11th Commerce Chapter 4 Assignment Answer key - Sole Proprietorship

\Assignment

Standard – XI

 SUBJECT – Commerce Chapter 4 Assignment Answer key

• UNIT II
• Chapter – 4 – Sole Proprietorship
• Part-A

I.One Mark Questions

1.Which is the oldest form of Business Organisation?

a) Sole proprietorship

b) Partnership

c) Co-Operative Society

d) Company

Answer:- a) Sole proprietorship

2.In which form of the owner, establisher and manager is only one?

a) Joint Enterprise

b) Government company

c) Co-Operative society

d) Sole proprietor

Answer:- d) Sole proprietor

3.A major disadvantage of sole proprietorship is…..

a) Limited Liability

b) Unlimited liability

c) Easy formation

d) Quick decision

Answer:- b) Unlimited liability

4.From the following ….. is Non-Corporate form of business

a) Joint stock company

b) Sole trading business

c) Government Company

d) Co-operatives

Answer:- b) Sole trading business

5.In sole proprietor business…..decision can be taken.

a) Quick

b) Lately

c) After discussion

d) None

Answer:- a) Quick

6.In sole proprietorship business secret….

a) Can be maintained

b) Cannot be maintained

c) None of these

d) All of these

Answer:- a) Can be maintained

7.Registration of sole proprietorship is…..

a) No need

b) Essential

c) Willingness

d) None of these

Answer:- a) No need

8.More flexibility is possible in…

a) Sole trader ship

b) Joint stock company

c) Partnership

d) Co-Operative society

Answer:- a) Sole trader ship

9.Investment made by a single person is done in…….

a) Partnership

b) Joint stock company

c) Sole trader ship

d) Co-operative society

Answer:- c) Sole trader ship

10.Full profit can be enjoyed by a person in….

a) Partnership

b) Joint stock company

c) Sole tradership

d) Co-operative society

Answer:- c) Sole tradership

Part-B

II.Very Short Answer.

11.Who is called Sole Trader?

• Proprietorship is a form of business organisation in which an individual introduces his own capital, uses his own skill and intelligence in the management of its affairs, and is solely responsible for the results of its operations.

12 .What are the Corporate Enterprises?

• Government – Public Undertakings, Public Utilities.
• Private – Joint-stock companies
• Co-operative society

13.What are the Non- Corporate Enterprises?

• The businesses which have no legal separation from the owners of the business are known as non-corporate enterprises.

E.g Sole proprietorship and Partnership.

14.For which of the following types of business do you think a sole

Proprietorship form of Organisation would be more suitable and why?

• a. Grocery store
• b. Medical store
• c. Craft centre
• d. Legal consultancy
• e. Internet cafe
• According to the features of Sole proprietorship, it would be suitable for Grocery Store, Craft centre.

15.Mention any 2 limitations of sole tradership?

1. Limited Capital:

• Since the capital is contributed by one individual only, business operations have necessarily to be on a limited scale.

2. Limited Managerial Skill:

• A single person’s intelligence and experience may not help him beyond a certain stage. Since he has to focus on each and every activity, his managerial ability is bound to be limited.

Part-C

III. Short Answer.

16.How is it possible to maintain secrecy in sole proprietorship?

• In a sole proprietorship, as the trader is the sole owner of the business, the secrecy can be maintained easily.

17.What is Unlimited liability?

• The creditors have the right to recover their dues even from the personal property of the proprietor in case the business assets are not sufficient to pay their debts.

18.Write any 3 characteristics of sole proprietorship?

1. Ownership by one man:

• This is owned by a single person. The sole trader contributes the required capital. He is not only the owner of the business but also manages the entire affairs.

2. Freedom of work and Quick Decisions: 

• Since an individual is himself as an owner, he need not consult anybody else. Hence he can make quick decisions.

3. Unlimited Liability:

•  When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

19.Give some examples of sole trading business?

1. Fruit sellers,
2. Tailoring units,
3. Petty shops,
4. Super Markets.

20.Define sole trading business?

• “Sole proprietorship is that form of business organisation which is owned and controlled by a single individual. He receives all the profits and risks of his property in the success or failure of the enterprise” – Wheeler.

Part-D

IV.Write in detail.

21.Explain the characteristics of sole proprietorship

The following are the characteristics of a Sole Trader.

1. Ownership by one man:

• This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manager of the entire affairs.

2. Freedom of work and Quick Decisions:

• Since the individual is himself as an owner, he need not consult anybody else. Hence he can take quick decisions.

3. Unlimited Liability:

• When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

4. Enjoying Entire Profit:

• He strives tirelessly for the improvement and expansion of his business and enjoys all the benefits of his hard work.

5. Absence of Government Regulation:

• A sole proprietor concern is free from Government regulations. No legal formalities are to be observed in its formation, management or in its closure.

6. No Separate Entity:

• The sole trading concern comes to an end with death, disability, insanity and insolvency of the individual.

7. Maintenance of Secrecy:

• Since he/she manages all the affairs of the business, the secrecy can be maintained easily.

22.What are the Advantages and disadvantages of Sole trading business?

1. Easy Formation:

• No legal formalities are required to initiate a sole trading concern. Any person capable of entering into a contract can start it, provided he has the necessary resources for it.

2. Incentive to Work hard:

• There is a direct relationship between effort and reward. The fact that the entire profit can be taken by himself without sharing with anybody else induces him to work ceaselessly.

3. Small Capital:

• Small capital is an important as well as the specific advantage of a sole proprietorship. A sole proprietor can start a business with small capital.

4. Credit Standing:

• Since his private properties are held liable for satisfying business debts, he can get more financial assistance from others.

5. Personal Contact with the Customers:

• Since the sole proprietor knows each and every customer individually he can supply goods according to their taste and preferences. Thus he can cultivate a personal relationship with the customers.

6. Flexibility:

• The sole trader can easily adjust himself to the changing requirements of his business.