a statutory meeting
(c) is prohibited from holding a statutory meeting
(d) has to be incorporated with five directors
Answer:
(a) should compulsorily hold statutory meetings

34. The Directors need not retire by rotation in:
(a) Independent Private Limited companies
(b) Joint Stock Companies
(c) Public corporations
(d) Departmental undertakings
Answer:
(b) Joint Stock Companies

35. The first stage of formation of a company is:
(a) location
(b) advertising
(c) promotion
(d) appointment of labor
Answer:
(a) location

36. The objects clause states the:
(a) activities in which the company can engage itself
(b) liability of members is limited
(c) amount of share capital
(d) the situation of the registered office
Answer:
(c) amount of share capital

37. The share holders’ shares have of a company.
(a) no charge on assets
(b) charge on specific assets
(c) charge on current assets
(d) charge on fixed assets
Answer:
(a) no charge on assets

Students get through the TN Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 5 Hindu Undivided Family and Partnership

Very short answer questions

Question 1.
For which of the following types of business do you think a Partnership firm of organization would be more suitable and why?

1. Grocery store,
2. Medical store,
3. Legal consultancy,
4. Craft center,
5. Internet cafe,
6. chartered accountancy firm.

Answer:
For legal consultancy and chartered accountancy firm, partnership firm, will be more suitable because it has:

1. Easy of formation and closure.
2. Balanced decision-making.
3. More funds.
4. Sharing of risks.
5. Maintain secrecy.
6. Division of work.

Question 2.
Compare the status of a minor in a Joint Hindu family Business with that in a partnership firm.
Answer:
A minor becomes a member of Joint Hindu family business by virtue of his birth on the other hand in partnership minor can be a partner only in profits.

Question 3.
Who is a sub-partner?
Answer:
When a person makes an arrangement with a partner to share his profit he is known as a sub-partner. Such a sub partner has no rights against the firm as he is not liable for the debts of the firm.

Question 4.
Who is a dormant partner?
Answer:
The partners who merely contribute capital and do not take active interest in the conduct of the firm are called sleeping or dormant or financing partners.

Question 5.
When is a firm compulsorily dissolved?
Answer:
A firm is compulsorily dissolved either by the agreement of all the partners or on the insolvency of all the partners except one. It may also be dissolved on the happening of an event which makes the object of the firm unlawful. Example the passing of prohibition Act. Declaration of war with another country.

Question 6.
How is a partnership dissolved under?
Answer:
A Partnership may be dissolved under section 42 on the happening of the following contingencies.
(i) Death of a Partner.
(ii) Expiry of the time if partnership us for a fixed period.
(iii) Completion of the venture for which the firm was formed.
(iv) Adjudication of a partner as an insolvent.

Question 7.
Write a short note on partners express authority?
Answer:
The authority to a partner is expressly conferred by an agreement it is called express authority the firm is liable for all the acts of such partners done within such authority.

Question 8.
Define partnership.
Answer:
The partnership is defined as “the relation between persons who have agreed to share the profit of a business carried on by all or any of them acting for all”.

Question 9.
Who is a minor? Can a minor become a partner?
Answer:
A minor is a person who has not completed 18 years of age, where a guardian is appointed by a court, his age of majority extends to 21 years. Legally, a minor cannot become a partner. He may, however, be admitted to the benefits of partnership with the consent of all partners.

Question 10.
Give Kimball and Kimball’s definition of partnership.
Answer:
In the words of Kimball and Kimball, “A partnership or firm as it is often called, is thus a group of men who have joined capital or services for the prosecuting of some business”.

Question 11.
Under what circumstances does Court can order the dissolution of partnership?
Answer:

1. Partner’s Insanity.
2. Permanent incapacity.
3. Persistent breach of the agreement.
4. Misconduct of a partner.
5. Transfer of share.
6. Continuous loss.
7. Just and equitable grounds.

Question 12.
Write a note on dissolution by notice under Sec. 43.
Answer:
Dissolution by notice of partnership-at-will (Sec 43): Where the partnership is at will, the firm may be dissolved by any partner by giving a notice in writing to all the other partners of his intention to dissolve the firm.

Short answer questions

Question 1.
SA/hat is the relationship that exists among partners?
Answer:
The relation that exists between the partners in a partnership is said to be contractual. It is not natural relation arising out of mutual love and affection. According to Indian Partnership Act, “the relation of partnership arises from contract and not from status”. Only persons legally capable of making an agreement can become partners. Lunatics and insolvents cannot become partners.

Question 2.
What is limited partnership?
Answer:
If the liability of the partner is limited then it is called limited partnership. The Law does not permit the formation of a limited partnership in India. But in Europe and U.S.A. limited partnership is allowed. A limited partnership firm must have at least one partner whose liability is unlimited. The liability of remaining partners is limited. Thus limited partnership consists of two types of partners, general partner and limited partner.

Question 3.
What is a partnership deed?
Answer:
A partnership firm can be formed through an agreement among two or more persons.
In India, this agreement may be oral or in writing. But it is desirable to have it in writing to avoid any misunderstanding among the partners in future. All the terms and conditions of partnership are included in the agreement. The partnership agreement is also known as Partnership Deed or Articles of Partnership.

Question 4.
Define implied authority of a partner.
Answer:
An implied authority is a right vested with a partner to be used in emergency situations to protect the interest of the firm. Where there is no partnership agreement or where the agreement is silent, “the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm”. [Sec. 19(1)]. The authority of a partner to bind the firm is called “implied authority”.

Question 5.
What is joint and several liability?
Answer:
The liability of partners is joint and several. The creditors of partnership firm can claim their dues from the private assets of all the partners taken together or they can take action against the private properties of any one of the partners to get back their dues.

Long answer questions

Question 1.
Explain the position of minor in the partnership firm.
Answer:
The position of a minor partner may be studied under two heads.
Position before attaining majority:

1. He has a right to share the property and profits of the firm as may have been agreed upon.
2. He has a right to have access to and inspect and take a copy of the accounts of the firm.
3. His liability is confined only to the extent . of his share in the profits and property of the firm. Over and above his capital, he is neither personally liable nor his private property is liable.

Position on attaining majority:

1. On attaining the majority the minor partner has to decide within six months by giving notice whether he shall continue in the firm or not.
2. If he decides to continue as partner, he becomes liable to the firm from the date, on which he was admitted as minor partner.
3. If he decides not to continue as partner, he is not liable for the debts of the firm after the date of notice.

Question 2.
What are the drawbacks of non-registration of partnership firm?
Answer:
Drawbacks of non-registration ofpartnership: Registration of partnership is only optional in India. But if a firm is not registered, it has to face the following drawbacks.

1. A partner of an unregistered firm cannot file any case against the firm or against any other partner, including an ex-partner for enforcing his contractual rights under the partnership agreement or under the Act.
2. An un-registered firm cannot file any suit, against third parties in any civil court for recovering the money due.
3. Any third party can take legal action against the business or the partners.
4. The firm cannot take legal action against its partners.
5. An unregistered firm cannot enforce its claims against third parties for recovering a sum exceeding rupees one hundred.

Question 3.
Describe the various kinds of partners.
Answer:

1. Active partner: A partner who takes active part in the management of the partnership firm is known as active or working or managing or general partner. His liability is unlimited.
2. Sleeping partner or Dormant partner: The partners who merely contribute capital and do not take active interest in the conduct of the business of the firm are called sleeping or dormant or financing partners.
3. Nominal or Ostensible partner: jje is a partner who neither contributes capital nor takes any part in the management of the firm. He lends his name to be used as partner in the business to increase the reputation of the firm. They are not eligible for a share in the profit. They are also not liable to the creditors for the debts of the firm.
4. Partners in profit only:Aperson who shares the profit of a firm but does not share the loss, is called “partner in profit only”. Usually he has no voice in the management of the firm. But his liability to third parties is unlimited.
5. Partner by estoppel: A person may not be really a partner in the business. But by his behaviour he makes outsiders believe that he is a partner in the business. Then, he is liable to such outsiders who advance money to the firm or enter into a contract under such false belief. Such a person is known as “partner by estoppel”. He cannot later on deny that he is not a partner.

Question 4.
Explain the basic features of partnership.
Answer:
The main features of partnership firm are –

1. Agreement: A partnership is created by an oral or written agreement. It is better to put it in writing to avoid misunderstanding in future.
2. The multiplicity of person: Partnership is the relationship between two or more persons.
   So, there must be more than one person. The maximum number of partners has been limited to 10 in the case of banking business and 20 in the case of other business.
3. Contractual relation: The relation that exists between the partners in a partnership is said to be contractual. It is not natural relation arising out of mutual love and affection. According to Indian Partnership Act, “the relation of partnership arises from contract and not from status”. Only persons legally capable of making an agreement can become partners. Lunatics and insolvents cannot become a partner.
4. Lawful business: Partnership is formed to do a business. Business means any trade or occupation or profession. Eg: Partnership of chartered accountants, partnership of lawyers, general stores etc. The bv iiness must be legal. A partnership to smuggle goods from one country to another is illegal.
5. Sharing of profits: The profit or loss of partnership is shared by the partners in the ratio as given in the agreement. Normally profit or loss is shared according to the capital contribution of partners. But sometimes the partners may agree that a particular partner need not share any loss. If there is no agreement regarding sharing of profit or loss, all the partners share equally.

Question 5.
What are the advantages and disadvantages of partnership firm?
Answer:
The advantages of partnership form of organisation are-

1. Easy formation: A partnership firm is very easy to form. No formal document is required to be prepared as necessary in the case of joint stock company. A simple agreement among the partners is sufficient to start a partnership firm.
2. Registration not compulsory: A partnership firm is exempt from registration because registration is not compulsory. It is left to the discretion of the partners.
3. Larger financial resources: As a number of partners contribute to the capital of the firm, it is possible to collect larger financial resources than the sole proprietorship. Creditworthiness of the firm is also higher because every partner is personally and jointly liable for the debt of the business. Larger resource gives greater scope for the expansion of business.
4. Greater managerial talent: The partners may be assigned duties according to their tajent. Different functional departments may be managed and controlled by different partners. The talent and experience of partners will help to increase the efficiency Of the business resulting in more profit.
5. More credit standing: The partners may have sufficient contacts in the market, They can offer more guarantees to the financial institutions to obtain loans. The liability of partners being unlimited, they will be able to raise more finance. Partnership concern has more credit worthiness than sole trading business.

