6 ITB MCQ

PROF.
SHOAIB MIRZA JINNAH COMMERCE ACADEMY SARGODHA 0343-0707116
INTRODUCTION TO BUSINESS
CHAPTER 1 business
1. Which of the following is NOT a factor of production? a) Land b) Labor c)
Money d) Capital Answer: c) Money
2. What is a legal form of business where owners have limited liability for
the company's debts? a) Partnership b) Sole proprietorship c)
Corporation d) Cooperative Answer: c) Corporation
3. The process of converting inputs into outputs is known as: a)
Management b) Production c) Marketing d) Forecasting Answer: b)
Production
4. When demand for a product increases as income rises, it is known as: a)
Inferior good b) Luxury good c) Giffen good d) Normal good Answer: d)
Normal good
5. The total value of goods and services produced within a country's
borders in a specific time period is called: a) Gross Domestic Product
(GDP) b) Gross National Product (GNP) c) Net National Product (NNP) d)
Net Domestic Product (NDP) Answer: a) Gross Domestic Product (GDP)
6. The process of planning, pricing, promoting, and distributing goods and
services to satisfy customer needs is called: a) Finance b) Production c)
Marketing d) Human Resources Answer: c) Marketing
7. What type of market structure is characterized by a single seller
dominating the market? a) Oligopoly b) Monopoly c) Perfect competition
d) Monopolistic competition Answer: b) Monopoly
8. Which economic system is based on private ownership of resources and
supply and demand determining prices? a) Capitalism b) Socialism c)
Communism d) Mixed economy Answer: a) Capitalism
9. The document that outlines a company's mission, vision, and objectives,
and how it plans to achieve them is called: a) Business plan b) Marketing
plan c) Strategic plan d) Financial plan Answer: c) Strategic plan
10.When a company lowers the price of a product to attract customers and
gain market share, it is an example of: a) Price discrimination b)
Penetration pricing c) Premium pricing d) Skimming pricing Answer: b)
Penetration pricing
11.A measure of a company's profitability, calculated as net income divided
by revenue, is called: a) Return on Assets (ROA) b) Return on Investment
(ROI) c) Gross Profit Margin d) Net Profit Margin Answer: d) Net Profit
Margin
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PROF. SHOAIB MIRZA JINNAH COMMERCE ACADEMY SARGODHA 0343-0707116
12.Which financial statement shows a company's revenues and expenses

over a specific period of time? a) Balance sheet b) Income statement c)
Cash flow statement d) Statement of retained earnings Answer: b)
Income statement
13.The process of identifying and attracting qualified candidates for a job
vacancy is known as: a) Training b) Recruitment c) Selection d)
Performance appraisal Answer: b) Recruitment
14.What type of leadership style involves making decisions without seeking
input from subordinates? a) Democratic leadership b) Laissez-faire
leadership c) Authoritarian leadership d) Transformational leadership
Answer: c) Authoritarian leadership
15.A technique used to evaluate a company's internal and external
environment to formulate strategies is called: a) SWOT analysis b) PEST
analysis c) BCG matrix d) Porter's Five Forces analysis Answer: a) SWOT
analysis
16.The process of designing, testing, and launching new products or services
is known as: a) Market segmentation b) Market research c) Product
development d) Product differentiation Answer: c) Product development
17.Which of the following is a measure of a company's efficiency in using its
assets to generate sales? a) Inventory turnover ratio b) Debt-to-Equity
ratio c) Current ratio d) Return on Equity (ROE) Answer: a) Inventory
turnover ratio
18.In the context of international trade, what does the acronym "GATT"
stand for? a) General Agreement on Tariffs and Taxes b) General
Agreement on Trade and Tariffs c) General Agreement on Tariffs and
Trade d) General Agreement on Trade and Taxes Answer: c) General
Agreement on Tariffs and Trade
19.A temporary union of two or more companies to undertake a specific
project is known as: a) Merger b) Acquisition c) Joint venture d) Strategic
alliance Answer: c) Joint venture
20.The process of influencing people to work towards achieving specific
organizational goals is called: a) Controlling b) Directing c) Planning d)
Organizing Answer: b) Directing
21.The legal protection of original works of authorship, such as books,
music, and software, is known as: a) Trademark b) Patent c) Copyright d)
Trade secret Answer: c) Copyright
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22.What type of marketing communication focuses on creating a positive

image and goodwill around a brand? a) Public relations (PR) b) Personal
selling c) Direct marketing d) Sales promotion Answer: a) Public relations
(PR)
23.Which of the following is a financial ratio used to assess a company's
short-term liquidity? a) Return on Assets (ROA) b) Debt-to-Equity ratio c)
Current ratio d) Gross Profit Margin Answer: c) Current ratio
24.The process of dividing a larger market into smaller homogeneous
groups based on characteristics is called: a) Market positioning b)
Market segmentation c) Market targeting d) Market differentiation
Answer: b) Market segmentation
25.In the context of supply chain management, what does the acronym
"ERP" stand for? a) Efficient Resource Planning b) Enterprise Resource
Planning c) Effective Resource Process d) Essential Resource Platform
Answer: b) Enterprise Resource Planning
26.The measure of the sensitivity of demand for a product relative to
changes in its price is called: a) Price elasticity of demand b) Cross
elasticity of demand c) Income elasticity of demand d) Elasticity of
substitution Answer: a) Price elasticity of demand
27.Which of the following statements is true about a monopoly? a) There
are many sellers, and each seller offers a slightly different product. b)
There is only one seller dominating the market. c) There are a few sellers
offering products that are close substitutes for each other. d) There is
perfect competition among sellers. Answer: b) There is only one seller
dominating the market.
28.The process of examining an organization's internal structure and
systems is known as: a) Strategic planning b) Performance appraisal c)
Organization analysis d) Market research Answer: c) Organization
analysis
29.What is a financial market where new securities are issued to the public
for the first time? a) Secondary market b) Money market c) Capital
market d) Primary market Answer: d) Primary market
30.The economic concept that suggests that as more units of a product are
produced, the cost of each unit decreases is called: a) Economies of scale
b) Diseconomies of scale c) Opportunity cost d) Comparative advantage
Answer: a) Economies of scale
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31.Which of the following is an example of a fixed cost for a manufacturing

company? a) Raw material cost b) Labour cost c) Rent for the production
facility d) Sales commission Answer: c) Rent for the production facility
32.The process of forecasting future demand for a company's products or
services is known as: a) Supply chain management b) Inventory control c)
Demand forecasting d) Just-in-time (JIT) inventory system Answer: c)
Demand forecasting
33.The system that allows a buyer and seller to conduct transactions over
the internet is known as: a) E-commerce b) M-commerce c) Online
banking d) Digital marketing Answer: a) E-commerce
34.Which financial statement provides a snapshot of a company's financial
position at a specific point in time? a) Income statement b) Balance sheet
c) Cash flow statement d) Statement of retained earnings Answer: b)
Balance sheet
35.The process of hiring individuals from outside the organization to fill
vacant positions is known as: a) Succession planning b) Internal
recruitment c) External recruitment d) Talent management Answer: c)
External recruitment
36.In the context of marketing, the "4 Ps" represent: a) Product, Price,
Promotion, Placement b) Planning, Production, Packaging, Profit c)
Positioning, Perception, Pricing, Profitability d) Publicity, Promotion,
Packaging, Pricing Answer: a) Product, Price, Promotion, Placement
37.The risk associated with changes in government regulations, political
instability, and international relations is known as: a) Market risk b)
Political risk c) Credit risk d) Operational risk Answer: b) Political risk
38.What is a budgetary control tool that compares actual financial
performance to planned performance over a specific period? a) Balance
sheet b) Income statement c) Cash flow statement d) Variance analysis
Answer: d) Variance analysis
39.The process of analyzing competitors to identify their strengths and
weaknesses relative to one's own business is called: a) Competitive
analysis b) Market analysis c) Consumer analysis d) Product analysis
Answer: a) Competitive analysis
40.The practice of selling goods or services below cost to drive competitors
out of the market is known as: a) Predatory pricing b) Penetration pricing
c) Premium pricing d) Price skimming Answer: a) Predatory pricing
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41.What type of organizational structure is characterized by a clear, top-to-

bottom chain of command? a) Matrix structure b) Flat structure c) Tall
structure d) Network structure Answer: c) Tall structure
42.The economic indicator that measures the average change in prices for a
basket of goods and services is called: a) Consumer Price Index (CPI) b)
Gross Domestic Product (GDP) c) Producer Price Index (PPI) d) Retail
Sales Index (RSI) Answer: a) Consumer Price Index (CPI)
43.The process of determining the value of a company or an asset by
examining its financial statements is called: a) Valuation b) Appraisal c)
Assessment d) Estimation Answer: a) Valuation
44.Which of the following is a form of international trade restriction that
sets a limit on the quantity of imported goods? a) Quota b) Tariff c)
Subsidy d) Embargo Answer: a) Quota
45.The process of distributing authority and decision-making to lower-level
employees is known as: a) Centralization b) Decentralization c)
Delegation d) Empowerment Answer: b) Decentralization
46.A company's total revenue minus all costs and expenses, including taxes,
is known as: a) Gross profit b) Net profit c) Operating profit d) EBITDA
(Earnings Before Interest, Taxes, Depreciation, and Amortization)
Answer: b) Net profit
47.Which of the following is a financial ratio used to measure a company's
ability to meet its short-term obligations? a) Debt-to-Equity ratio b)
Return on Equity (ROE) c) Current ratio d) Gross Profit Margin Answer: c)
Current ratio
48.The process of systematically collecting, analyzing, and interpreting data
about a market and its potential customers is called: a) Market
segmentation b) Market research c) Product development d) Market
positioning Answer: b) Market research
49.The acronym "ROI" stands for: a) Return on Investment b) Return on
Inventory c) Return on Income d) Return on Innovation Answer: a) Return
on Investment
50.A legal form of business in which the owners have unlimited personal
liability for the company's debts is called: a) Partnership b) Sole
proprietorship c) Corporation d) Limited Liability Company (LLC) Answer:
b) Sole proprietorship
CHAPTER 2 sole proprietorship

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51.A sole proprietorship is a business structure: a) Owned by multiple

individuals b) Owned by one individual c) Owned by a corporation d)
Owned by a partnership Answer: b) Owned by one individual
52.In a sole proprietorship, who is responsible for all aspects of the
business? a) Shareholders b) Board of Directors c) Owner d) Managers
Answer: c) Owner
53.One of the primary advantages of a sole proprietorship is: a) Limited
liability b) Ease of formation c) Access to a large pool of capital d) No tax
obligations Answer: b) Ease of formation
54.Which statement about a sole proprietor's liability is true? a) The owner's
liability is limited to their investment in the business. b) The owner's
personal assets are at risk for business debts. c) The owner is only liable
for business debts if the business is profitable. d) The owner's liability is
shared with other business partners. Answer: b) The owner's personal
assets are at risk for business debts.
55.The legal distinction between a sole proprietorship and its owner is: a)
Unlimited liability b) Limited liability c) Separate legal entity d)
Partnership agreement Answer: c) Separate legal entity
56.Which financial statement shows the revenues, expenses, and net
income of a sole proprietorship? a) Balance sheet b) Income statement c)
Cash flow statement d) Statement of retained earnings Answer: b)
Income statement
57.The owner of a sole proprietorship reports business income and losses on
their: a) Personal income tax return b) Corporate tax return c)
Partnership tax return d) Trust tax return Answer: a) Personal income tax
return
58.What permits a sole proprietor to operate under a name different from
their legal name? a) Trade agreement b) Business license c) Fictitious
business name (DBA) d) Partnership agreement Answer: c) Fictitious
business name (DBA)
59.In a sole proprietorship, who has the authority to make all business
decisions? a) Shareholders b) Board of Directors c) Employees d) Owner
Answer: d) Owner
60.Which factor makes it easier for a sole proprietorship to raise capital
compared to larger business structures? a) Public listing b) Access to
financial markets c) Limited liability d) Direct contributions from multiple
owners Answer: d) Direct contributions from multiple owners
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61.The termination of a sole proprietorship may occur due to: a) Bankruptcy

b) Partnership disputes c) Market competition d) Succession planning
Answer: a) Bankruptcy
62.Which type of insurance is typically recommended for sole proprietors to
protect against liability claims? a) Health insurance b) Home insurance c)
Property insurance d) Liability insurance Answer: d) Liability insurance
63.A sole proprietorship's profits are taxed as: a) Corporate income tax b)
Capital gains tax c) Personal income tax d) Excise tax Answer: c) Personal
income tax
64.What type of business expenses can a sole proprietor typically deduct for
tax purposes? a) Personal expenses b) Entertainment expenses c)
Business expenses only d) Business and personal expenses combined
Answer: c) Business expenses only
65.One of the disadvantages of a sole proprietorship is: a) Limited access to
credit b) High formation costs c) Limited control over decision-making d)
No personal liability for debts Answer: a) Limited access to credit
66.A sole proprietor can benefit from which tax advantage compared to
larger business structures? a) Lower tax rates b) Tax credits c) Pass-
through taxation d) Tax exemptions Answer: c) Pass-through taxation
67.The primary source of funding for a sole proprietorship is typically: a)
Bank loans b) Venture capital c) Personal savings d) Shareholder
contributions Answer: c) Personal savings
68.Which government agency is responsible for registering and regulating
business entities, including sole proprietorships? a) Federal Trade
Commission (FTC) b) Securities and Exchange Commission (SEC) c)
Internal Revenue Service (IRS) d) Department of Commerce Answer: c)
Internal Revenue Service (IRS)
69.Which business structure is considered the simplest and least costly to
form? a) Corporation b) Limited Liability Company (LLC) c) Sole
proprietorship d) Partnership Answer: c) Sole proprietorship
70.A sole proprietorship is often suitable for small businesses with: a) High
capital requirements b) Numerous shareholders c) Complex ownership
structures d) Limited funding needs Answer: d) Limited funding needs
71.In a sole proprietorship, who receives all the profits from the business? a)
Shareholders b) Board of Directors c) Employees d) Owner Answer: d)
Owner
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72.What type of liability does a sole proprietor have for the debts and
obligations of the business? a) Unlimited liability b) Limited liability c)
Joint liability d) Shared liability Answer: a) Unlimited liability
73.A major drawback of a sole proprietorship is that it lacks: a) Limited
liability protection b) Ease of formation c) Flexibility in decision-making
d) Independence from government regulations Answer: a) Limited
liability protection
74.The process by which a sole proprietorship can expand by adding more
locations or branches is known as: a) Franchising b) Diversification c)
Mergers and acquisitions d) Incorporation Answer: b) Diversification
75.Which form of business organization is most common among small
businesses? a) Corporation b) Limited Liability Company (LLC) c)
Partnership d) Sole proprietorship Answer: d) Sole proprietorship
76.The end of a sole proprietorship occurs when the owner: a) Sells the
business to another party b) Passes away c) Files for bankruptcy d)
Decides to retire Answer: b) Passes away
77.In a sole proprietorship, which of the following may be considered a
disadvantage when compared to other business structures? a) Tax
advantages b) Limited personal liability c) Complexity of formation d)
Ability to raise capital Answer: c) Complexity of formation
78.A sole proprietor is not required to hold regular meetings or maintain
formal records, which is a benefit in terms of: a) Ease of management b)
Public disclosure requirements c) Decision-making efficiency d) Limited
liability Answer: a) Ease of management
79.The legal documents required to start and operate a sole proprietorship
are: a) Articles of Incorporation b) Operating Agreement c) Partnership
Agreement d) Not required for a sole proprietorship Answer: d) Not
required for a sole proprietorship
80.Which of the following is an example of a sole proprietorship? a) A
multinational corporation b) A family-owned business c) A government
agency d) A limited partnership Answer: b) A family-owned business
81.A sole proprietorship has a higher risk of financial failure because: a) It
lacks access to credit facilities b) It has limited liability protection c) It
depends on a single owner's resources d) It cannot generate significant
profits Answer: c) It depends on a single owner's resources
82.Which of the following is an advantage of a sole proprietorship? a)
Limited personal liability b) Shared decision-making c) Enhanced access
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to capital d) Ability to issue shares to the public Answer: a) Limited

personal liability
83.In a sole proprietorship, business losses are: a) Shared among the
partners b) Offset against personal income c) Deducted from capital
investments d) Paid off through government subsidies Answer: b) Offset
against personal income
84.A sole proprietorship can be converted into a different business structure,
such as a corporation, by: a) Merging with another company b) Changing
the ownership structure c) Selling shares to the public d) Incorporating
the business Answer: d) Incorporating the business
85.What is the main disadvantage of a sole proprietorship regarding the
continuity of the business? a) Lack of available funding b) Potential for
partnership disputes c) Dependency on the owner's lifespan d) Difficulty
in attracting customers Answer: c) Dependency on the owner's lifespan
86.Which type of businesses are most commonly structured as sole
proprietorships? a) Large corporations b) Nonprofit organizations c)
Family-owned businesses d) Government agencies Answer: c) Family-
owned businesses
87.The process of voluntarily ending a sole proprietorship is called: a)
Dissolution b) Bankruptcy c) Acquisition d) Merger Answer: a) Dissolution
88.A sole proprietor can avoid double taxation, a common issue in
corporations, because the business: a) Files separate tax returns from the
owner b) Qualifies for tax deductions unavailable to other business
structures c) Passes its profits and losses through to the owner's personal
tax return d) Establishes a tax-free reinvestment plan Answer: c) Passes
its profits and losses through to the owner's personal tax return
89.In a sole proprietorship, who ultimately benefits from the business's
success? a) Shareholders b) Board of Directors c) Employees d) Owner
Answer: d) Owner
90.What distinguishes a sole proprietorship from other business structures
concerning its legal status? a) It requires a formal partnership
agreement. b) It is considered a separate legal entity from its owner. c) It
is owned by multiple individuals. d) It has unlimited liability for its debts.
Answer: b) It is considered a separate legal entity from its owner.
91.A sole proprietorship must comply with all applicable local, state, and
federal: a) Tax laws b) Environmental regulations c) Intellectual property
laws d) Stock market regulations Answer: a) Tax laws
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92.The legal documents required to start a sole proprietorship depend on

the: a) Number of employees b) Business location c) Industry type d)
Jurisdiction's requirements Answer: d) Jurisdiction's requirements
93.The legal registration of a sole proprietorship may be necessary to: a)
Establish limited liability protection b) Secure a patent for a new
invention c) Access venture capital funding d) Comply with local business
regulations Answer: d) Comply with local business regulations
94.Which of the following best describes the decision-making process in a
sole proprietorship? a) Shared among multiple owners b) Centralized
with one owner c) Decentralized with a board of directors d) Governed by
a partnership agreement Answer: b) Centralized with one owner
95.What is a significant disadvantage of a sole proprietorship regarding
business growth and expansion? a) Limited access to capital b)
Complexity of formation c) Shareholders' influence d) Partnership
disputes Answer: a) Limited access to capital
96.In a sole proprietorship, who owns all the assets of the business? a)
Shareholders b) Board of Directors c) Employees d) Owner Answer: d)
Owner
97.What is a major drawback of a sole proprietorship concerning business
continuity? a) Difficulty in dissolving the business b) Dependence on a
single owner c) Complex ownership structure d) Lack of access to public
markets Answer: b) Dependence on a single owner
98.A significant benefit of a sole proprietorship is the ability to: a) Share
profits with multiple owners b) Raise large amounts of capital through
stock issuance c) Allocate decision-making responsibilities among
directors d) Make quick decisions without consultation Answer: d) Make
quick decisions without consultation
99.The liability of a sole proprietorship extends to the: a) Business assets
only b) Business assets and owner's personal assets c) Owner's personal
assets only d) Shareholders' personal assets Answer: b) Business assets
and owner's personal assets
100. What characteristic makes a sole proprietorship different from a
corporation or LLC in terms of taxation? a) Pass-through taxation b)
Ability to carry forward losses c) Reduced tax rates d) Deduction of
business expenses Answer: a) Pass-through taxation
CHAPTER 3 partnership
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101. In Pakistan, the law that governs partnerships is known as: a) The
Companies Act b) The Partnership Act c) The Business Registration Act d)
The Contract Act Answer: b) The Partnership Act
102. How many minimum and maximum partners are required to form
a partnership in Pakistan? a) Minimum 2 partners, no maximum limit b)
Minimum 3 partners, no maximum limit c) Minimum 2 partners,
maximum 10 partners d) Minimum 5 partners, no maximum limit
Answer: a) Minimum 2 partners, no maximum limit
103. In a partnership, the liability of partners is: a) Limited to their
capital contribution b) Limited to their share of profits c) Unlimited and
joint d) Limited to their individual actions Answer: c) Unlimited and joint
104. The duration for which a partnership agreement is entered into in
Pakistan must not exceed: a) 2 years b) 5 years c) 10 years d) There is no
restriction on the duration Answer: d) There is no restriction on the
duration
105. The maximum number of partners in a banking partnership in
Pakistan is: a) 10 b) 20 c) 50 d) 100 Answer: c) 50
106. What is the maximum punishment for a partner who wrongfully
carries on business after the dissolution of the partnership in Pakistan? a)
Imprisonment for 1 year b) Fine up to Rs. 50,000 c) Fine up to Rs. 100,000
d) Unlimited fine and imprisonment for 2 years Answer: d) Unlimited fine
and imprisonment for 2 years
107. In a partnership, if no agreement exists, profits and losses are
shared among partners: a) Equally b) Based on the amount of capital
contributed c) Based on the workload of each partner d) Proportionately
to the ratio of their investment Answer: a) Equally
108. Which type of partner is not liable for the debts and obligations of
the partnership beyond their agreed contribution? a) Active partner b)
Sleeping partner c) Nominal partner d) Secret partner Answer: b)
Sleeping partner
109. A partnership firm in Pakistan can be formed: a) Verbally b)
Through a written agreement c) Through an oral or written agreement d)
Only by a registered deed Answer: c) Through an oral or written
agreement
110. What is the maximum number of partners allowed in a
professional partnership (e.g., law, medicine) in Pakistan? a) 5 b) 10 c) 20
d) 50 Answer: a) 5
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111. In the absence of a partnership agreement, partners are entitled