The disadvantages of Partnership form of organisation are-

1. Unlimited liability; Every partner is jointly and severally liable for the entire debts of the firm. A partner has to suffer not only for his mistakes but also for the lapses and dishonesty of other partners. Unlimited liability discourages many people from becoming a partner in the firm.
2. Limited resources: The resources of the partnership firm is limited. The borrowing capacity of the partners is also limited. Therefore, a partnership form of business is not suitable for undertaking business involving a huge investment of capital.
3. The danger of implied agency: The acts of partners legally bind the business and every other partner in the normal course of business. A dishonest or inefficient partner may bring loss to others by his actions. An innocent partner may be required to lose his personal assets for the mistake of other partners.
4. Distrust: The distrust among partners is the main cause for the dissolution of partnership firms. It is difficult to maintain harmony among partners because they may have different opinions and may not agree unanimously on certain matters. Lack of confidence may lead to misunderstanding and quarrels and it will result in the dissolution of the firm.
5. Limitation on transfer of share: No partner can transfer his share to a third party without the consent of the other partners. If a partner wants to withdraw his share, it is not possible without the consent of other partners. This makes investment in a partnership firm non-liquid, fixed, and less attractive.

Question 6.
Explain the rights and duties of partners.
Answer:
Partnership Act 1932 lays down the following rights and duties of a partner.
Rights of Partners:

1. Every partner has a right to take part in the conduct and management of the business.
2. Every partner has a right to express opinion on any matter related to the firm.
3. Every partner has a right to be consulted before taking important decisions.
4. Every partner has a right to inspect and take copy of books of account and records of the firm.
5. Every partner has the right to an equal share in the profits of the firm unless otherwise agreed by the partners.

Duties of Partners: The duties of partners can be classified into – (i) Absolute duties and
(ii) Qualified duties.

1. Absolute duties: Absolute duties are fixed by law which cannot be violated by partners agreement. These duties are applicable to all partnership.
   (a) Every partner must act diligently and honestly in the discharge of his duties to the maximum advantage of all partners.
   (b) Every partner must act in a loyal and faithful manner towards each other.
   (c) Every partner must act within the scope of the authority entrusted to him.
   (d) Every partner is bound to share the losses of the firm equally unless otherwise agreed.
   (e) Every partner must indemnify the firm against loss sustained due to his willful negligence in the ordinary course of business.
2. Qualified duties: Qualified duties given in the Act can be modified by an agreement of partners entered into.

Question 7.
Differences between Partnership and Sole Trader.
Answer:

Multiple choice questions

1.Name the form of business organization found only in India:
(a) sole-proprietorship
(b) partnership
(c) joint hindu family
(d) co-operatives
Answer:
(c) joint hindu family

2. Name the person who governs Joint Hindu Family Business:
(a) manager
(b) minor
(c) members
(d) karta
Answer:
(d) karta

3. Name the law which governs Joint Hindu family Business:
(a) partnership act
(b) hindu law
(c) companies act 1956
(d) contract act
Answer:
(b) hindu law

4. Which of the following has unlimited liability in business?
(a) Sole proprietor
(b) Karta
(c) Partners
(d) All of the above
Answer:
(d) All of the above

5. Which of the following has a separate legal entity?
(a) Joint stock company
(b) Co-operative society
(c) Both of the above
(d) None of the above
Answer:
(c) Both of the above

6. Minor can be Full-fledged member of:
(a) co-operative society
(b) joint stock company
(c) joint hindu family
(d) partnership
Answer:
(c) joint hindu family

7. The Karta in Joint Hindu Family business has:
(a) limited liability
(b) unlimited liability
(c) no liability for debts
(d) joint liability
Answer:
(b) unlimited liability

8. The maximum number of partners allowed in the banking business are:
(a) twenty
(b) ten
(c) no limit
(d) two
Answer:
(b) ten

9. The head of the Hindu family business is called:
(a) proprietor
(b) director
(c) karta
(d) manager
Answer:
(c) karta

10. Provision of residential accommodation to the members at reasonable rates is the objective of:
(a) producer’s co-operative
(b) consumer’s objective
(c) housing co-operative
(d) credit co-operative
Answer:
(c) housing co-operative

11. A partner whose association with the firm is unknown to the general public is called:
(a) active partner
(b) sleeping partner
(c) nominal partner
(d) secret partner
Answer:
(d) secret partner

12. Partnership may come into existence:
(a) by the operation of law
(b) by an express agreement
(c) by an express or implied agreement
(d) by inheritance of property
Answer:
(b) by an express agreement

13. The agreement of partnership:
(a) must be oral
(b) must be in writing
(c) must be in writing in the stamp paper
(d) can be either oral or in writing
Answer:
(c) must be in writing in the stamp paper

14. In a partnership the partners share:
(a) only profit
(b) only losses
(c) profit, losses and liabilities
(d) only liabilities
Answer:
(c) profit, losses and liabilities

15. Effective organisation promotes:
(a) specialisation
(b) economic development
(c) efficiency in production
(d) harmony of employers and employees
Answer:
(a) specialisation

16. A partnership firm may be registered under:
(a) 1949 Act
(b) 1956 Act
(c) 1932 Act
(d) 1942 Act
Answer:
(c) 1932 Act

17. The relationship between the partners is:
(a) debtors and creditors
(b) principal and agent
(c) seller and buyer
(d) employer and employee
Answer:
(b) principal and agent

18. Every partner has the right to receive interest on loans and advances at the rate of per annum:
(a) 6%
(b) 10%
(c) 12%
(d) No interest
Answer:
(a) 6%

19. The basis of partnership is:
(a) utmost good faith
(b) money available for investment
(c) desire to work together
(d) risk sharing
Answer:
(a) utmost good faith

20. The maximum number of partners in the case by banking business is:
(a) 2
(b) 10
(c) 20
(d) 30
Answer:
(b) 10

21. Sleeping partner may also be called as:
(a) active partner
(b) dormant partner
(c) nominal partner
(d) partner by estoppal
Answer:
(b) dormant partner

22. A minor is a person who has not completed years of age:
(a) 15
(b) 16
(c) 17
(d) 18
Answer:
(d) 18

23. A partner who does not take part in the working of the firm is called:
(a) active partner
(b) sleeping partner
(c) nominal partner
(d) partner in profits only
Answer:
(b) sleeping partner

24. The partnership organisation was started with the enactment of English partnership act in 1907 in:
(a) India
(b) Germany
(c) England
(d) Italy
Answer:
(c) England

25. A temporary partnership which is formed to complete a specific venture or job during a specified period is called:
(a) joint venture
(b) partnership at will
(c) general partnership
(d) sub partner
Answer:
(a) joint venture

26. A partnership is formed by:
(a) agreement
(b) relationship among persons
(c) the direction of government
Answer:
(a) agreement

27. Registration of partnership is:
(a) compulsory
(b) optional
(c) not necessary
Answer:
(b) optional

28. In the partnership there exists a relationship of:
(a) principal and agent
(b) owner and servant
(c) employer and employee
Answer:
(a) principal and agent

29. A partnership is created by:
(a) mutual love and affection
(b) family relationship
(c) agreement
Answer:
(c) agreement

30. A partnership cannot engage in:
(a) large scale production
(b) foreign trade
(c) smuggling goods
Answer:
(c) smuggling goods

31. A collective name of partners is known as:
(a) company
(b) family
(c) firm
(d) co-operative
Answer:
(c) firm

32. The liability of partners is:
(a) joint and several
(b) limited
Answer:
(a) joint and several

33. ……… is described as an extension of the principle of agency.
(a) Partnership
(b) Sole trading concern
(c) Joint stock company
(d) Co-operative society
Answer:
(a) Partnership

34. A partner who contributes capital and takes active part in the management of the partnership firm is:
(a) sleeping partner
(b) nominal partner
(c) managing partner
(d) partner in profits only
Answer:
(c) managing partner

35. Persons who enter into partnership are individually called:
(a) partners
(b) shareholders
(c) sole trader
Answer:
(a) partners

36. Where the authority to.a partner is expressly conferred by an agreement, it is called:
(a) Implied Authority
(b) Express Authority
(c) None of these
Answer:
(b) Express Authority

37. In India registration of partnership is:
(a) compulsory
(b) not compulsory
(c) discretional
Answer:
(b) not compulsory

38. The main cause for dissolution of partnership firm is:
(a) lack of capital
(b) loss in business
(c) distrust among partners
Answer:
(c) distrust among partners

39. In India the agreement among the partners may be in:
(a) oral
(b) writing
(c) oral or writing
Answer:
(b) writing

40. The profit or loss of a partnership firm is shared in the among the partners.
(a) equal ratio
(b) agreed ratio.
(c) capital ratio
Answer:
(b) agreed ratio.

41. An ostensible partner is one who:
(a) contributes a larger part of the capital
(b) takes active part in the management
(c) lends his name to be used to increase the reputation of the firm
Answer:
(c) lends his name to be used to increase the reputation of the firm

Students get through the TN Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 4 Sole Proprietorship

Very short answer questions

Question 1.
Which form of business is suitable for the following types of business and why?
Answer:
(i) Beauty saloon, (ii) Garments shop.

1. Beauty saloon: Sole proprietor is the right form of business because:
   (a) It needs limited capital,
   (b) It is easy to form,
   (c) Entire profit will belong to the owner, (d) It requires personal attention.
2. Garments shop: Sole proprietor is the right form of business because:
   (a) It needs limited capital,
   (b) It is easy to form,
   (c) Entire profit will belong to the owner.

Question 2.
State the various kinds of non-corporate enterprises.
Answer:
A sole proprietorship or as a partnership or as joint Hindu family business may be classified as a types of non-corporate enterprise.

Question 3.
How does the wheeler define a sole tradership?
Answer:
According to Wheeler, “a business undertaking is a concern, company or enterprise which buys and sells, is owned by one person or a group of persons and is managed under a specific set of operating policies”.

Question 4.
How does a sole trader business enterprise help provide self-employment?
Answer:
Sole proprietorship provides self-employment opportunities to many persons with small resources. It offers a way of life for securing the means of livelihood to those who do not want to serve under others.
It makes people self-dependent by providing self-employment.