to interest on capital at the rate of: a) 5% per annum b) 6% per annum c)
8% per annum d) 12% per annum Answer: b) 6% per annum
112. When a partner's retirement leads to the dissolution of a
partnership, the firm's assets are used to pay: a) The retiring partner's
capital b) The retiring partner's loan to the firm c) The retiring partner's
salary d) The retiring partner's share of goodwill Answer: b) The retiring
partner's loan to the firm
113. In Pakistan, a partnership firm's name should not contain words
that suggest a connection with the: a) Government b) Foreign country c)
Religious affiliation d) All of the above Answer: d) All of the above
114. In a partnership, if a partner is found guilty of misconduct in the
conduct of the partnership, they can be: a) Fined by the court b) Expelled
by other partners c) Imprisoned for up to 1 year d) Forced to buy out
other partners' shares Answer: b) Expelled by other partners
115. In a partnership, partners can agree to share profits and losses in a
ratio different from their capital contribution: a) Only if agreed upon at
the time of formation b) Only if unanimously approved by all partners c)
With the consent of a majority of partners d) At any time during the
partnership Answer: a) Only if agreed upon at the time of formation
116. In Pakistan, a partner can be expelled from the firm if a majority of
partners agree and: a) The partner is found guilty of misconduct b) The
partner fails to make a capital contribution c) The partner has a health
condition d) The partner's performance is unsatisfactory Answer: a) The
partner is found guilty of misconduct
117. When a partnership firm is dissolved, the first step is to settle the:
a) Liabilities of the firm b) Claims of the partners c) Share of goodwill d)
Salaries of the employees Answer: a) Liabilities of the firm
118. What is the minimum age of a person to become a partner in a
partnership firm in Pakistan? a) 18 years b) 21 years c) 25 years d) There
is no minimum age requirement Answer: d) There is no minimum age
requirement
119. In a partnership, any change in the profit-sharing ratio among
existing partners requires the consent of: a) All partners b) Majority of
partners c) Minority of partners d) The court Answer: a) All partners
120. A partner who is known to the outside world and whose name is
included in the firm's name is called a: a) Active partner b) Nominal
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partner c) Sleeping partner d) Partner by estoppel Answer: d) Partner by

estoppel
121. In the absence of an agreement, partners in a partnership are not
entitled to receive: a) Interest on capital b) Salary or commission c) Share
of goodwill d) Share of profits Answer: b) Salary or commission
122. What is the maximum punishment for a partner who carries on
business with a person of unsound mind in Pakistan? a) Fine up to Rs.
50,000 b) Imprisonment for 2 years c) Fine up to Rs. 100,000 d)
Imprisonment for 3 years Answer: b) Imprisonment for 2 years
123. A partner who actively participates in the management of the
partnership is known as an: a) Active partner b) Sleeping partner c)
Nominal partner d) Working partner Answer: a) Active partner
124. What is the maximum punishment for a partner who
misappropriates the firm's property for their personal use? a) Fine up to
Rs. 100,000 b) Imprisonment for 2 years c) Fine up to Rs. 200,000 d)
Imprisonment for 3 years Answer: d) Imprisonment for 3 years
125. In the case of a minor becoming a partner, their liability in the
partnership is: a) Limited to their capital contribution b) Limited to their
share of profits c) Joint and several with other partners d) Limited to their
personal actions Answer: a) Limited to their capital contribution
126. The retirement of a partner does not dissolve the partnership
unless: a) The retiring partner withdraws their capital b) The remaining
partners agree to dissolve c) The retiring partner gives notice to the
Registrar of Firms d) The partnership agreement stipulates dissolution
Answer: d) The partnership agreement stipulates dissolution
127. Which type of partner is not actively involved in the partnership's
management but has agreed to share the profits and losses? a) Active
partner b) Sleeping partner c) Nominal partner d) Secret partner Answer:
b) Sleeping partner
128. When a minor attains majority and continues to be a partner, their
liability will: a) Increase proportionately b) Be joint and several with
other partners c) Remain limited to their capital contribution d) Be
limited to their share of profits Answer: c) Remain limited to their capital
contribution
129. Which type of partner has not contributed any capital to the
partnership but allows their name to be used in the firm's name? a)
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Active partner b) Sleeping partner c) Nominal partner d) Partner by

estoppel Answer: c) Nominal partner
130. The partnership agreement in Pakistan should be in: a) Oral form
b) Writing c) Stamped form d) Notarized form Answer: b) Writing
131. In Pakistan, a partner can transfer their share of profits and losses
to a third party: a) With the consent of all other partners b) Only if the
partnership is dissolved c) Only if the partnership agreement allows for it
d) With the consent of a majority of partners Answer: c) Only if the
partnership agreement allows for it
132. A partner in Pakistan cannot assign their partnership share to a
third party without: a) The consent of all other partners b) The consent of
the court c) The consent of a majority of partners d) The consent of the
Registrar of Firms Answer: a) The consent of all other partners
133. Which type of partnership is formed for a specific project or a
particular period? a) General partnership b) Limited partnership c)
Partnership at will d) Particular partnership Answer: d) Particular
partnership
134. In a partnership, if a minor attains majority and decides not to
continue as a partner, they must give public notice of their: a) Discharge
b) Death c) Retirement d) Insanity Answer: c) Retirement
135. In the absence of a partnership agreement, partners are not
entitled to receive: a) Interest on capital b) Salary or commission c) Share
of goodwill d) Share of profits Answer: b) Salary or commission
136. What is the maximum number of partners allowed in a partnership
firm for carrying on banking business in Pakistan? a) 5 b) 10 c) 20 d) 50
Answer: c) 20
137. In Pakistan, which type of partner is liable for all the debts of the
partnership, even without their active participation? a) Active partner b)
Sleeping partner c) Nominal partner d) Partner by estoppel Answer: d)
Partner by estoppel
138. A partnership agreement in Pakistan is void if it is created for the
purpose of: a) Doing charity work b) Carrying on a lawful business c)
Sharing profits and losses d) Fraudulent activities Answer: d) Fraudulent
activities
139. In Pakistan, a partnership firm cannot sue a third party, nor can it
be sued by a third party in the name of the firm, unless: a) It is a general
partnership b) It is registered with the Registrar of Firms c) The
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partnership agreement allows it d) All partners give their consent

Answer: b) It is registered with the Registrar of Firms
140. A partner's implied authority in a partnership covers actions that
are: a) Necessary for the usual business operations b) Exceeding the
scope of normal business activities c) Carried out in secret d) Limited to
the partner's capital contribution Answer: a) Necessary for the usual
business operations
141. In a partnership, if one partner's actions cause loss to the firm, the
other partners are: a) Not liable for the loss b) Liable for the loss jointly
and severally c) Liable for the loss proportionately to their investment d)
Liable for the loss based on their share of profits Answer: b) Liable for the
loss jointly and severally
142. In a partnership, if a partner's loan to the firm carries interest, the
interest is payable: a) Only if the partnership agreement allows for it b)
Without the partner's consent c) With the consent of all other partners d)
Only if the firm makes a profit Answer: a) Only if the partnership
agreement allows for it
143. A minor partner in Pakistan can become a full-fledged partner
upon attaining majority: a) With the consent of all other partners b)
Without the consent of all other partners c) Only if the partnership
agreement allows it d) Only if a majority of partners agree Answer: b)
Without the consent of all other partners
144. In a partnership, partners have an implied authority to act in
matters: a) Within the scope of normal business activities b) Exceeding
the scope of normal business activities c) Pertaining to their personal
interests d) Pertaining to charitable activities Answer: a) Within the
scope of normal business activities
145. In Pakistan, which type of partnership requires registration with
the Registrar of Firms? a) General partnership b) Limited partnership c)
Partnership at will d) Particular partnership Answer: b) Limited
partnership
146. What is the minimum age for a person to be admitted as a partner
in a partnership firm in Pakistan? a) 16 years b) 18 years c) 21 years d) 25
years Answer: b) 18 years
147. In Pakistan, a partner can withdraw their capital: a) At any time
during the partnership b) Only with the consent of all other partners c)
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Only if the partnership agreement allows it d) Only if the firm makes a

profit Answer: a) At any time during the partnership
148. What is the maximum number of partners allowed in a partnership
firm for carrying on insurance business in Pakistan? a) 5 b) 10 c) 20 d) 50
Answer: b) 10
149. When a minor attains majority and decides to continue as a
partner, their liability in the partnership will be: a) Limited to their share
of profits b) Limited to their personal actions c) Joint and several with
other partners d) Limited to their capital contribution Answer: d) Limited
to their capital contribution
150. In the case of a minor becoming a partner, the agreement
becomes void: a) At the time of majority b) At the time of retirement c)
At the time of admission as a partner d) At the time of dissolution
Answer: a) At the time of majority
CHAPTER 4 joint stock company

151. A joint stock company is a form of business organization that: a) Is
owned by a single individual b) Is owned by multiple individuals c) Is
owned by the government d) Is not a legal entity Answer: b) Is owned by
multiple individuals
152. The owners of a joint stock company are called: a) Partners b)
Shareholders c) Directors d) Promoters Answer: b) Shareholders
153. The liability of shareholders in a joint stock company is: a) Limited
to their investment in the company b) Unlimited and joint c) Limited to
their share of profits d) Limited to their personal actions Answer: a)
Limited to their investment in the company
154. A joint stock company is managed by: a) Shareholders b) Board of
Directors c) Promoters d) Government officials Answer: b) Board of
Directors
155. The document that sets forth the rules and regulations for the
internal management of a joint stock company is known as the: a)
Memorandum of Association b) Articles of Association c) Prospectus d)
Certificate of Incorporation Answer: b) Articles of Association
156. Which type of joint stock company can issue shares to the general
public and has its shares traded on the stock exchange? a) Private limited
company b) Public limited company c) Government company d) Non-
profit company Answer: b) Public limited company
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157. A joint stock company is considered a separate legal entity from its
shareholders, which means that: a) The company cannot enter into
contracts b) The company cannot own property c) The company can sue
and be sued in its own name d) The company cannot pay taxes Answer:
c) The company can sue and be sued in its own name
158. The minimum number of shareholders required to form a public
limited company in most jurisdictions is: a) 2 b) 5 c) 10 d) 50 Answer: c)
10
159. The capital of a joint stock company is divided into small units
called: a) Partnerships b) Dividends c) Shares d) Debentures Answer: c)
Shares
160. The first step in the formation of a joint stock company is the
submission of the: a) Memorandum of Association b) Articles of
Association c) Prospectus d) Certificate of Incorporation Answer: a)
Memorandum of Association
161. In a joint stock company, the shareholders are entitled to a portion
of the company's profits called: a) Dividends b) Interest c) Royalties d)
Salaries Answer: a) Dividends
162. The process by which a private company becomes a public
company and offers its shares to the general public is called: a) Merger
b) Amalgamation c) Privatization d) Initial Public Offering (IPO) Answer:
d) Initial Public Offering (IPO)
163. A joint stock company can raise capital by issuing: a) Bonds b)
Debentures c) Shares d) All of the above Answer: d) All of the above
164. The process by which a joint stock company is legally recognized as
a separate entity is called: a) Registration b) Incorporation c) Approval d)
Accreditation Answer: b) Incorporation
165. In a joint stock company, the ultimate decision-making authority
rests with the: a) Shareholders b) Board of Directors c) CEO d)
Government Answer: a) Shareholders
166. A joint stock company is dissolved when: a) The shareholders
decide to dissolve it b) The CEO resigns c) The company becomes
bankrupt d) It completes its project or the specified time duration
Answer: a) The shareholders decide to dissolve it
167. The shares of a joint stock company can be transferred from one
shareholder to another: a) Only with the consent of the government b)
Only if the company is bankrupt c) Freely without the company's consent
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d) Only with the approval of all other shareholders Answer: c) Freely

without the company's consent
168. A company that is owned and controlled by the government is
known as a: a) Private limited company b) Public limited company c)
Government company d) Foreign company Answer: c) Government
company
169. A joint stock company can protect its shareholders by offering: a)
Limited liability b) Unlimited liability c) Unlimited profits d) Unlimited
dividends Answer: a) Limited liability
170. Which type of company cannot issue shares to the general public
and has restrictions on the transfer of shares? a) Private limited company
b) Public limited company c) Government company d) Foreign company
Answer: a) Private limited company
171. The highest decision-making body in a joint stock company is the:
a) CEO b) Shareholders c) Board of Directors d) Company Secretary
Answer: b) Shareholders
172. The authorized capital of a joint stock company represents: a) The
total number of shares issued to the public b) The total number of shares
held by the shareholders c) The maximum amount of capital the
company can raise by issuing shares d) The total assets of the company
Answer: c) The maximum amount of capital the company can raise by
issuing shares
173. In a joint stock company, the shareholders' right to participate in
the management is usually based on: a) The number of shares held by
each shareholder b) The age of the shareholder c) The nationality of the
shareholder d) The gender of the shareholder Answer: a) The number of
shares held by each shareholder
174. A joint stock company can issue debentures to raise capital, which
are: a) Equity securities b) Non-voting shares c) Long-term debt
instruments d) Short-term debt instruments Answer: c) Long-term debt
instruments
175. The process by which a joint stock company distributes its profits
to shareholders is known as: a) Capitalization b) Dividend c) Liquidation
d) Merger Answer: b) Dividend
176. A joint stock company can raise additional capital through rights
issue, which means: a) Selling shares to the general public b) Allowing
existing shareholders to buy additional shares at a discount c) Offering
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shares to employees as part of their compensation package d) Giving

away shares for free to charity organizations Answer: b) Allowing
existing shareholders to buy additional shares at a discount
177. The process by which a joint stock company is voluntarily
terminated and its assets are distributed to its shareholders is known as:
a) Dissolution b) Liquidation c) Incorporation d) Amalgamation Answer:
b) Liquidation
178. The board of directors of a joint stock company is responsible for:
a) Issuing shares to the public b) Making day-to-day business decisions c)
Overseeing the company's operations and setting policies d) Approving
the company's annual budget Answer: c) Overseeing the company's
operations and setting policies
179. The process by which two or more joint stock companies merge to
form a single entity is known as: a) Liquidation b) Amalgamation c)
Incorporation d) Dissolution Answer: b) Amalgamation
180. The shares of a joint stock company can be listed and traded on
the stock exchange, providing liquidity to shareholders through: a) Initial
Public Offering (IPO) b) Secondary market trading c) Dividend distribution
d) Merger with other companies Answer: b) Secondary market trading
181. The legal document that defines the company's name, location,
objectives, and capital structure is known as the: a) Memorandum of
Association b) Articles of Association c) Prospectus d) Certificate of
Incorporation Answer: a) Memorandum of Association
182. In a joint stock company, the ownership interest of each
shareholder is represented by: a) Bonds b) Debentures c) Shares d)
Promissory notes Answer: c) Shares
183. The process by which a joint stock company is involuntarily
terminated due to financial difficulties is known as: a) Dissolution b)
Liquidation c) Incorporation d) Amalgamation Answer: b) Liquidation
184. The minimum number of directors required to form a public limited
company in most jurisdictions is: a) 2 b) 3 c) 5 d) 7 Answer: b) 3
preparation of the: a) Memorandum of Association b) Articles of
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186. The joint stock company is different from a partnership in terms of:
a) Liability of owners b) Ownership structure c) Management control d)
All of the above Answer: d) All of the above
187. A joint stock company can be private or public depending on: a)
The number of shareholders b) The location of the company c) The
industry it operates in d) The amount of capital raised Answer: a) The
number of shareholders
188. Which type of joint stock company can have a maximum of 200
shareholders and restricts the transfer of shares? a) Private limited
profit company Answer: a) Private limited company
189. The capital of a joint stock company is divided into a fixed number
of shares, each having a specific: a) Face value b) Market value c)
Dividend rate d) Liquidation value Answer: a) Face value
190. A joint stock company issues a document to the public that
contains information about the company and its shares. This document is
called the: a) Memorandum of Association b) Articles of Association c)
Prospectus d) Certificate of Incorporation Answer: c) Prospectus
191. The shareholders of a joint stock company appoint the board of
directors through: a) Voting b) Lottery system c) Appointment by the
government d) Appointment by the CEO Answer: a) Voting
192. In a joint stock company, the shareholders' liability is limited to the
amount unpaid on their shares if the shares are: a) Fully paid-up shares
b) Partly paid-up shares c) Non-voting shares d) Redeemable shares
Answer: b) Partly paid-up shares
193. A joint stock company can raise capital by issuing bonds, which
are: a) Equity securities b) Non-voting shares c) Long-term debt
instruments d) Short-term debt instruments Answer: c) Long-term debt
instruments
194. A joint stock company can be dissolved voluntarily by passing a
resolution in a general meeting with the approval of: a) A majority of
shareholders b) All shareholders c) The CEO d) The government Answer:
a) A majority of shareholders
195. A joint stock company can raise additional capital by issuing new
shares to its existing shareholders through a process called: a) Secondary
offering b) Rights issue c) Initial Public Offering (IPO) d) Dividend
reinvestment plan Answer: b) Rights issue
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196. Which type of joint stock company can have a maximum of 50

shareholders and restricts the transfer of shares? a) Private limited
profit company Answer: a) Private limited company
197. The process by which a joint stock company is voluntarily
terminated and its assets are distributed to its shareholders is known as:
a) Dissolution b) Liquidation c) Incorporation d) Amalgamation Answer:
b) Liquidation
submission of the: a) Memorandum of Association b) Articles of
199. In a joint stock company, the shareholders' right to participate in
the management is usually based on: a) The number of shares held by
each shareholder b) The age of the shareholder c) The nationality of the
shareholder d) The gender of the shareholder Answer: a) The number of
shares held by each shareholder
200. A joint stock company can protect its shareholders by offering: a)
Limited liability b) Unlimited liability c) Unlimited profits d) Unlimited
dividends Answer: a) Limited liability
CHAPTER 5 company stakeholders

201. Who are stakeholders of a company? a) Shareholders only b)
Employees only c) Individuals or groups with an interest in the company's
activities and performance d) Board of Directors Answer: c) Individuals or
groups with an interest in the company's activities and performance
202. Which of the following is NOT considered a company stakeholder?
a) Shareholders b) Customers c) Competitors d) Employees Answer: c)
Competitors
203. Stakeholders of a company can include all of the following EXCEPT:
a) Government agencies b) Local communities c) Suppliers d)
Competitors Answer: d) Competitors
204. Why are stakeholders important for a company? a) They provide
funding to the company b) They have legal ownership of the company c)
They influence the company's success and sustainability d) They are
responsible for day-to-day operations Answer: c) They influence the
company's success and sustainability
21
205. Shareholders are stakeholders who: a) Own shares of the company

b) Are employees of the company c) Are suppliers to the company d) Are
customers of the company Answer: a) Own shares of the company
206. Employees are stakeholders because they: a) Hold shares of the
company b) Are customers of the company c) Are directly affected by the
company's performance and decisions d) Have legal ownership of the
company Answer: c) Are directly affected by the company's performance
and decisions
207. Which stakeholder group is concerned about the company's ethical
and social responsibility practices? a) Shareholders b) Customers c)
Employees d) Activists and NGOs Answer: d) Activists and NGOs
208. Who among the following stakeholders typically has voting rights
in the company's decision-making processes? a) Customers b) Employees
c) Suppliers d) Shareholders Answer: d) Shareholders
209. Local communities are stakeholders who can be impacted by a
company's: a) Profit margin b) Marketing strategies c) Environmental
practices d) CEO's salary Answer: c) Environmental practices
210. Which stakeholder group is most concerned about the company's
financial performance and returns on investment? a) Employees b)
Customers c) Suppliers d) Shareholders Answer: d) Shareholders
211. Government agencies are stakeholders who can influence a
company's operations through: a) Protesting b) Social media campaigns
c) Issuing regulations and policies d) Marketing efforts Answer: c) Issuing
regulations and policies
212. The primary objective of a company is to maximize value for its: a)
Shareholders b) Employees c) Competitors d) Local communities Answer:
a) Shareholders
213. Which stakeholder group is concerned about the safety and quality
of the products or services provided by the company? a) Shareholders b)
Customers c) Employees d) Suppliers Answer: b) Customers
214. Suppliers are stakeholders who provide the company with: a)
Funding and capital b) Goods and services c) Legal expertise d)
Advertising support Answer: b) Goods and services
215. Who among the following stakeholders may be interested in the
company's corporate social responsibility initiatives and community
engagement? a) Shareholders b) Customers c) Employees d) Local
communities Answer: d) Local communities
22
216. Employees are stakeholders who are concerned about: a) Dividend