Question 5.
Why do sole traders lose the economics of large-scale production?
Answer:
Because of limited capital and skill, the sole traders have to work on a small-scale basis. Thus he is deprived of economic of large j scale operation.

Question 6.
Write a note on the corporate form.
Answer:
The ownership is separated from the management and the owners cannot take direct control over the business. Corporate business is:

1. Joint-stock company,
2. Co-operatives,
3. Government institutions.

Question 7.
Is registration is essential for sole trading business?
Answer:
No, registration is not necessary for a sole trading business. The person who has money can start the business. He obtains a license from the local authority like the municipality or panchayat.

Short answer questions

Question 1.
What is the flexibility of a sole trader?
Answer:
It is a highly flexible type of organization.
A sole proprietorship concern is generally run on a small-scale basis. A change in operation is possible without involving much expenditure. The proprietor can adapt adjust to the changing trends and market conditions; because the sole trader is the sole owner of his business.

Question 2.
Give the definition of the encyclopedia of business and commerce for sole trading.
Answer:
Encyclopedia of Business and Commerce defines sole trading concern as, “A form of organization, in which an individual alone invests his capital, uses his own skill and intelligence in the management of its affairs and is entitled to enjoy all the profits as also is solely responsible for all the risks of ownership”.

Question 3.
Write short notes on the uncertainty of a sole tradership.
Answer:
The life of the sole trader business is uncertain and unstable. The life of business depends upon the changes in taste and preferences of customers and changes in fashion, and technology. If the sole trader fails to cope with the latest development he will land in trouble.

Question 4.
Can a sole trader business enterprise obtain the benefits of specialization?
Answer:
The sole trader has to undertake all the work relating to business himself such as buying, selling, accounting, financing, advertising, etc. It would be difficult to avail the services of experts in his business because of small resources. So, the benefits of division of labour and specialization cannot be obtained in this type of business.

Long answer questions

Question 1.
Mention the various types of business suitable for a sole proprietorship.
Answer:
A sole proprietorship is suitable for the following business:

1. Where a small amount of capital is required, eg: Sweetshop, bakery shops, petty shop, etc.
2. Where quick decisions are very important, eg: Share-brokers, doctors etc.
3. Where limited risk is involved, eg: Automobile repair shop, small retail shop.
4. Where personal attention to individual tastes and fashions of customers is required, eg: Beauty parlors, tailoring shop, etc.
5. Where the demand is local seasonal or temporary, eg: Retail trade, laundry, fruit sellers, etc.

Question 2.
One man control is the best in the world provided that one man is big enough to take cure of everything.
Answer:
The points in favour of one-man control are:

1. The easy and quick formation,
2. Direct control,
3. Efforts and reward are linked,
4. Retaining business secrets,
5. Close contact with the consumers,
6. Enjoying all profits,
7. Inexpensive management,
8. No legal restrictions,
9. Direct contact with the employees,
10. Social desirability.

The points limitations of one-man control:

1. Limited capital,
2. Limited managerial ability,
3. Unlimited liability,
4. Risk decision,
5. Uncertainty.

Question 3.
Demerits of a sole trading concern. Explain.
Answer:

1. Limited capital: The resources of a sole proprietor are limited. He depends only on his personal resources and his borrowing capacity. The borrowing capacity depends on his assets and creditworthiness. The financial resources of a single person will be insufficient for business expansion. Therefore, the size of the firm remains small.
2. Limited managerial ability: The managerial ability of a sole trader is limited because a person may not be an expert in every field of business such as purchasing, selling, accounting etc. The sole proprietor may not be able to use the service of experts for want of resources. The limited managerial capacity may hinder the growth of the business.
3. Unlimited liability: The unlimited liability of a sole proprietor may affect his enthusiasm and restrict introducing novel ideas in business.
4. Short life: Anything which affects the personal life of a sole trader affects his business also. Prolonged illness or death of the sole trader brings the affairs of his business to a standstill. If his children are interested and efficient to run the business, the sole trader business can be continued. Otherwise, it will be closed. The closure of a business will cause inconvenience to the consumers and may also result in social loss.
5. Hasty decisions: Decisions arrived at, – after deep deliberations and discussions are sure to be better than that of a decision taken by one man. The chances of wrong decision-making are quite high in a sole trader business. This is because of the fact that the sole trader takes all decisions of the business himself without any assistance. This may lead to wrong decisions which may result in loss and affect the sole trader.
6. Lack of specialization: The sole trader has to undertake all the work relating to business himself such as buying, selling, accounting, financing, advertising, etc. It would be difficult to avail the services of experts in his business because of small resources. So, the benefits of division of labour and specialization cannot be obtained in this type of business.
7. Uneconomic size: Because of limited capital and skill, the sole traders have to work on a small-scale basis. Thus he is deprived of economies of large-scale operation.
8. Lack of consultation: He has no one else to consult before taking any important decisions except his family members. This may result in a heavy loss if his decisions go wrong.

Question 4.
Explain the role of sole trading concerns in society.
Answer:
Role of sole proprietorship in society: Consumers are the kings. They decide the success of a business. Their needs, desires, expectations are to be satisfied by the businessmen. Sole proprietorship occupies a pivotal role in satisfying the multifarious needs of consumers regarding goods and services. The day-to-day requirements of the consumers such as food items, cloth, stationaries, laundry, provisions, books and newspapers, medicines, etc., are supplied by the sole trader form of organization. Thus the sole traders promote the welfare of society. Its social necessity arises due to the following ways.

1. The solution to the unemployment problem: Sole trader business organization gives large employment opportunities to the less educated and uneducated persons and helps to reduce the unemployment problem in the society.
2. Provides investment avenues: Sole trader organization provides a chance for small investors who have a small amount of capital to utilize their savings in the product line.
3. Provision of goods at a low price: Goods are sold by sole traders at a price lesser than the maximum retail price ( MRP ) mentioned on the packages of the goods. This is possible due to inexpensive management.
4. Helps small producers: Most of the goods sold by sole traders are procured locally from local producers. Thus small local producers are benefited from the sole traders.
5. Supply of quality goods: Sole-traders sell goods of high quality nowadays to maintain their reputation. They even accept the return of defective goods. This ensures enhancing the welfare of the public.
6. Philanthropic activities: Sole-traders form small trading organizations among themselves and undertake many social welfare activities such as conducting eye camps, blood donation camps, maintaining parks, provision of barricades on the roads, supplying furniture to schools and constituting charitable trust, etc.
7. Equal distribution of income and wealth: Equal distribution of income and wealth is ensured as there is more entry of sole proprietors in trading activities.
8. Helpful to consumers: The Sole-traders supply the goods to the consumers at their doorsteps. So the time and energy of the consumers are saved.

For Own Thinking

Question 1.
How to start a snack manufacturing unit at home?
Answer:
First, we select snacks- eg: Vada, Popcorn.
One man is enough for preparing Vada and Popcorn.

1. We want to buy black gram Dhall onion and green chili. A small amount is enough.
2. We want to buy maize for preparing popcorn using the machine.

Question 2.
Dried Fish-Trading Explain.
Answer:
Small scale trading.

1. First, we have to buy fresh fishes.
2. Next, we have to try it in the open air.
3. The try-in ready and we can sell them in the fish market.

Question 3.
Individual – Independent software companies run by New graduates.
Answer:
B.E. Software graduates start this type of company with a small amount of capital and two employees as helpers.

Case Study

Rajendran has done his B.Com., this year. He wants to do some good business now. Kesavan, his father, is a Sole-proprietor of a small Banian – manufacturing plant in Salem and asks Rajendran to join the business with him as a partner. However, Rajendran likes to go in for an independent venture. A discussion follows between them on this issue. Meanwhile, Mr. Arul, an advocate, and friend of Rajendran’s father, comes there and gives comments on both of them. Assume the role of Rajendran, Kesavan, and Arul and state and defend your positions.
Answer:
Mr. Kesavan: He is a sole proprietor.
Mr. Rajendran: Rajendran likes to go in for an independent venture. He gives large employment opportunities to uneducated and less educated persons and reduces the unemployment problem in society.
Mr. Arul: He is an advocate. He gives suggestions to both the father and son. Because reduce unemployment problem in the society.

For Future learning

Question 1.
Mahesh is a young graduate who has. inherited a sum of Rs. 1,00,000 by way of family savings. He also has a family house to which he has the sole title as the only son of his father. He is thinking of starting a small factory for the manufacture of plastic toys. What form of ownership organization will you advise him to choose?
Answer:
Sole proprietorship.

Question 2.
Amar started a business on his own. He has his father helping him with the accounts and his brother helps him with looking after customers in the evening. Amar pays a monthly salary to his father and brother. Identify the form of business organization.
Answer:
Sole trading form of business. Because he engaged father and brother as an employee.

Multiple choice questions

1. Sole trading business can be started by:
(a) at least two persons
(b) at least 7 persons
(c) anyone person
(d) at least 10 persons
Answer:
(c) anyone person

2. Choose the type of business in which sole proprietorship is very suitable:
(a) CA firm
(b) beauty pan our
(c) a shopping mall
(d) all of these
Answer:
(b) beauty pan our

3. The liability of a sole trader is:
(a) limited only to his investment in the business
(b) limited to the total property of the business
(c) unlimited
(d) unlimited to the business assets
Answer:
(c) unlimited

4. Which of the following has unlimited liability in business?
(a) Sole proprietor
(b) Karta
(c) Partners
(d) All of the above
Answer:
(d) All of the above

5. What is the advantage of a sole proprietorship?
(a) Small capital.
(b) Hasty decision.
(c) Limited capital.
(d) Limited managerial ability.
Answer:
(c) Limited capital.

6. A sole trader uses in business:
(a) his own savings only
(b) loans obtained from government
(c) funds from non-resident Indians
(d) his own savings or funds borrowed from friends and relatives.
Answer:
(d) his own savings or funds borrowed from friends and relatives.