payments b) Quality of products c) Job security and working conditions d)
Stock prices Answer: c) Job security and working conditions
217. Shareholders can express their views and exercise their rights in a
company through: a) Public protests b) Voting at annual general
meetings c) Sending emails to the CEO d) Participating in employee
training sessions Answer: b) Voting at annual general meetings
218. Who among the following stakeholders may be affected by a
company's expansion plans or relocation decisions? a) Shareholders b)
Customers c) Employees d) Local communities Answer: d) Local
communities
219. A stakeholder analysis helps a company to: a) Increase its stock
prices b) Identify and understand the needs and interests of different
stakeholders c) Eliminate competitors d) Reduce its product prices
Answer: b) Identify and understand the needs and interests of different
stakeholders
220. Who among the following stakeholders may demand transparency
and accountability from the company's management? a) Shareholders b)
Customers c) Employees d) Government agencies Answer: d)
Government agencies
221. Customers are stakeholders who are interested in: a) The
company's stock prices b) Employee training programs c) High-quality
products and good customer service d) The company's annual revenue
Answer: c) High-quality products and good customer service
222. Which stakeholder group may be concerned about the company's
impact on the environment and natural resources? a) Shareholders b)
Customers c) Employees d) Activists and NGOs Answer: d) Activists and
NGOs
223. A stakeholder management approach helps a company to: a)
Increase its marketing budget b) Improve employee satisfaction c)
Balance the interests of different stakeholders d) Lower its product prices
Answer: c) Balance the interests of different stakeholders
224. The interests of stakeholders may sometimes: a) Conflict with each
other b) Align perfectly with each other c) Be irrelevant to the company's
operations d) Only be relevant during financial crises Answer: a) Conflict
with each other
23
225. Who among the following stakeholders may be concerned about

the company's ethical business practices and corporate governance? a)
Shareholders b) Customers c) Employees d) Activists and NGOs Answer:
a) Shareholders
226. Shareholders are interested in the company's financial
performance because it affects their: a) Job security b) Salary increments
c) Return on investment d) Social media presence Answer: c) Return on
investment
227. Employees may be stakeholders who contribute to the company's
success through their: a) Social media campaigns b) Marketing efforts c)
Skills and labor d) Investment in shares Answer: c) Skills and labor
228. A stakeholder-oriented approach in decision-making aims to: a)
Maximize profits for the company's management b) Balance the
interests of all stakeholders c) Eliminate competition from the market d)
Increase the number of shareholders Answer: b) Balance the interests of
all stakeholders
the company's financial stability and ability to meet its obligations? a)
Shareholders b) Customers c) Employees d) Suppliers Answer: d)
Suppliers
230. A company's reputation is important to its stakeholders because it
can influence: a) Employee salaries b) Stock prices c) Government
regulations d) Consumer trust and loyalty Answer: d) Consumer trust and
loyalty
commitment to diversity and inclusion in its workforce? a) Shareholders
b) Customers c) Employees d) Activists and NGOs Answer: c) Employees
232. Shareholders' interests are often aligned with the company's: a)
Competitors b) Employees c) Profitability and growth d) Social media
followers Answer: c) Profitability and growth
the company's compliance with labor laws and regulations? a)
Shareholders b) Customers c) Employees d) Government agencies
Answer: d) Government agencies
234. Employees' job satisfaction and motivation are important to the
company's stakeholders because they can impact: a) Stock prices b)
24
Employee salaries c) Product prices d) Product quality and customer

service Answer: d) Product quality and customer service
235. A stakeholder engagement process involves: a) Ignoring the
interests of stakeholders b) Regularly communicating with stakeholders
and involving them in decision-making c) Only considering the interests
of shareholders d) Increasing prices for customers Answer: b) Regularly
communicating with stakeholders and involving them in decision-making
the company's contribution to the local economy and job creation? a)
Shareholders b) Customers c) Employees d) Local communities Answer:
d) Local communities
237. The "triple bottom line" approach to business considers the
company's performance in terms of: a) Profits, employee satisfaction,
and customer loyalty b) Profits, customer satisfaction, and supplier
relationships c) Profits, environmental impact, and social responsibility d)
Profits, marketing strategies, and sales revenue Answer: c) Profits,
environmental impact, and social responsibility
238. Who among the following stakeholders may be interested in the
company's efforts to create a diverse and inclusive work environment? a)
c) Employees
impact on the global environment and climate change? a) Shareholders
b) Customers c) Employees d) Activists and NGOs Answer: d) Activists and
NGOs
240. The stakeholder theory suggests that a company should consider
the interests of all stakeholders and not just its: a) Employees b)
Customers c) Shareholders d) Suppliers Answer: c) Shareholders
the company's product safety and quality control measures? a)
Shareholders b) Customers c) Employees d) Government agencies
Answer: b) Customers
contribution to charitable causes and community development? a)
Shareholders b) Customers c) Employees d) Local communities Answer:
d) Local communities
25
243. Shareholders may express their dissatisfaction with the company's

performance through: a) Social media campaigns b) Voting at annual
general meetings c) Issuing government regulations d) Protesting outside
company premises Answer: b) Voting at annual general meetings
the company's adherence to ethical sourcing and supply chain practices?
a) Shareholders b) Customers c) Employees d) Suppliers Answer: d)
Suppliers
245. The stakeholder approach to corporate governance emphasizes
that the company should be accountable to its: a) Board of Directors b)
Customers c) Employees d) Various stakeholders Answer: d) Various
stakeholders
the company's innovation and research and development efforts? a)
b) Customers
247. A company's positive relationship with its stakeholders can
enhance its: a) Social media presence b) Employee turnover rate c) Brand
reputation and credibility d) Supplier prices Answer: c) Brand reputation
and credibility
contributions to environmental conservation and sustainability? a)
d) Activists and NGOs
249. The interests of stakeholders may vary based on: a) The company's
location b) The company's industry c) The company's profit margins d)
The company's social media followers Answer: b) The company's industry
250. A stakeholder-oriented approach in business decision-making can
lead to: a) Conflicts among stakeholders b) Ignoring the company's
financial performance c) Sustainable and long-term success d) Increased
competition from other companies Answer: c) Sustainable and long-term
success
CHAPTER 6 share capital

251. Share capital represents: a) The total amount of money the
company owes to its shareholders b) The total number of shares issued
by the company c) The total amount of money invested by the company's
26
shareholders d) The total value of the company's assets Answer: c) The

total amount of money invested by the company's shareholders
252. Share capital is classified into two types: authorized share capital
and: a) Paid-up share capital b) Issued share capital c) Nominal share
capital d) Subscribed share capital Answer: b) Issued share capital
253. The maximum amount of share capital that a company is
authorized to issue is known as: a) Authorized share capital b) Paid-up
share capital c) Issued share capital d) Subscribed share capital Answer:
a) Authorized share capital
254. The portion of the authorized share capital that has been issued to
the shareholders is called: a) Authorized share capital b) Paid-up share
capital c) Nominal share capital d) Subscribed share capital Answer: b)
Paid-up share capital
255. A company can issue shares up to the limit of its: a) Authorized
share capital b) Paid-up share capital c) Nominal share capital d)
Subscribed share capital Answer: a) Authorized share capital
256. The nominal value of a share is also known as its: a) Market value
b) Face value c) Issue price d) Dividend value Answer: b) Face value
257. The total value of shares that have been issued and allocated to
the shareholders is known as: a) Authorized share capital b) Paid-up
share capital c) Nominal share capital d) Subscribed share capital
Answer: d) Subscribed share capital
258. When a company issues shares, it must receive the money from
the shareholders. This process is called: a) Dividend payment b)
Capitalization c) Issuance of shares d) Share capital reduction Answer: c)
Issuance of shares
259. Which type of share capital represents the actual amount of
money received from the shareholders for the issued shares? a)
Authorized share capital b) Paid-up share capital c) Nominal share
capital d) Subscribed share capital Answer: b) Paid-up share capital
260. The value of a company's assets minus its liabilities is known as: a)
capital d) Shareholders' equity Answer: d) Shareholders' equity
261. The process of converting a portion of the company's profits into
share capital is called: a) Capitalization b) Dividend payment c) Share
buyback d) Shareholders' resolution Answer: a) Capitalization
27
262. A company's share capital can be increased through: a) Share

buyback b) Capital reduction c) Rights issue d) Dividend distribution
Answer: c) Rights issue
263. Which type of share capital is represented by the total number of
shares issued by the company? a) Authorized share capital b) Paid-up
share capital c) Nominal share capital d) Issued share capital Answer: d)
Issued share capital
264. A company's share capital can be decreased through: a) Share
buyback b) Capitalization c) Rights issue d) Capital reduction Answer: d)
Capital reduction
265. Which type of share capital is the nominal value of the shares
multiplied by the total number of issued shares? a) Authorized share
capital b) Paid-up share capital c) Nominal share capital d) Subscribed
share capital Answer: c) Nominal share capital
266. The process by which a company buys back its own shares from
the shareholders is known as: a) Capitalization b) Dividend payment c)
Share buyback d) Shareholders' resolution Answer: c) Share buyback
267. A company can issue bonus shares to its existing shareholders
without receiving any additional payment. This is also known as: a)
Capitalization b) Dividend payment c) Share buyback d) Capital reduction
Answer: a) Capitalization
268. When a company issues new shares to its existing shareholders in
proportion to their current shareholding, it is called a: a) Rights issue b)
Bonus issue c) Dividend distribution d) Capitalization Answer: a) Rights
issue
269. Which type of share capital represents the total value of shares
that shareholders are willing to buy at a particular price? a) Authorized
share capital b) Paid-up share capital c) Nominal share capital d) Offered
share capital Answer: d) Offered share capital
270. The process of returning a portion of the company's share capital
to the shareholders is known as: a) Capitalization b) Dividend payment c)
Share buyback d) Capital reduction Answer: d) Capital reduction
271. Which type of share capital is the actual amount of money raised
from the shareholders for the issued shares? a) Authorized share capital
b) Paid-up share capital c) Nominal share capital d) Offered share capital
Answer: b) Paid-up share capital
28
272. The process of converting a portion of a company's profits into

share capital is known as: a) Rights issue b) Capitalization c) Bonus issue
d) Shareholders' resolution Answer: b) Capitalization
274. Which type of share capital is the amount for which the shares are
offered to the public during an initial public offering (IPO)? a) Authorized
275. The process of converting the company's retained earnings into
share capital is called: a) Rights issue b) Capitalization c) Bonus issue d)
Shareholders' resolution Answer: b) Capitalization
276. A company's share capital can be increased by issuing new shares
to the: a) Suppliers b) Employees c) Existing shareholders d) Competitors
Answer: c) Existing shareholders
278. The process of converting the company's profits into share capital
is called: a) Rights issue b) Capitalization c) Bonus issue d) Shareholders'
resolution Answer: b) Capitalization
279. The process of distributing a portion of the company's profits to its
shareholders is known as: a) Rights issue b) Capitalization c) Bonus issue
d) Dividend payment Answer: d) Dividend payment
capital d) Offered share capital Answer: b) Paid-up share capital
buyback b) Capitalization c) Rights issue d) Capital reduction Answer: c)
Rights issue
282. Which type of share capital is represented by the total number of
shares issued by the company? a) Authorized share capital b) Paid-up
share capital c) Nominal share capital d) Issued share capital Answer: d)
Issued share capital
29
283. A company's share capital can be decreased through: a) Share