7. A sole proprietorship is a:
(a) cannot keep his own business secrets
(b) can keep his business secrets
(c) both (a) and (b)
(d) none of the above
Answer:
(b) can keep his business secrets

8. For a sole proprietorship the capital is provided by the:
(a) owner himself
(b) government
(c) financial institution
(d) none
Answer:
(a) owner himself

9. No legal formality is required to start a ………. business.
(a) sole trader
(b) partnership
(c) joint-stock companies
(d) co-operatives
Answer:
(a) sole trader

10. ……. are the kings.
(a) Debtors
(b) Creditors
(c) Banker
(d) Customer
Answer:
(d) Customer

11. Sole proprietorship is suitable for …… business.
(a) large scale
(b) small scale
(c) medium-scale
(d) all
Answer:
(b) small scale

12. Decision-making process in sole trading business is:
(a) quick
(b) slow
(c) neither quick nor slow
(d) all the above
Answer:
(a) quick

13. The legal entity of the enterprise is distinct from that of its owners in:
(a) non-corporate form
(b) corporate form
(c) sole-tradership
(d) none of the above
Answer:
(b) corporate form

14. The enterprise and its owners are considered as having the same entity in:
(a) noncorporate form
(b) corporate form
(c) joint-stock company
(d) all the above
Answer:
(a) noncorporate form

15. The resources of a sole proprietor are:
(a) unlimited
(b) limited
(c) restricted
(d) expanded
Answer:
(b) limited

16. “He owns all and risks all” The principle is followed in:
(a) sole tradership
(b) partnership
(c) MNC
(d) company
Answer:
(a) sole tradership

17. ……… is found in each and every country in the world.
(a) Sole tradership
(b) Partnership
(c) Company
(d) Co-operatives
Answer:
(a) Sole tradership

18. A sole trading concern is owned by:
(a) an individual
(b) two persons
(c) three persons
(d) the government
Answer:
(a) an individual

19. The absence of …….. with the employees paves the way for the smooth running of the business.
(a) salaries
(b) conservative
(c) friction
(d) flexible
Answer:
(c) friction

20. The chances of ………. decision making are quite high in a sole trader business.
(a) right
(b) wrong
(c) wasteful
(d) None of the above
Answer:
(b) wrong

Students get through the TN Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 3 Classification of Business Activities

Very short answer questions

Question 1.
What are the causes of business risk?
Answer:

1. Natural causes
2. Human causes
3. Economic causes
4. Physical causes and other causes.

Question 2.
What is the primary industry?
Answer:
Primary industry includes all those activities which are connected with the extraction and production of natural resources and reproduction and development of living organisms. Plants etc.

Question 3.
What is Human Resource Management?
Answer:
It aims at ensuring the availability of working people who have the necessary skills to perform various tasks in enterprises.

Question 4.
Define micro-units as per MSME?
Answer:
MSME development Act 2006 the above types of industries are defined as follows:
Micro unit: A unit wherein investment plant and machinery is up to Rs. 25 lakhs in care of manufacturing and up to Rs. 10 lakhs in care of service enterprises.
MSME: (i) Micro unit, (ii) Small unit,
(iii) Medium unit, (iv) Large unit.

Question 5.
What are the functions of commerce?
Answer:

1. Removing of the hindrance of person and that means lack of information of producer about consumer and to consumer about the producer. It is removed by advertising.
2. Transportation removes hindrance of place.

Question 6.
What is continuous industry?
Answer:
In the continuous industry, raw materials are fed from one end of the factory. They emerge as finished products from the other end after passing through several processes.

Question 7.
Who is a middle man?
Answer:
The term middle man “refers to all those who intervene from the primary producer to the ultimate consumer in the exchange of goods,

Question 8.
‘Mention any five of the large-scale retail units?
Answer:
Departmental stores, multiple shops, consumer’s co-operative stores, mail order business house and hire purchase and installment system. These are some of the large-scale retail units.

Question 9.
Name the utilities of commerce.
Answer:
Form utility, place utility, time utility.

Question 10.
Name the branches of commerce.
Answer:
Trade, transport, insurance, warehousing, banking, communications, advertisement and salesmanship.

Short answer questions

Question 1.
Differences between insurable risk and non-insurable risk is summarised below?
Answer:

Basic	Insurable risks	Non-insurable risk
Meaning	Those risk which can be covered up by some type of insurance policy are called insurable risk.	Those risks which cannot be covered up by some type of insurance policy are called non-insurable risk.
Business risk	Business risks are not insurable risks.	Business risks are non-insurable risks.
Example	Risk of damage due to fire accident, theft etc.	Risk of damage due to change in technology or change in government policy etc.

Question 2.
What is E-commerce?
Answer:
The term e-commerce is known as ‘ Electronic Commerce’ used by the media to do business with consumers through the internet. Electronic commerce promises new ways of working for companies allowing them to react to real-time changes in the market by:

1. Gaining more knowledge about their customers and
2. Increasing the visibility of demand across their supply chains.

Question 3.
Explain the importance of commerce.
Answer:
Every person wants to lead a happy and comfortable life. Every nation wants to attain a high standard of living. This is possible when goods are produced in plenty at a cheaper cost. Goods flow from production centers to consumption centers. The continuous flow of goods from one country to another country has lead to the equalization of prices of many commodities in the international market. By frequent trade, contacts, people of different countries know of the culture and civilization of other countries. As a result, cultural integration takes place at the international level.

Question 4.
How communication is helpful in Trade Activities?
Answer:
The buyers and sellers need the services of various agencies for communicating their messages. The producers inform their customers about the production of goods. The intending buyers send orders to producers for the supply of goods. The services of post offices, private courier services, fax, telephones, cell phones, etc., are utilized for communication purposes.

Question 5.
What are the hindrances in commerce? Which agencies are used to remove these hindrances?
Answer:

1. Lack of personal contact: This hindrance is removed by traders and middlemen.
2. Distance or place: This hindrance is removed by transportation.
3. Finance: This hindrance is removed by banking.
4. Time or storage: This hindrance is removed by warehousing.

Question 6.
What is the role of profit in business?
Answer:
Profits play a vital role in any business earning of profits is essential for any business because of the following reasons given below:
Means of livelihood: Profit act as a means of livelihood for the entrepreneurs without profit entrepreneurs cannot continue with the business.
Rewards for taking risks: It provides a return for taking risks.
Funds for growth: It would provide funds for the growth of the business.

Multiple choice questions

1. Industry can be divided into ………….. types.
(a) 2
(b) 3
(c) 4
(d) 5
Answer:
(a) 2

2. On the basis of activities industry can be divided into ……… types.
(a) 2
(b) 3
(c) 4
(d) 5
Answer:
(b) 3

3. On the basis of size industry can be divided into ……… types.
(a) 2
(b) 3
(c) 4
(d) 5
Answer:
(c) 4

4. Primary industries can be divided into ………. types.
(a) 2
(b) 3
(c) 4
(d) 5
Answer:
(a) 2

5 . Examples of Genetic industries,
(a) bricks
(b) stones
(c) piggery
(d) none
Answer:
(c) piggery

6. Conversion of raw materials into finished products are called ………. industries.
(a) manufacturing
(b) construction
(c) assembling
(d) none
Answer:
(a) manufacturing

7. Warehouse facilities create ………. utility.
(a) time
(b) place
(c) storage
(d) all
Answer:
(a) time

8. Business involves various types of:
(a) risk
(b) profit
(c) loss
(d) all
Answer:
(a) risk

9. Trade may be classified into:
(a) internal trade
(b) external trade
(c) both (a) and (b)
(d) all
Answer:
(c) both (a) and (b)

10. Internal trade may be classified into:
(a) wholesale
(b) retail
(c) both (a) and (b)
(d) none
Answer:
(c) both (a) and (b)

11. Trade is an essential part of:
(a) trade
(b) industry
(c) commerce
(d) all
Answer:
(c) commerce

12. Trade removes the hindrance of:
(a) person
(b) place
(c) time
(d) money
Answer:
(a) person

13. Trade means:
(a) buying
(b) selling
(c) buying and selling
(d) none
Answer:
(c) buying and selling

14. The term Industry means:
(a) group of firms
(b) company
(c) sole trader
(d) partnership
Answer:
(a) group of firms

15. The term E-commerce means:
(a) electronic commerce
(b) electric commerce
(c) economic activities
(d) non-economic activities
Answer:
(a) electronic commerce

16. Commerce creates form, place, and utility.
(a) time
(b) possession
(c) both (a) and (b)
(d) none
Answer:
(a) time

17. Trade involves two persons:
(a) buyer and seller
(b) wholesaler and retailer
(c) creditor and debtor
(d) All
Answer:
(a) buyer and seller

18. Example for extractive industries:
(a) Hunting
(b) Textile
(c) Paper
(d) Computer
Answer:
(a) Hunting

19. Business activities may be classified info:
(a) industry and commerce
(b) buyer and seller
(c) money and profit
(d) loss and profit
Answer:
(a) industry and commerce

Students get through the TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Very short answer questions

Question 1.
Explain the concept of Business.
Answer:
An economic activity involving the production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society is called business.

Question 2.
How would you classify business activities?
Answer:
Business activities can be classified in the following ways:

Question 3.
Write a note on Industry.
Answer:
The activities deal with the conversion of raw materials into finished goods. Which are connected with raisii%, producing or processing of consumer goods.
eg: bread, butter, cheese, shoes, or capital goods like machinery.

Question 4.
What is the barter system?
Answer:
Before the invention of money, goods were exchanged for other goods. This exchange of goods for goods is called the barter system.

Question 5.
List the auxiliaries of trade.
Answer:
The auxiliaries of trade consist of services such a transport, banking, insurance warehousing, advertising, and communication.

Question 6.
What is business risk? What is its nature?
Answer:
The term business risk refers to the possibility of inadequate profit or, even losses due to uncertainties, eg: Changes in taste and preferences of consumers. Strike, increased competition, change in government policy, etc. There are two types- speculative and pure.

Question 7.
What is meant by Entrepot trade?
Answer:
Entrepot trade means importing goods from one country and exporting the same to other countries.

Question 8.
Define wholesaler.
Answer:
According to Evelyn Thomas ‘A true wholesaler is himself neither manufacture nor a retailer but acts as a link between the two.

Question 9.
Define Retailer.
Answer:
According to Cundiff E.W and still, A retailer is a merchant or occasionally an agent whose main business is selling directly to the ultimate consumers.

Question 10.
What is wholesale trade?
Answer:
Wholesale trade is known as the purchase of goods in hulk from the manufacturers and sells them in lesser quantities to others.

Short answer questions

Question 1.
What is meant by Private Enterprises?
Answer:
An enterprise is said to be a private enterprise where it is owned, managed and controlled by persons other than Government.

1. Sole proprietorship, eg: Sundar Stationeries
2. Partnership firms, eg: Ramesh Bros.

Question 2.
What is meant by Public Enterprises?
Answer:
An enterprise is said to be a public enterprise where it is owned, managed, and controlled by the Government or any of its agencies or both. Public enterprises may be organized in several forms such as,

1. Departmental undertaking – Public Works Department (PWD)
2. Public Corporation – Oil and Natural Gas Corporation (ONGC)
3. Govemmeiit Company – State Trading Corporation (STC)

Question 3.
What is meant by Joint Enterprises?
Answer:
An enterprise is said to be a joint enterprise where it is owned, managed, and controlled by Government and private entrepreneurs, eg: Maruti Suzuki.

Question 4.
What is meant by commerce?
Answer:
It establishes a link between the producers and consumers of goods and maintains a smooth and uninterrupted flow of goods from producers to consumers.

Long answer questions

Question 1.
What are the types of Economic Activities?
Answer:
Types of Economic Activities: Economic activities are undertaken to earn money. Generally, people engage themselves in such activities on a regular basis and are said to be engaged in their occupation. Occupations may be classified into three categories based on the following: (i) Employment, (ii) Profession and (Hi) Business.

1. Employment: It refers to the occupation in which people work for others and get remuneration in the form of wages or salaries: The one who is employed by others are called employees and the one who employs others is called employer, eg: Managers, Clerks, Bank officials, Factory workers etc.
2. Profession: Professions are those
   occupations that involve rendering personal services of a special and expert nature. A profession is something which is more than a job. It is a career for someone who is competent in their respective areas. It includes professional activities which are subject to guidelines or codes of conduct laid down by professional bodies.’ Those engaged in a profession are called professionals and they earn income by charging professional fees.
3. Business: According to H.Haney, “Business may be defined as a human activity directed towards producing or acquiring wealth through buying and selling of goods”. Business activities are connected with raising, producing, or processing goods. The industry creates forth. utility to goods by bringing materials into the form which is useful for intermediate consumption (i.e., further use of the material in order industry) or final consumption by consumers.

Question 2.
Explain the activities on the basis of ownership?
Answer:
Activities on the Basis of Ownership: On the basis of ownership business activities may be broadly grouped into three categories.

1. Private Enterprises: An enterprise is said to be a private enterprise where it is owned, managed and controlled by persons other than Government, (i) Sole proprietorship, eg: Sundar Stationeries, (ii) Partnership firms, eg: – Ramesh Bros.
2. Public Enterprises: An enterprise is said to be a public enterprise where it is owned, managed, and controlled by the Government or any of its agencies or both. Public enterprises may be organized in several forms such as, eg: (i) Departmental undertaking – Public Works Department (PWD), (ii) Public Corporation – Oil and Natural Gas Corporation (ONGC), (iii) Government Company – State Trading Corporation (STC).
3. Joint Enterprises: An enterprise is said to be a joint enterprise where it is owned, managed, and controlled by Government and private entrepreneurs, eg: Maruti Suzuki.
4. 

For Own Thinking

Question 1.
Do you know that there are white-collar, blue-collar, pink-collar jobs?
Answer:

• Blue-collar: A blue-collar worker is a working-class person who performs manual labour, blue collar work may involve skilled or unskilled manufacturing, mining, oil field construction, eg: Managerial position.
• White-collar: The white-collar worker typically performs work in an office environment and may involve sitting at a computer or desk, eg: Mechanics.
• Pink collar: The third type of worker is a service worker is called a pink collar job whose labour is related to customer interaction. Entertainment sales or other service-oriented work, eg: Teachers, Doctors, Nurses.

Multiple choice questions

1. Activities undertaken with the object of earning:
(a) money
(b) wealth
(c) profit
(d) none
Answer:
(a) money

2. Example for Economic activity:
(a) selling by retail
(b) cooking food for the family
(c) both (a) and (b)
(d) none
Answer:
(a) selling by retail

3. Occupations may be classified into ………. categories.
(a) 2
(b) 3
(c) 4
(d) 5
Answer:
(b) 3

4. The one who is employed by others is called:
(a) employees
(b) employers
(c) day-wages
(d) salaries
Answer:
(a) employees

5. On the basis of size business activities may be classified into ……….. categories.
(a) 2
(b) 3
(c) 4
(d) 5
Answer:
(a) 2

6. Examples of consumer goods:
(a) plant
(b) pen, brush
(c) machinery
(d) all
Answer:
(b) pen, brush

7. An important feature of the business is:
(a) profit motive
(b) service motive
(c) both (a) and (b)
(d) none
Answer:
(a) profit motive

8. Activities undertaken to satisfy social and psychological needs are called ……… activities.
(a) non-economic
(b) economic
(c) business
(d) human
Answer:
(a) non-economic

9. All economic activities can be valued in ……… terms.
(a) physical
(b) monetary
(c) both (a) and (b)
(d) all
Answer:
(b) monetary

10. Economic activities are related to the creation of:
(a) wealth
(b) profit
(c) loss
(d) profit and loss
Answer:
(a) wealth

11. Economic activities are:
(a) irregular
(b) repetitive
(c) profit nature
(d) all
Answer:
(a) irregular

12. Economic activities are initiated to satisfy human:
(a) activities
(b) needs and wants
(c) only wants
(d) only needs
Answer:
(b) needs and wants

13. Industry creates ……… utility.
(a) place
(b) time
(c) form
(d) possession
Answer:
(c) form

14. On the basis of ownership business activities may be grouped into ……… categories.
(a) 2
(b) 3
(c) 4
(d) 6
Answer:
(b) 3

15. The profit that is expected in a business is always:
(a) certain
(b) compulsory
(c) uncertain
(d) optional
Answer:
(c) uncertain

16. Social objectives are those objectives of the business. Which are desired to be achieved for the benefit of the:
(a) society
(b) people
(c) government
(d) poor people
Answer:
(a) society

17. Economic objectives of business refer to the objective of earning:
(a) profit
(b) loss
(c) wealth
(d) all
Answer:
(a) profit

18. An enterprise that is owned, managed and controlled by persons other than the government it is called ………. enterprise.
(a) government
(b) private
(c) mixed
(d) public
Answer:
(b) private

19. (ONGC) Oil and Natural Gas Corporation is an example of:
(a) departmental undertaking
(b) public corporation
(c) government company
(d) private company
Answer:
(b) public corporation

20. (PWD) Public Works Department is an example of:
(a) government company
(b) private sector
(c) departmental undertaking
(d) public corporation
Answer:
(c) departmental undertaking

Students get through the TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Very short answer questions

Question 1.
Hindrance of finance – Explain.
Answer:
Producers and traders may not have the required funds at the time of their need. Banks and other financial institutions provide funds and help in the transfer of funds to enable the functioning of business smoothly.

Question 2.
Name the important Trade Centres in India?
Answer:
The important trade centers were Delhi, Mumbai, Ahmedabad, Sonar, Sonargoon, Lahore, etc.

Question 3.
Name the important Ancient Trade Centres in Tamil Nadu?
Answer:
Ramanathapuram, Mylapore, Puducherry, Kaveripumpattinam, Marakanam, Korkai, Nagapattinam, Kanyakumari.

Question 4.
Name the Ancient Trade centers in the coastal regions of Tamil Nadu.
Answer:
Alambari, Alagankulam, Marakkanam, Pumphar, Vasavasamudram, Mylapore.

Short answer questions

Question 1.
What are the three conditions worked for worked on Barter System?
Answer:

1. Each party to barter must have surplus stocks for the trade to take place.
2. Both the buyers and sellers should require the goods to each other desperately i.e., double coincidence of wants.
3. Buyer and seller should meet personally to affect the exchange.

Question 2.
Explain the Hindrance of the person.
Answer:
Manufacturers do not know the place and ‘face of the consumers. It is the retailer who knows the taste, preference, and location of the consumers. The chain of middlemen consisting of wholesalers, agents, and retailers establishes the link between the producers and consumers.

Question 3.
When the demand for Indian goods decline during the British rule?
Answer:
Textiles and shipbuilding earned name and fame in the 17th and 18th centuries. Britishers gradually abolished Princely order in the Indian territories. Thus the demand for Indian goods declined during the British rule.

Question 4.
Define commerce.
Answer:
J. Stephenson defines Commerce as “the sum total of those processes which are engaged in the removal of hindrances of person, place and time in the exchange of commodities”.

Question 5.
List out what are the hindrances of commerce?
Answer:

1. Hindrance of person.
2. Hindrance of place.
3. Hindrance of time.
4. Hindrance of risk.
5. Hindrance of knowledge.
6. Hindrance of finance.

Question 6.
List out what are the difficulties of the barter system?
Answer:

1. Lack of double coincidence of wants.
2. Non-existence of common measures of value.
3. Lack of direct contact between producer and consumer.
4. Lack of surplus stock.

Long answer questions

Question 1.
When did the overseas trade expand in India?
Answer:
During the 16th and 18th centuries, India’s overseas trade expanded due to trading with European companies. The discovery of new all-sea routes from Europe to India via Cape of Good Hope by Vasco da Gama had a far-reaching impact on the civilized world. The arrival of the Portuguese in India was followed by the advent of other European communities. India’s maritime trade was a monopolized one over Europeans and at one stage the global trade share of India was 55 percent which is just 2 percent in the 21st century. The European merchants who came to India were not only individual merchants but also represented their respective governments. They gained a strong foothold in India’s maritime trade by virtue of their strong naval power. In course of time, their commercial motives turned into territorial ambition like the East India Company which became the British Empire here.

Question 2.
When money was used as a Medium of exchange of goods and services?
Answer:
Commerce has been in practice since time immemorial. It is part and parcel of human life, whether it is a king or a common man. It emerged as an economic activity, mainly as a barter system which means the exchange of goods for goods. It was so comfortable for neighboring villages, states, even countries to practice barter in the absence of a medium of exchange in the form of money today. However, the concept of money occupied its predominance when scarce resources were to be either exchanged between parties in need or countries in demand and over a period of time barter economy took the dimension of the monetary economy where money was used as a medium of exchange of goods and services.