buyback b) Capitalization c) Rights issue d) Capital reduction Answer: d)
Capital reduction
284. Which type of share capital is the nominal value of the shares
multiplied by the total number of issued shares? a) Authorized share
capital b) Paid-up share capital c) Nominal share capital d) Subscribed
share capital Answer: c) Nominal share capital
285. The process by which a company buys back its own shares from
the shareholders is known as: a) Capitalization b) Dividend payment c)
Share buyback d) Shareholders' resolution Answer: c) Share buyback
286. A company can issue bonus shares to its existing shareholders
without receiving any additional payment. This is also known as: a)
Capitalization b) Dividend payment c) Share buyback d) Capital reduction
Answer: a) Capitalization
287. When a company issues new shares to its existing shareholders in
proportion to their current shareholding, it is called a: a) Rights issue b)
Bonus issue c) Dividend distribution d) Capitalization Answer: a) Rights
issue
288. Which type of share capital represents the total value of shares
that shareholders are willing to buy at a particular price? a) Authorized
289. The process of returning a portion of the company's share capital
to the shareholders is known as: a) Capitalization b) Dividend payment c)
Share buyback d) Capital reduction Answer: d) Capital reduction
290. Which type of share capital is the actual amount of money raised
from the shareholders for the issued shares? a) Authorized share capital
b) Paid-up share capital c) Nominal share capital d) Offered share capital
Answer: b) Paid-up share capital
291. The process of converting a portion of a company's profits into
share capital is known as: a) Rights issue b) Capitalization c) Bonus issue
d) Shareholders' resolution Answer: b) Capitalization
293. Which type of share capital is the amount for which the shares are
offered to the public during an initial public offering (IPO)? a) Authorized
30

294. The process of converting the company's retained earnings into
share capital is called: a) Rights issue b) Capitalization c) Bonus issue d)
Shareholders' resolution Answer: b) Capitalization
295. A company's share capital can be increased by issuing new shares
to the: a) Suppliers b) Employees c) Existing shareholders d) Competitors
Answer: c) Existing shareholders
297. The process of converting the company's profits into share capital
is called: a) Rights issue b) Capitalization c) Bonus issue d) Shareholders'
resolution Answer: b) Capitalization
298. The process of distributing a portion of the company's profits to its
shareholders is known as: a) Rights issue b) Capitalization c) Bonus issue
d) Dividend payment Answer: d) Dividend payment
capital d) Offered share capital Answer: b) Paid-up share capital
buyback b) Capitalization c) Rights issue d) Capital reduction Answer: c)
Rights issue
CHAPTER 7 company management

301. Who is responsible for the overall management and decision-
making in a company? a) Shareholders b) Board of Directors c)
Employees d) Customers Answer: b) Board of Directors
302. The highest-ranking executive in a company responsible for
implementing strategies and managing day-to-day operations is: a) Chief
Financial Officer (CFO) b) Chief Executive Officer (CEO) c) Chief Operating
Officer (COO) d) Chief Marketing Officer (CMO) Answer: b) Chief
Executive Officer (CEO)
303. The process of setting specific, measurable, achievable, relevant,
and time-bound goals for the company is known as: a) Planning b)
Organizing c) Directing d) Controlling Answer: a) Planning
31
304. Company management is responsible for creating and maintaining

a harmonious working environment, which falls under the function of: a)
Planning b) Organizing c) Leading d) Controlling Answer: c) Leading
305. Which management function involves assembling and
coordinating resources to achieve the company's objectives? a) Planning
b) Organizing c) Leading d) Controlling Answer: b) Organizing
306. The process of measuring actual performance against established
standards and taking corrective actions when necessary is called: a)
Planning b) Organizing c) Leading d) Controlling Answer: d) Controlling
307. In the context of company management, "SWOT" analysis refers to
assessing the company's: a) Sales performance b) Employee turnover
rate c) Strengths, weaknesses, opportunities, and threats d) Marketing
strategies Answer: c) Strengths, weaknesses, opportunities, and threats
308. The management style that involves making decisions without
consulting employees is known as: a) Autocratic b) Democratic c) Laissez-
faire d) Bureaucratic Answer: a) Autocratic
309. The management style that encourages employee participation in
decision-making is known as: a) Autocratic b) Democratic c) Laissez-faire
d) Bureaucratic Answer: b) Democratic
310. The management style that allows employees to have a high
degree of freedom in decision-making is known as: a) Autocratic b)
Democratic c) Laissez-faire d) Bureaucratic Answer: c) Laissez-faire
311. The management style that follows strict rules and procedures is
known as: a) Autocratic b) Democratic c) Laissez-faire d) Bureaucratic
Answer: d) Bureaucratic
312. The process of dividing tasks and assigning them to specific
individuals or teams is part of which management function? a) Planning
313. Which management function involves motivating, guiding, and
influencing employees to achieve the company's goals? a) Planning b)
Organizing c) Leading d) Controlling Answer: c) Leading
314. The performance evaluation and feedback process for employees
typically falls under the function of: a) Planning b) Organizing c) Leading
d) Controlling Answer: d) Controlling
315. The process of analyzing the external business environment and
assessing potential opportunities and challenges is part of which
32
management function? a) Planning b) Organizing c) Leading d)

Controlling Answer: a) Planning
316. Which management function involves establishing criteria for
evaluating performance and taking corrective actions when necessary?
a) Planning b) Organizing c) Leading d) Controlling Answer: d) Controlling
317. The management function of __________ involves designing the
company's structure, hierarchies, and reporting relationships. a) Planning
318. The "4 functions of management" include planning, organizing,
leading, and: a) Delegating b) Reporting c) Controlling d) Marketing
Answer: c) Controlling
319. Which management function involves establishing goals and
determining the actions required to achieve those goals? a) Planning b)
Organizing c) Leading d) Controlling Answer: a) Planning
320. The management function of __________ involves guiding and
motivating employees towards achieving the company's objectives. a)
321. The management function of __________ involves ensuring that
actual performance aligns with planned performance. a) Planning b)
Organizing c) Leading d) Controlling Answer: d) Controlling
322. The management process of __________ involves coordinating
and arranging resources to achieve the company's objectives. a) Planning
323. The management function of __________ involves influencing and
motivating employees to work towards the company's goals. a) Planning
b) Organizing c) Leading d) Controlling Answer: c) Leading
324. The management function of __________ involves analyzing the
external and internal environment to set goals and determine actions. a)
Planning b) Organizing c) Leading d) Controlling Answer: a) Planning
325. The management function of __________ involves evaluating
performance against established standards and making corrections
when needed. a) Planning b) Organizing c) Leading d) Controlling
Answer: d) Controlling
326. In the context of company management, what does "SMART"
stand for in relation to goal-setting? a) Specific, measurable, achievable,
relevant, timely b) Strategic, measurable, aggressive, relevant, timely c)
Specific, meaningful, aggressive, relevant, timely d) Strategic,
33
measurable, actionable, relevant, timely Answer: a) Specific, measurable,

achievable, relevant, timely
327. Which management function involves establishing the
organizational structure and delegating authority and responsibility? a)
Planning b) Organizing c) Leading d) Controlling Answer: b) Organizing
328. The management function of __________ involves setting
performance standards and monitoring progress towards achieving
them. a) Planning b) Organizing c) Leading d) Controlling Answer: d)
Controlling
329. The process of creating a detailed course of action for achieving
the company's objectives is known as: a) Strategic planning b) Tactical
planning c) Operational planning d) Contingency planning Answer: b)
Tactical planning
330. Which type of planning focuses on the long-term goals and overall
direction of the company? a) Strategic planning b) Tactical planning c)
Operational planning d) Contingency planning Answer: a) Strategic
planning
331. Which type of planning focuses on the day-to-day operations and
specific actions to achieve short-term goals? a) Strategic planning b)
Tactical planning c) Operational planning d) Contingency planning
Answer: c) Operational planning
332. The process of identifying and preparing for potential risks and
unexpected events is known as: a) Strategic planning b) Tactical planning
c) Operational planning d) Contingency planning Answer: d) Contingency
planning
333. The management function of __________ involves providing
guidance and direction to employees to achieve organizational goals. a)
334. The process of guiding and motivating employees to perform their
tasks effectively is known as: a) Leadership b) Delegation c) Supervision
d) Coordination Answer: a) Leadership
335. The ability to influence and inspire others to achieve common
goals is a key characteristic of effective: a) Leadership b) Management c)
Coordination d) Controlling Answer: a) Leadership
336. Which management function involves assigning tasks,
responsibilities, and authority to employees? a) Planning b) Organizing c)
Leading d) Controlling Answer: b) Organizing
34
337. The process of monitoring employee performance, providing

feedback, and taking corrective actions is part of which management
function? a) Planning b) Organizing c) Leading d) Controlling Answer: d)
Controlling
338. The process of inspiring and guiding employees to work towards
the achievement of organizational goals is known as: a) Leadership b)
Delegation c) Supervision d) Coordination Answer: a) Leadership
339. The management function of __________ involves establishing
criteria for evaluating performance and taking corrective actions when
necessary. a) Planning b) Organizing c) Leading d) Controlling Answer: d)
Controlling
motivating employees towards achieving the company's objectives. a)
341. The performance evaluation and feedback process for employees
typically falls under the function of: a) Planning b) Organizing c) Leading
d) Controlling Answer: d) Controlling
342. The process of analyzing the external business environment and
assessing potential opportunities and challenges is part of which
management function? a) Planning b) Organizing c) Leading d)
Controlling Answer: a) Planning
343. Which management function involves establishing goals and
determining the actions required to achieve those goals? a) Planning b)
Organizing c) Leading d) Controlling Answer: a) Planning
345. The management function of __________ involves ensuring that
actual performance aligns with planned performance. a) Planning b)
Organizing c) Leading d) Controlling Answer: d) Controlling
346. The management process of __________ involves coordinating
and arranging resources to achieve the company's objectives. a) Planning
347. The management function of __________ involves influencing and
35
348. The management function of __________ involves analyzing the

external and internal environment to set goals and determine actions. a)
Planning b) Organizing c) Leading d) Controlling Answer: a) Planning
349. The management function of __________ involves evaluating
performance against established standards and making corrections
when needed. a) Planning b) Organizing c) Leading d) Controlling
Answer: d) Controlling
350. In the context of company management, what does "SMART"
stand for in relation to goal-setting? a) Specific, measurable, achievable,
relevant, timely b) Strategic, measurable, aggressive, relevant, timely c)
Specific, meaningful, aggressive, relevant, timely d) Strategic,
measurable, actionable, relevant, timely Answer: a) Specific, measurable,
achievable, relevant, timely
CHAPTER 8 company meeting