Multiple choice questions

1. The barter envisages mutual exchange of goods without as a medium of exchange.
(a) capital goods
(b) luxury goods
(c) consumer goods
(d) money
Answer:
(d) money

2. Hindrance of place is to overcome with the help of:
(a) time
(b) risk
(c) person
(d) transport
Answer:
(d) transport

3. Business activities can be classified into and commerce.
(a) industry
(b) insurance
(c) profit
(d) trade
Answer:
(a) industry

4. Warehouse facilities create …… utility.
(a) risk
(b) person
(c) time
(d) finance
Answer:
(c) time

5. Hindrance of knowledge is to overcome the help of:
(a) trade
(b) transport
(c) advertisement
(d) insurance
Answer:
(c) advertisement

6. A carpenter who makes furniture creates:
(a) time utility
(b) form utility
(c) place utility
(d) profit utility
Answer:
(b) form utility

7. Fishery and poultry are classified under:
(a) genetic industries
(b) extractive industries
(c) construction industries
(d) manufacturing industries
Answer:
(a) genetic industries

8. Trade removes the hindrance of:
(a) time
(b) person
(c) risk
(d) finance
Answer:
(b) person

9. The primary object of business is:
(a) to earn profit
(b) to help list employees
(c) to help society
(d) to help traders
Answer:
(a) to earn profit

10. Commerce is related to:
(a) production of goods
(b) exchange of goods
(c) providing occupation
(d) providing services
Answer:
(b) exchange of goods

11. Which of the following does not characterize business activity?
(a) Production of goods and services
(b) Presence of risk
(c) Sale or exchange of goods and services
(d) Salary or wages
Answer:
(d) Salary or wages

12. Which of the broad categories of industries covers, oil refinery, and sugar mills?
(a) Primary
(b) Secondary
(c) Tertiary
(d) None of them
Answer:
(a) Primary

13. Which of the following cannot be classified as an auxiliary to trade?
(a) Mining
(b) Insurance
(c) Warehousing
(d) Transport
Answer:
(a) Mining

14. The occupation in which people work for others and get remunerations in return is known as:
(a) business
(b) employment
(c) profession
(d) none of them
Answer:
(b) employment

15. The industries which provide support services to other industries are known as:
(a) primary industries
(b) secondary industries
(c) commercial industries
(d) tertiary industries
Answer:
(d) tertiary industries

16. Business risk is not likely to arise due to:
(a) changes in government
(b) good management
(c) employee dishonesty
(d) power failure
Answer:
(b) good management

17. Which of the following cannot be classified as an objective of a business?
(a) Investment
(b) Productivity
(c) Innovation
(d) Profit earning
Answer:
(a) Investment

18. Choose the odd one out;
(a) Insurance
(b) warehousing
(c) mining
(d) banking
Answer:
(c) mining

19. Profits are necessary for:
(a) expansion
(b) survival
(c) innovation
(d) all the above
Answer:
(d) all the above

20. Small scale fixed retailer includes:
(a) General stores
(b) Pedlers
(c) Cheap Jacks
(d) Hawkers
Answer:
(d) Hawkers

21. Trade acts as a connecting link between the producer and:
(a) wholesaler
(b) retailer
(c) broker
(d) consumer
Answer:
(d) consumer

22. Domestic trade is otherwise called as:
(a) home trade
(b) foreign trade
(c) entrepot trade
(d) internal trade
Answer:
(d) internal trade

23. A Retailer deals in ……… varieties of goods.
(a) single-line
(b) different
(c) general stores
(d) hawkers
Answer:
(b) different

24. Sale of domestic goods to Foreign countries:
(a) Import trade
(b) Export trade
(c) Entrepot trade
(d) Retail trade
Answer:
(b) Export trade

25. Wholesaler’s deals in the quantity of goods.
(a) small
(b) large
(c) medium
(d) limited
Answer:
(b) large

26. A warehouse keeper accepts goods for the purpose of:
(a) storage
(b) export
(c) selling
(d) packaging
Answer:
(a) storage

27. Genetic industries are an example for ……. industries.
(a) fisheries
(b) mining
(c) computer
(d) oil refinery
Answer:
(a) fisheries

28. Remuneration given to a broker is called:
(a) commission
(b) salary
(c) dividend
(d) brokerage
Answer:
(d) brokerage

29. International trade leads to:
(a) specialization
(b) equalisation of prices
(c) patent right
(d) surplus balance of trade
Answer:
(a) specialization

TN 11th Commerce Important Questions State Board English Medium 2021-2022.

TN State Board 11th Commerce Important Questions and Answers

Unit 1 Fundamentals of Business

• Chapter 1 Historical Background of Commerce in the Sub-Continent Important Questions
• Chapter 2 Objectives of Business Important Questions
• Chapter 3 Classification of Business Activities Important Questions

Unit 2 Forms of Business Organisation

• Chapter 4 Sole Proprietorship Important Questions
• Chapter 5 Hindu Undivided Family and Partnership Important Questions
• Chapter 6 Joint Stock Company Important Questions
• Chapter 7 Cooperative Organisation Important Questions
• Chapter 8 Multi-National Corporations (MNCs) Important Questions
• Chapter 9 Government Organisation Important Questions

Unit 3 Service Business – I

• Chapter 10 Reserve Bank of India Important Questions
• Chapter 11 Types of Banks Important Questions
• Chapter 12 Functions of Commercial Banks Important Questions
• Chapter 13 Warehousing Important Questions
• Chapter 14 Transportation Important Questions
• Chapter 15 Insurance Important Questions

Unit 4 Service Business – II

• Chapter 16 Emerging Service Business in India Important Questions

Unit 5 Service Business – II

• Chapter 17 Social Responsibility of Business and Business Ethics Important Questions
• Chapter 18 Business Ethics and Corporate Governance Important Questions

Unit 6 Business Finance

• Chapter 19 Sources of Business Finance Important Questions
• Chapter 20 International Finance Important Questions
• Chapter 21 Micro, Small and Medium Enterprises (MSME) and Self Help Groups (SHGs) Important Questions

Unit 7 Trade

• Chapter 22 Types of Trade Important Questions
• Chapter 23 Channels of Distribution Important Questions
• Chapter 24 Retailing Important Questions

Unit 8 International Business

• Chapter 25 International Business Important Questions
• Chapter 26 Export and Import Procedures Important Questions
• Chapter 27 Facilitators of International Business Important Questions
• Chapter 28 Balance of Trade and Balance of Payments Important Questions

Unit 9 The Indian Contract Act

• Chapter 29 Elements of Contract Important Questions
• Chapter 30 Performance of Contract Important Questions
• Chapter 31 Discharge and Breach of a Contract Important Questions

Unit 10 Direct and Indirect Taxes

• Chapter 32 Direct Taxes Important Questions
• Chapter 33 Indirect Taxation Important Questions

Students get through the TN Board 12th Chemistry Important Questions Chapter 1 Metallurgy which is useful for their exam preparation.

TN State Board 12th Chemistry Important Questions Chapter 1 Metallurgy

Question 1.
Name a few metals that occur natively.
Answer:
Silver, gold, platinum, copper occur in nature in significant amounts.

Question 2.
Distinguish between ore and minerals.
Answer:
Both minerals and ores are naturally occurring compounds of the metal. It is possible to extract metal in large quantities and in an easy manner from ore but it is not so in a mineral. All ores are minerals but all minerals are not ores.

Question 3.
What do you understand by the term “concentration of the ore”?
Answer:
The ore particles are associated with earthy impurities like sand, clay etc. These impurities have to be removed before it is subjected to extraction. The removal of impurities from the ore by specific methods is known as the concentration of the ore.

Question 4.
Write the name and formula of the common ores of aluminium, iron and copper.
Answer:

Question 5.
The names of a few ores are given. Write the composition of the ore. (i) Calamine, (ii) Zincite, (Hi) Galena, (iv) Cerrusite, (v) Cassiterite, (vi) Silver glance, (vii) Chloroargyrite.
Answer:
(i) Calamine: ore of Zn: ZnCO₃
(ii) Zincite : ore of Zn: ZnO
(Hi) Galena: ore of Pb: PbS
(iv) Cerrusite: ore of Pb: PbCO₃
(v) Cassiterite: ore of Sn: SnO₂
(vi) Silver glance: ore of Ag: Ag₂S
(vii) Chlorargyrite: ore of Ag: AgCl

Question 6.
Briefly give the principle involved in gravity separation of concentrating the ore.
Answer:
This method uses the difference in specific gravity between the ore particles and impurities (gangue). The crushed ore is treated with a rapidly flowing current of water. Lighter gangue particles are washed away, leaving behind heavier ore particles.

Question 7.
Why is the froth floatation process selected for the concentration of sulphide ores?
Answer:
The sulphide ore particles are preferentially wetted by oil, becomes lighter and thus rise to the surface along with the froth while the gangue particles are preferentially wetted by water, becomes heavier and settle down at the bottom of the tank. In this way, sulphide ore particles are separated and hence concentrated.

Question 8.
Name the chemicals used as frothing agents in the froth floatation process.
Answer:
Pine oil and eucalyptus oil are used as a frothing agent in the froth floatation process.

Question 9.
What is the role of depressant in the froth floatation process?
Answer:
The depressants help in the separation of two sulphide ores. For example, in the case of an ore containing PbS (galena) and ZnS (Zinc blende), the depressant is sodium cyanide (NaCN). It prevents ZnS from coming to the froth but allows PbS to come with froth in the froth floatation process ZnS forms a soluble complex with NaCN.

Question 10.
Explain the term leaching.
Answer:
It is a chemical separation of the ore and impurities. It involves the treatment of the ore with a suitable reagent to make it soluble while impurities remain insoluble. The insoluble impurities are separated by filtration.

Question 11.
Explain how, gold ore is concentrated by leaching, (or) How is leaching used to concentrate native ores of gold?
Answer:
The crushed ore of Au is leached with an aerated dilute solution of NaCN. Gold is converted into a soluble cyanide complex. The gangue, aluminosilicate remains insoluble.