351. Company meetings are important for: a) Social gatherings b)
Discussing unrelated topics c) Making critical business decisions d)
Employee vacations Answer: c) Making critical business decisions
352. The highest decision-making body in a company is usually known
as the: a) Board of Directors b) CEO c) Shareholders d) Middle
management Answer: c) Shareholders
353. Which type of company meeting is held regularly once a year to
discuss financial reports, elect directors, and appoint auditors? a)
Extraordinary General Meeting (EGM) b) Annual General Meeting (AGM)
c) Board of Directors Meeting d) Emergency Meeting Answer: b) Annual
General Meeting (AGM)
354. A company meeting that is called on short notice to address
urgent matters is known as an: a) Extraordinary General Meeting (EGM)
b) Annual General Meeting (AGM) c) Board of Directors Meeting d)
Emergency Meeting Answer: d) Emergency Meeting
355. Shareholders who cannot physically attend a company meeting
can participate and vote through: a) Telephone b) Email c) Proxy d) Video
conference Answer: c) Proxy
356. A company meeting that is convened to discuss and vote on
specific matters requiring shareholder approval is an: a) Extraordinary
General Meeting (EGM) b) Annual General Meeting (AGM) c) Board of
36
Directors Meeting d) Emergency Meeting Answer: a) Extraordinary

General Meeting (EGM)
357. The minimum number of shareholders required to be present to
conduct a valid company meeting is called: a) Quorum b) Agenda c)
Proxy d) Resolution Answer: a) Quorum
358. The document that contains the list of topics to be discussed and
acted upon during a company meeting is called the: a) Quorum b)
Agenda c) Proxy d) Resolution Answer: b) Agenda
359. The outcome of a decision taken during a company meeting is
known as a: a) Quorum b) Agenda c) Proxy d) Resolution Answer: d)
Resolution
360. The person who presides over a company meeting and ensures
that the meeting is conducted according to the rules is the: a) CEO b)
Chairman c) Company Secretary d) Chief Financial Officer (CFO) Answer:
b) Chairman
361. The company meeting that deals with administrative and
operational matters is usually held at the: a) Extraordinary General
Meeting (EGM) b) Annual General Meeting (AGM) c) Board of Directors
Meeting d) Emergency Meeting Answer: c) Board of Directors Meeting
362. The notice of a company meeting is usually sent to the
shareholders and other participants at least: a) 24 hours before the
meeting b) 1 week before the meeting c) 1 month before the meeting d)
2 months before the meeting Answer: c) 1 month before the meeting
363. The company meeting that is held at irregular intervals to address
urgent and specific matters is an: a) Extraordinary General Meeting
(EGM) b) Annual General Meeting (AGM) c) Board of Directors Meeting
d) Emergency Meeting Answer: a) Extraordinary General Meeting (EGM)
364. The minutes of a company meeting contain a summary of: a)
Resolutions adopted during the meeting b) Shareholders' personal
information c) Proxy votes received d) CEO's report Answer: a)
Resolutions adopted during the meeting
365. In a company meeting, a proposal for consideration is known as a:
a) Quorum b) Agenda c) Proxy d) Motion Answer: d) Motion
366. During a company meeting, shareholders can express their
opinions, ask questions, and participate in discussions during the: a)
Voting session b) Adjournment c) Question and answer session d) Coffee
break Answer: c) Question and answer session
37
367. The process of formally recording the decisions, discussions, and

proceedings of a company meeting is called: a) Quorum b) Agenda c)
Proxy d) Minute-taking Answer: d) Minute-taking
368. The document that confirms a shareholder's ownership of shares
and their eligibility to participate in a company meeting is called a: a)
Quorum b) Agenda c) Proxy d) Share certificate Answer: d) Share
certificate
369. The number of votes required for a resolution to be passed during
a company meeting depends on the: a) CEO's decision b) Chairman's
preference c) Majority or special majority requirement d) Quorum
present Answer: c) Majority or special majority requirement
370. The company meeting that is held to discuss and approve
significant changes in the company's constitution is called an: a)
c) Board of Directors Meeting d) Emergency Meeting Answer: a)
Extraordinary General Meeting (EGM)
371. The company meeting that reviews and approves the company's
financial statements is the: a) Extraordinary General Meeting (EGM) b)
Annual General Meeting (AGM) c) Board of Directors Meeting d)
Emergency Meeting Answer: b) Annual General Meeting (AGM)
372. A company meeting may be adjourned if: a) The shareholders run
out of questions b) The Chairman is absent c) The quorum is not met d)
The CEO needs a break Answer: c) The quorum is not met
373. During a company meeting, shareholders can authorize someone
else to vote on their behalf through a: a) Quorum b) Agenda c) Proxy d)
Resolution Answer: c) Proxy
374. The Chairman of a company meeting may cast a deciding vote
when there is a: a) Unanimous decision among shareholders b) Tie in the
voting c) Lack of quorum d) Proxy dispute Answer: b) Tie in the voting
375. The process of formally ending a company meeting is known as: a)
Quorum b) Adjournment c) Proxy d) Resolution Answer: b) Adjournment
376. The company meeting that is called to discuss and vote on specific
matters requiring shareholder approval is an: a) Extraordinary General
Meeting d) Emergency Meeting Answer: a) Extraordinary General
Meeting (EGM)
38
377. The minimum number of shareholders required to be present to

conduct a valid company meeting is called: a) Quorum b) Agenda c)
Proxy d) Resolution Answer: a) Quorum
378. The document that contains the list of topics to be discussed and
acted upon during a company meeting is called the: a) Quorum b)
Agenda c) Proxy d) Resolution Answer: b) Agenda
379. The outcome of a decision taken during a company meeting is
known as a: a) Quorum b) Agenda c) Proxy d) Resolution Answer: d)
Resolution
380. The person who presides over a company meeting and ensures
that the meeting is conducted according to the rules is the: a) CEO b)
Chairman c) Company Secretary d) Chief Financial Officer (CFO) Answer:
b) Chairman
381. The company meeting that deals with administrative and
operational matters is usually held at the: a) Extraordinary General
Meeting d) Emergency Meeting Answer: c) Board of Directors Meeting
382. The notice of a company meeting is usually sent to the
shareholders and other participants at least: a) 24 hours before the
meeting b) 1 week before the meeting c) 1 month before the meeting d)
2 months before the meeting Answer: c) 1 month before the meeting
383. The company meeting that is held at irregular intervals to address
urgent and specific matters is an: a) Extraordinary General Meeting
(EGM) b) Annual General Meeting (AGM) c) Board of Directors Meeting
d) Emergency Meeting Answer: a) Extraordinary General Meeting (EGM)
384. The minutes of a company meeting contain a summary of: a)
Resolutions adopted during the meeting b) Shareholders' personal
information c) Proxy votes received d) CEO's report Answer: a)
Resolutions adopted during the meeting
385. In a company meeting, a proposal for consideration is known as a:
a) Quorum b) Agenda c) Proxy d) Motion Answer: d) Motion
386. During a company meeting, shareholders can express their
opinions, ask questions, and participate in discussions during the: a)
Voting session b) Adjournment c) Question and answer session d) Coffee
break Answer: c) Question and answer session
39
387. The process of formally recording the decisions, discussions, and

proceedings of a company meeting is called: a) Quorum b) Agenda c)
Proxy d) Minute-taking Answer: d) Minute-taking
388. The document that confirms a shareholder's ownership of shares
and their eligibility to participate in a company meeting is called a: a)
Quorum b) Agenda c) Proxy d) Share certificate Answer: d) Share
certificate
389. The number of votes required for a resolution to be passed during
a company meeting depends on the: a) CEO's decision b) Chairman's
preference c) Majority or special majority requirement d) Quorum
present Answer: c) Majority or special majority requirement
390. The company meeting that is held to discuss and approve
significant changes in the company's constitution is called an: a)
c) Board of Directors Meeting d) Emergency Meeting Answer: a)
Extraordinary General Meeting (EGM)
391. The
392.
393. 50 solved important mcq for exam topic company winding up
394. ChatGPT
395. Certainly! Here are 50 solved multiple-choice questions (MCQs)
specifically focused on the topic of company winding up:
396. Company winding up refers to the process of: a) Starting a new
company b) Dissolving a company and selling its assets c) Merging two
companies d) Appointing a new CEO Answer: b) Dissolving a company
and selling its assets
397. Which of the following is NOT a reason for winding up a company?
a) Loss of business opportunities b) Fulfillment of the company's
objectives c) Insolvency d) Court order Answer: b) Fulfillment of the
company's objectives
398. Voluntary winding up can be initiated by: a) Creditors b)
Shareholders c) Competitors d) Government authorities Answer: b)
Shareholders
399. Compulsory winding up is ordered by the court due to: a)
Profitable operations b) Sufficient working capital c) Insolvency d) A new
business venture Answer: c) Insolvency
40
400. In a voluntary winding up, the liquidator is appointed by the: a)

Shareholders b) Creditors c) Board of Directors d) Government
authorities Answer: a) Shareholders
401. The primary objective of a liquidator during company winding up is
to: a) Maximize the company's profits b) Distribute assets to
shareholders c) Merge the company with another entity d) Avoid tax
payments Answer: b) Distribute assets to shareholders
402. What happens to the company's debts and liabilities during the
winding-up process? a) They are discharged and no longer valid b) They
are transferred to the liquidator c) They remain payable from the
company's assets d) They become the responsibility of the government
Answer: c) They remain payable from the company's assets
403. During company winding up, which stakeholders have the highest
priority in receiving payment from the company's assets? a) Shareholders
b) Creditors c) Liquidator d) Government authorities Answer: b) Creditors
404. In a compulsory winding up, the court-appointed liquidator is
typically a: a) Shareholder of the company b) Creditor of the company c)
Government official d) Member of the board of directors Answer: c)
Government official
405. When a company is being wound up, which of the following is NOT
a method of settling the company's debts? a) Selling company assets b)
Distributing profits to shareholders c) Using company reserves d)
Negotiating with creditors for debt settlement Answer: b) Distributing
profits to shareholders
406. Which type of winding up occurs when the company is unable to
pay its debts as they become due? a) Voluntary winding up b)
Compulsory winding up c) Members' voluntary winding up d) Creditors'
voluntary winding up Answer: d) Creditors' voluntary winding up
407. Members' voluntary winding up is applicable when the company:
a) Has sufficient assets to pay off its debts b) Is facing financial distress c)
Has unresolved legal disputes d) Has excessive reserves Answer: a) Has
sufficient assets to pay off its debts
408. In a members' voluntary winding up, the company's directors must
make a declaration of: a) Insolvency b) Profitability c) Overcapitalization
d) Dividend distribution Answer: a) Insolvency
41
409. The process of realizing the company's assets and converting them
into cash during winding up is called: a) Distribution of assets b)
Liquidation c) Merging d) Reorganization Answer: b) Liquidation
410. In a compulsory winding up, the petition for winding up is usually
filed by: a) The company's auditors
411. Top of Form
CHAPTER 9 company winding up