Question 12.
What is cementation? Explain with an equation.
Answer:
Gold can be recovered by reacting the deoxygenated leached solution with zinc. In this process, the gold is reduced to its elemental state (zero oxidation state) and the process is called cementation.

Question 13.
What is the role of ammonia in leaching ores containing nickel or copper or cobalt?
Answer:
When a crushed ore containing nickel, copper and cobalt is treated with aqueous ammonia under suitable pressure, ammonia selectively leaches these metals by forming their soluble complexes viz. [Ni(NH₃)₆]²⁺, [Cu(NH₃)₄]²⁺, and [CO(NH₃)₅H₂O]³⁺ respectively from the ore leaving behind the gangue, iron (III) oxides/hydroxides and aluminosilicate.

Question 14.
Explain how bauxite ore is leached in the extraction of aluminium.
Answer:
The bauxite ore is treated with aqueous sodium hydroxide and heated to a temperature of around 470 – 520 K, at 35 atm. The aluminium dissolves forming a soluble complex, sodium meta aluminate leaving behind impurities.
Al₂O₃ (S) + 2NaOH (aq) + 3H₂O (l) → 2Na [Al(OH)₄] aq.
The hot solution is separated from its impurities and CO₂ gas is passed. Pure alumina gas precipitated
2Na [Al(OH)₄] (aq) + CO₂ (g) → Al₂O₃. H₂0 + 2 NaHCO₃ (aq)
The precipitate is washed and dried.

Question 15.
How is sulphide ores leached?
Answer:
The sulphide ores (ZnS, PbS) are treated with hot, aqueous sulphuric acid. The insoluble sulphide is converted to soluble sulphate and elemental sulphur which gets precipitated.
2ZnS (s) + 2H₂SO₄ (aq) + O₂ (g) → 2ZnSO₄ (aq) + 2S (s) + H₂O

Question 16.
Explain the principle involved in the magnetic separation of the ore with an example.
Answer:

This method is based on the difference in magnetic properties of the ore and the impurities. For example, tinstone, an ore of tin can be separated from its magnetic impurities (wolframite). The crushed ore is poured onto an electromagnetic separator consisting of a belt moving over two rollers of which one is magnetic. The magnetic part of the ore is attracted towards the magnet and falls as a heap close to the magnetic region while the non-magnetic part falls away.

Question 17.
Give chemical equations involved in the process of roasting.
Answer:
Roasting converts sulphide ores to their oxides.

It also removes volatile impurities like moisture and non-metals as their oxides.

Question 18.
Explain the term ‘Roasting’ in metallurgy.
Answer:
Roasting is a process in which sulphide ores are converted to oxide ores by heating the ore in excess of oxygen in a reverberatory furnace below the melting point of the metal.
eg: Galena when roasted gets converted to lead monoxide.
2PbS + 3O₂ → 2PbO + SO₂
During roasting volatile and non-metallic impurities are removed. The ore is rendered porous so that further steps in the extraction process becomes easy.

Question 19.
What is calcination? Explain with an example.
Answer:
Calcination is the process in which the concentrated ore is heated strongly in the absence of air. During this process, the water of crystallisation present in hydrated oxides escapes as moisture; This method is carried out in a limited supply of air. For example, calcination of the carbonate ore, carbon dioxide example is expelled.

Question 20.
Distinguish between calcination and roasting.
Answer:

1. Both processes are used to convert ores into metallic oxides. During roasting sulphide ores are converted to oxides and during calcination carbonate ores are converted to oxides.
2. Roasting is carried out by heating the ore with excess oxygen below the melting point of the ore whereas calcination is done by heating the ore in a limited supply of oxygen.
3. During roasting volatile impurities are removed and non-metallic impurities escape as their oxides. During calcination, the water of crystallisation escapes.
4. Both processes render the ore porous which makes further steps of the extraction process easiest.

Question 21.
Write chemical equations involved in the calcination process?
Answer:
Calcination is the process that involves the conversion of carbonate ores to oxides.

The water of crystallisation of hydrated salts escapes as water vapour.

Question 22.
Give a brief account of the reduction of metal oxides to metals.
Answer:

1. Metal oxides can be reduced to metals by using a suitable reducing agent. The choice of the reducing agent depends on the nature of the metal. The reducing agents used commonly are carbon, carbon monoxide, hydrogen and reactive metals like sodium.
2. Carbon is used as a reducing agent in the reduction of oxide ores such as ZnO, Mn₃O₄ and Cr₂O₃. The ore and coke are heated strongly in a blast furnace.
   
3. Carbon monoxide is used to reduce ferric oxide in the extraction of iron.
   Fe₂O₃ (s) + 3CO (g) → 2Fe (s) + 3CO₂ (g) ↑
4. Gaseous hydrogen is used to reduce oxides of less electropositive metals (Fe, Pb, Cu) than hydrogen.
   Ag₂O + H₂ → 2Ag + H₂O
   Fe₃O₄ + 4H₂ → 3Fe + 4H₂O
5. Aluminium is used to reduce metal oxides like Cr₂O₃.
   
   Active metals such as sodium, potassium and calcium are also used as reducing agents.
   B₂O₃ + 6Na → 2B + 3Na₂O
   Rb₂O₃ + 3Mg → 2Rb + 3MgO

Question 23.
What do you understand by the terms (i) Flux, (ii) Slag? Explain with examples.
Answer:

1. Flux is a chemical substance that is added to the concentrated ore, to remove impurities present. The impurities combine with the flux and form a fusible mass slag.
2. Acidic impurities are removed by using a basic flux and basic impurities are removed by adding acidic fluxes.
3. Silicon dioxide is an acidic flux and limestone (CaO) is a basic flux.
4. CaO(s), the basic flux removes the gange silicon dioxide (SiO₂), as calcium silicate (slag) in the extraction of iron.
   

Slag: Slag is a compound formed when flux and gangue can combine with each other. The slag is a feasible mass, which removes, the impurities in the ore. In the extraction of iron, FeO is added as a flux to remove the gangue (SiO₂) as ferrous silicate (slag).

Question 24.
Give chemical equations involved in the extraction of copper from copper pyrites.
Answer:

1. Smelting of the concentrated ore:
   Cu₂S and FeS formed in equation (1) is called mattle.
2. The remaining Cu₂S is further oxidised to cuprous oxide, which is subsequently converted to metallic copper.
   Cu₂S + 3O₂ → 2Cu₂S + 2SO₂
   2Cu₂O + Cu₂S → 6Cu + SO₂

Question 25.
Complete and balance the following equations.
Answer:

Question 26.
Briefly outline the thermodynamic principle involved in metallurgy.
Answer:
For any process, Gibb’s free energy change ΔG should be negative, i.e.,
ΔG = ΔH – TΔS should be negative where ΔH and ΔS are enthalpy and entropy changes respectively. The extraction of the metals from their oxides is carried out by using different reducing agents. A suitable reducing agent is chosen based on thermodynamics.
Let us consider the reduction of metallic oxide by carbon.

Thermodynamically, the reduction of metal oxide (equation -1), with a given reducing agent (equation -2) can occur if the free energy change for the coupled reaction is negative. Hence the reducing agent in chosen in such a way to produce a large negative value for the coupled reactions.

Question 27.
What is the Ellingham diagram? Explain.
Answer:
Ellingham’s diagram is used to obtain the ΔG° values at various temperatures for the reduction of metal oxides by treating reduction as an equilibrium process.
The diagram is made by plotting temperature in the x-axis and the standard free energy of formation (ΔG°) of the metal oxide in the ‘y ’ axis. The resultant plot is a straight line with ΔS as slope and ΔH as ‘y’ intercept. The graphical representation of the variation of standard free energy of formation of various metal oxides with temperature is known as the Ellingham diagram.

Question 28.
Briefly explain the salient features of the Ellingham diagram.
Answer:
(i) Ellingham diagram consists of plots that represent the variation of standard free energy of formation of metal oxides versus temperature.
(ii) These plots help is in predicting the feasibility of thermal reduction of ore. Consider the formation of metal oxide.
2xM (s) + O₂ (g) → 2MxO (s)
In this reaction, there is a decrease in the value of ΔS° as M.rO is a solid and 02 is a gas. i.e., ΔS° is negative. Thus, if the temperature is increased, TΔS° becomes more negative. As in the equation ΔG° = ΔH° – TΔS°
TΔS° is substracted, therefore ΔG° becomes less negative i.e., ΔG° is likely to increase with temperature and this trend is confirmed from the curves of metal oxides.
The following observations are made from the curves.
(a) The slope of the curves of formation of metal oxides is positive because ΔG° becomes less negative and increases with temperature.
(b) Each curve is a straight line except when some change takes place in phase. The temperature at which such a change occur is indicated by an increase in slope on the positive side.
(c) In the case of CO, ΔG° decreases as ΔS° increases. This is indicated by the downward trend.
(d) Any metal oxide with lower ΔG° is more stable than a metal oxide with higher ΔG°. This implies that the metal oxide placed higher in the diagram can be reduced by the metal lower in the diagram.

Question 29.
Mention the limitations of the Ellingham diagram.
Answer:

1. Ellingham diagram is constructed based only on thermodynamic considerations. It gives information about the thermodynamic feasibility of a reaction. It does not tell anything about the rate of the reaction. Moreover, it does not give any idea about the possibility of other reactions that might be taking place.
2. The interpretation of ΔG is based on the assumption that the reactants are in equilibrium with the product which is not always true.

Question 30.
Based on the Ellingham diagram explain.
Answer:

1. Aluminium can be used as a reducing agent for the reduction of chromic oxide.
   In the Ellignhem diagram, the formation of chromium oxide lies above that of the aluminium, meaning that Al₂O₃ is more stable than Cr₂O₃. Hence aluminium can be used as a reducing agent for the reduction of chromic oxide.
2. Aluminium cannot be use4 to reduce MgO or CaO.
   The formation of MgO or CaO lies below that, that of aluminium. Hence, it cannot be used to reduce oxides of Mg or Ca.

Question 31.
Why is the reduction of a metal oxide easier if the metal is in the liquid state at the temperature of reduction?
[OR]
Account for the fact that the reduction of a metal oxide is easier if the metal is formed in the liquid state at the temperature of reduction.
Answer:
Entropy is higher when the metal is in the liquid state than when it is in the solid-state. Therefore, the value of entropy change (ΔS°) of the reduction process is more positive, when the metal is formed in the liquid state. The value of TΔS° increases and that of ΔH° remains constant, the value of ΔG° becomes more negative and hence reduction becomes easier.

Question 32.
The choice of a reducing agent in a particular reduction depends on the thermodynamic factor. How far do you agree with this statement?
Answer:
Support your opinion with two examples.
From the Ellingham diagram, it is evident that any metal oxide with a lower AG° value is more stable than the metal oxide with a higher AG° value. This implies that the metal oxide placed lower in the diagram cannot be reduced by a metal involved in the formation of oxide placed higher in the diagram. However, the reverse can readily take place.
Thus, Al₂O₃ cannot be reduced by Cr however Cr₂O₃ can be reduced by Al.
At temperature 1733K, AG° formation of Al₂O₃ and Cr₂O₃ is given below.

The reduction of Al₂O₃ by Cr may be obtained by subtracting equation (i) and (ii).

ΔG° = 400 kJ mol-1 This reaction is thermodynamically not feasible since ΔG° has a positive value. But the reverse reaction is possible as it has a negative ΔG° value. Similarly, both aluminium and zinc can reduce FeO to Fe, but Fe cannot reduce Al₃O₂ Or ZnO.

Question 33.
Based on the Ellingham diagram given below predict a suitable reducing agent for the reduction of Cu₂O.
Answer:

It is seen in the diagram that the Cu₂0 curve lies almost at the top while the lines sharing the formation of CO₂ from C, and the formation of CO from carbon lie much below it. So it is easy to reduce Cu₂O to the metal by heating it with coke at temperatures after 500 – 600 K.
Cu₂O + C → 2Cu + CO

Question 34.
Show by using the Ellingham diagram given below to predict the possible temperature at which ZnO is reduced to Zn by carbon.
Answer:

Ellingham diagram reveals that the lines involving the formation of ZnO and carbon monoxide cross each other at about 1270 K. There is a sudden increase in the value of ΔG° for the formation of ZnO above 1180°C. This is due to the fact that zinc begins to boil at this temperature. Above, 1270 K, ΔG° for the reaction.

is considered negative and thus ZnO is reduced by coke.

Question 35.
Out of carbon and carbon monoxide which is a better reducing agent for ZnO?
Answer:
From Ellingham’s diagram, it is clear that the free energy of formation of CO from C is lower at a temperature above 1120 K while that of CO₂ from carbon is lower above 1323K than that of free energy of formation of ZnO. However, the free energy of the formation of CO₂ from CO is always higher than that of ZnO. Hence, C is a better reducing agent of ZnO.

Question 36.
Explain why is the extraction of copper from pyrites difficult than that from its oxide ore through reduction.
Answer:
The standard free energy formation (ΔG°) for Cu₂S is more negative than those of CS₂ and H₂S. Therefore neither carbon nor hydrogen can reduce Cu₂S to copper. But the standard free energy of formation of Cu₂0 (ΔG°) is less negative than that of CO and hence carbon can readily reduce Cu₂O to Cu.
Alternatively,
ΔG° / T line for CO has a negative slope and there is no compound CS analogous to CO with a steep negative ΔG°/T line. Thus, carbon is a good reducing agent for oxides and not for sulphides. Therefore sulphide ores are normally roasted in air to form oxides before reducing than with carbon.

Question 37.
Given the following ores indicate which of them Can be concentrated by magnetic separation method, (i) Bauxite, (ii) Kaolinite, (iii) Haematite, (iv) siderite, (v) iron pyrites, (vi) copper pyrites, (vii) galena, (viii) cassiterite, (ix) horn silver, (x) zincite, (xi) magnetite.
Answer:
Ores that are magnetic in nature can be separated from non-magnetic gangue particles by magnetic separation ores of iron such as Haematite (Fe₂O₃), Magnetite (Fe₃O₂), Siderite (FeCO₃) and Iron pyrites (FeS₂) being magnetic can be separated by magnetic separation.

Question 38.
Explain the principles involved in each of the following processes of refining metals. (i) Distillation, (ii) Liquation, (iii) Electrolyte refining, (iv) zone refining, (v) vapour phase method.
Answer:

1. Distillation: This method is used for the purification of volatile metals like zinc, mercury, cadmium etc. The impure metal is heated in a retort and the vapours are condensed in separate receivers. The pure metal distils leaving behind the non-volatile having higher boiling point) impurities in the retort.
2. Liquation: This method is used for the purification of metals in which the melting points of metals are lower than these of the impurities. The crude metal is heated in an inert atmosphere on a sloping hearth of a reverberatory furnace when the metal flows down into the receiver leaving behind infusible impurities on the hearth. Metals like tin and lead one purified by this method.
3. Electrolyte refining:
   Electrolytic refining is a process of purification of an impure metal by electrolysis. The impure metal is used as an anode and a pure metal is used as a cathode. The electrolyte is a suitable aqueous solution of the salt of the metal. During electrolysis, the metal dissolves at the anode, migrates to the cathode and gets deposited as a pure metal, eg: Electrolytic refining of silver:
   Cathode: Pure silver Anode: Impure silver rods Electrolyte: Acidified aqueous solution of silver nitrate.
   When a current is passed through the electrodes the following reactions will take place.
   Reaction at anode 2Ag (s) → Ag⁺ (aq) + e^–
   Reaction at cathode Ag⁺ (aq) + e^– → Ag(s)
   During electrolysis, at the anode, the silver atoms lose electrons and enter the solution. The positively charged silver cations migrate towards the cathode and get discharged by gaining electrons and deposited on the cathode. Other metals such as copper, zinc etc., can also be refined by this process in a similar manner.
4. Zone refining: This method is based on the principles of fractional crystallisation. When an impure metal is melted and allowed to solidify, the impurities will prefer to be in the molten region, i.e., impurities are more soluble in the melt than in the solid-state metal. In this process, the impure metal is taken in the form of a rod. One end of the rod is heated using a mobile induction heater which results in the melting of the metal on that portion of the rod. When the heater is slowly moved to the other end the pure metal crystallises while the impurities will move on to the adjacent molten zone formed due to the movement of the heater. As the heater moves further away, the molten zone containing impurities also moves along with it. The process is repeated several times by moving the heater in the same direction again and again to achieve the desired purity level. This process is carried out in an inert gas atmosphere to prevent the oxidation of metals. Elements such as germanium (Ge), silicon (Si) and gallium (Ga) that are used as semiconductor are refined using this process.
   (v) Vapour phase method:
   The basic requirement is that the metal, when treated with a suitable reagent form a volatile compound which as decomposition gives the pure metal. eg: Nickel forms a volatile nickel carbonyl on heating with carbon monoxide, which on decomposition gives pure nickel.

Question 39.
Explain how zinc is purified by electrolytic refining.
Answer:
The impure zinc is made the anode while the cathode consists of pure sheets of zinc. The electrolyte is an acidified (H₂SO₄) solution of zinc sulphate (ZnSO₄). On passing electric current pure zinc deposits on the cathode.

Question 40.
State the role of silver in the metallurgy of copper.
Answer:
During roasting, copper pyrites are converted to a mixture of FeO and Cu₂O.

To remove FeO (basic impurity) an acidic flux, SiO₂ is added during smelting. FeO combines with SiO₂ to form ferrous silicate (FeSiO₃) as slag and floats over the molten matter and hence can be easily removed.

Question 41.
What is the role of graphite in the electrometallurgy of aluminium?
Answer:
In the electrometallurgy of aluminium, a fused mixture of alumina, cryolite and fluorspar (CaF₂) is electrolysed using graphite as anode and graphite lined iron as a cathode. During electrolysis, Al is liberated at the cathode while CO and CO₂ one liberated at the anode.
At Cathode: Al⁺³ (melt) → Al (l)
At anode: C + O^-2 (melt) → CO + 2e^–
C + 2O^-2 (melt) → CO₂ + 4e^–
Instead of graphite, some metal is used as an anode, then O₂ liberated will not only oxidise the metal of the electrode but would also convert the same Al liberated at the cathode back to Al₂O₃.
Since graphite is much cheaper than any metal, it is used as a cathode. Thus the role of graphite in the electrometallurgy of Al is to prevent the liberation of 02 at the anode. Which may otherwise convert Al to Al₂O₃.

Question 42.
Mention the application of the following metals, (i) Al, (ii) Cu, (iii) Fe, (iv) Au.
Answer:
Al: Aluminium is the most abundant metal and is a good conductor of electricity and heat. It also resists corrosion. The following are some of its applications.

1. Many heat exchangers/sinks and our day to day cooking vessels are made of aluminium.
2. It is used as wraps (aluminium foils) and is used in packing materials for food items.
3. Aluminium is not very strong, However, its alloys with copper, manganese, magnesium and silicon are lightweight and strong and they are used in the design of aeroplanes and other forms of transport.
4. As aluminium shows high resistance to corrosion, it is used in the design of chemical reactors, medical equipment, refrigeration units and gas pipelines.
5. Aluminium is a good electrical conductor and cheap, hence used in electrical overhead electric cables with a steel core for strength.

Cu:

1. Copper is used for making coins and ornaments along with gold and other metals.
2. Copper and its alloys are used for making wires, water pipes and other electrical parts.

Fe:

1. Iron and its alloys are used everywhere including bridges, electricity pylons, bicycle chains, cutting tools and rifle barrels.
2. Cast iron is used to make pipes, valves and pumps stoves etc…
3. Magnets can be made of iron and its alloys and compounds.
4. An important alloy of iron is stainless steel, and it is resistant to corrosion. It is used in architecture, bearings, cutlery, surgical instruments and jewellery. Nickel steel is used for making cables, automobiles and aeroplane parts. Chrome steels are used for manufacturing cutting tools and crushing machines.

Au:

1. Gold is used for coinage and has been used as the standard for monetary systems in some countries.
2. It is used extensively in jewellery in its alloy form with copper. It is also used in electroplating to cover other metals with a thin layer of gold which are used in watches, artificial limb joints, cheap jewellery, dental fillings and electrical connectors.
3. Gold nanoparticles are also used for increasing the efficiency of solar cells and also used as catalysts.