412. Company winding up refers to the process of: a) Starting a new
company b) Dissolving a company and selling its assets c) Merging two
companies d) Appointing a new CEO Answer: b) Dissolving a company
and selling its assets
413. Which of the following is NOT a reason for winding up a company?
a) Loss of business opportunities b) Fulfillment of the company's
objectives c) Insolvency d) Court order Answer: b) Fulfillment of the
company's objectives
414. Voluntary winding up can be initiated by: a) Creditors b)
Shareholders c) Competitors d) Government authorities Answer: b)
Shareholders
415. Compulsory winding up is ordered by the court due to: a)
Profitable operations b) Sufficient working capital c) Insolvency d) A new
business venture Answer: c) Insolvency
42

Government official
421. When a company is being wound up, which of the following is NOT
a method of settling the company's debts? a) Selling company assets b)
Distributing profits to shareholders c) Using company reserves d)
Negotiating with creditors for debt settlement Answer: b) Distributing
profits to shareholders
422. Which type of winding up occurs when the company is unable to
pay its debts as they become due? a) Voluntary winding up b)
voluntary winding up Answer: d) Creditors' voluntary winding up
424. In a members' voluntary winding up, the company's directors must
make a declaration of: a) Insolvency b) Profitability c) Overcapitalization
d) Dividend distribution Answer: a) Insolvency
425. The process of realizing the company's assets and converting them
into cash during winding up is called: a) Distribution of assets b)
Liquidation c) Merging d) Reorganization Answer: b) Liquidation
filed by: a) The company's auditors b) The company's directors c) The
company's shareholders d) The company's creditors Answer: d) The
company's creditors
427. Which type of winding up requires a special resolution passed by
the company's shareholders? a) Voluntary winding up b) Compulsory
winding up c) Members' voluntary winding up d) Creditors' voluntary
winding up Answer: c) Members' voluntary winding up
428. A company can initiate voluntary winding up if it believes that its
business objectives have been achieved. This process is known as: a)
Members' voluntary winding up b) Compulsory winding up c) Creditors'
voluntary winding up d) Fraudulent winding up Answer: a) Members'
voluntary winding up
43
429. In a creditors' voluntary winding up, the company's directors must

hold a meeting with the: a) Shareholders b) Liquidator c) Creditors d)
Government authorities Answer: c) Creditors
430. Which type of winding up requires a court order based on the
company's inability to pay its debts? a) Voluntary winding up b)
voluntary winding up Answer: b) Compulsory winding up
431. During a company's winding up, the liquidator is responsible for
distributing the remaining assets in the following order of priority: a)
Shareholders, creditors, employees b) Employees, shareholders, creditors
c) Creditors, shareholders, employees d) Creditors, employees,
shareholders Answer: c) Creditors, shareholders, employees
432. In a voluntary winding up, the company ceases to carry on its
business from the date of: a) Declaration of solvency b) Board resolution
c) Liquidator's appointment d) Court order Answer: a) Declaration of
solvency
433. In a compulsory winding up, the court may appoint an official
receiver or an __________ as the liquidator. a) Insolvency practitioner b)
Existing company director c) Auditor d) Attorney Answer: a) Insolvency
practitioner
434. When a company is in the process of winding up, all legal
proceedings against the company are: a) Terminated b) Accelerated c)
Transferred to the liquidator d) Frozen Answer: a) Terminated
435. The voluntary winding up of a solvent company is commonly
referred to as: a) Creditors' voluntary winding up b) Members' voluntary
winding up c) Compulsory winding up d) Fraudulent winding up Answer:
b) Members' voluntary winding up
436. During voluntary winding up, the company's affairs are wound up
by the: a) Shareholders b) Creditors c) Government authorities d)
Liquidator Answer: d) Liquidator
437. The process of distributing the company's assets to its creditors
during winding up is called: a) Liquidation b) Declaration of solvency c)
Compulsory winding up d) Members' voluntary winding up Answer: a)
Liquidation
438. In a compulsory winding up, the winding-up order is issued by the
court based on the presentation of a: a) Petition by the shareholders b)
44
Declaration of solvency by the directors c) Petition by the creditors d)

Resolution by the liquidator Answer: c) Petition by the creditors
439. Which of the following is a consequence of company winding up?
a) Continuation of normal business operations b) Distribution of assets
among creditors and shareholders c) Appointment of new directors d)
Increase in share capital Answer: b) Distribution of assets among
creditors and shareholders
440. During winding up, any undistributed assets of the company are
usually transferred to the: a) Government authorities b) CEO c)
Liquidator d) Trade unions Answer: a) Government authorities
441. The company's operations cease during winding up, and the
company is said to be in: a) Receivership b) Administration c) Insolvency
d) Liquidation Answer: d) Liquidation
442. The process of converting the company's assets into cash during
winding up is called: a) Liquidation b) Declaration of solvency c)
Compulsory winding up d) Members' voluntary winding up Answer: a)
Liquidation
443. In a voluntary winding up, the liquidator must prepare a final
account and submit it to the: a) Employees b) Government authorities c)
Creditors d) Shareholders Answer: d) Shareholders
444. Which type of winding up is initiated by the company itself when it
can no longer continue its business operations? a) Voluntary winding up
b) Compulsory winding up c) Members' voluntary winding up d)
Creditors' voluntary winding up Answer: a) Voluntary winding up
filed by: a) The company's auditors b) The company's directors c) The
company's shareholders d) The company's creditors Answer: d) The
company's creditors
446. The company winding-up process is primarily aimed at: a)
Liquidating the company's assets b) Merging with another company c)
Reorganizing the company's management d) Settling the company's
debts and distributing remaining assets Answer: d) Settling the
company's debts and distributing remaining assets
447. Which of the following statements is true about voluntary winding
up? a) It is always initiated by the company's shareholders b) It can only
occur if the company is insolvent c) It requires a court order d) It involves
45
the appointment of an official receiver as the liquidator Answer: a) It is

always initiated by the company's shareholders
448. Which of the following is a consequence of company winding up?
a) Continuation of normal business operations b) Distribution of assets
among creditors and shareholders c) Appointment of new directors d)
Increase in share capital Answer: b) Distribution of assets among
creditors and shareholders
449. In a voluntary winding up, the company's directors must make a
declaration of: a) Insolvency b) Profitability c) Overcapitalization d)
Dividend distribution Answer: a) Insolvency
450. The winding-up process of a company is usually supervised by a: a)
CEO b) Liquidator c) Competitor d) Government official Answer: b)
Liquidator
Government official
455. Which type of winding up requires a court order based on the
company's inability to pay its debts? a) Voluntary winding up b)
voluntary winding up Answer: b) Compulsory winding up
46
457. In a creditors' voluntary winding up, the company's directors must

hold a meeting with the: a) Shareholders b) Liquidator c) Creditors d)
Government authorities Answer: c) Creditors
458. When a company is being wound up, all legal proceedings against
the company are: a) Terminated b) Accelerated c) Transferred to the
liquidator d) Frozen Answer: a) Terminated
460. In a voluntary winding up, the company ceases to carry on its
business from the date of: a) Declaration of solvency b) Board resolution
c) Liquidator's appointment d) Court order Answer: a) Declaration of
solvency
461. In a voluntary winding up, the company must hold a general
meeting of shareholders, and a resolution for winding up must be passed
by a: a) Simple majority vote b) Unanimous vote c) Two-thirds majority
vote d) Majority vote of creditors Answer: a) Simple majority vote
CHAPTER 10 cooperative society

462. A cooperative society is formed to: a) Maximize profits for
shareholders b) Provide goods and services to the public c) Benefit a
single individual d) Promote competition among businesses Answer: b)
Provide goods and services to the public
463. The members of a cooperative society are primarily: a)
Shareholders b) Consumers c) Employees d) Creditors Answer: b)
Consumers
464. Cooperative societies are based on the principles of: a)
Competition and profit maximization b) Cooperation and mutual help c)
Monopoly and price control d) Individualism and self-interest Answer: b)
Cooperation and mutual help
465. The governing body of a cooperative society is known as the: a)
Board of Directors b) CEO c) Shareholders d) Government authorities
Answer: a) Board of Directors
466. Cooperative societies are typically organized as: a) Public
companies b) Private companies c) Non-profit organizations d)
Government agencies Answer: c) Non-profit organizations
47
467. The primary objective of a cooperative society is to: a) Maximize

profits for shareholders b) Provide employment opportunities c) Promote
economic inequality d) Serve the common needs of its members Answer:
d) Serve the common needs of its members
468. Cooperative societies are based on the values of: a) Individualism
and self-interest b) Competition and price control c) Democracy and
equality d) Monopoly and market dominance Answer: c) Democracy and
equality
469. In a cooperative society, the profits are usually distributed among
the members based on their: a) Investment in the society b) Shareholding
percentage c) Purchases from the society d) Age and experience Answer:
c) Purchases from the society
470. The process of joining a cooperative society as a member typically
involves: a) Buying shares in the society b) Voting in elections c) Paying
membership fees d) Hiring a lawyer Answer: c) Paying membership fees
471. Cooperative societies are often established to address the needs
of: a) Private businesses b) Government agencies c) Small and
marginalized communities d) Corporate shareholders Answer: c) Small
and marginalized communities
472. The liability of the members of a cooperative society is usually: a)
Limited to the amount of their investment b) Unlimited, making them
personally liable c) Covered by insurance d) Determined by the
government Answer: a) Limited to the amount of their investment
473. Cooperative societies follow the principle of "one member, one
________." a) Share b) Vote c) Employee d) Bank account Answer: b)
Vote
474. The surplus generated by a cooperative society is usually used for:
a) Paying high salaries to employees b) Making investments in the stock
market c) Meeting the common needs of the members d) Distributing
dividends to shareholders Answer: c) Meeting the common needs of the
members
475. Cooperative societies are registered under the: a) Ministry of
Finance b) Ministry of Trade and Commerce c) Registrar of Cooperative
Societies d) Local government authorities Answer: c) Registrar of
Cooperative Societies
476. The process of cooperative society registration involves the
submission of: a) Project proposals b) Audited financial statements c)
48
Memorandum and articles of association d) Shareholder agreements

Answer: c) Memorandum and articles of association
477. In a cooperative society, decisions are made based on the principle
of: a) Majority rule b) Autocratic leadership c) Government regulations d)
Profit maximization Answer: a) Majority rule
478. The main objective of a producer cooperative society is to: a)
Provide consumer goods to the public b) Maximize profits for
shareholders c) Provide goods and services to its members d) Facilitate
foreign trade Answer: c) Provide goods and services to its members
479. A cooperative society that focuses on marketing the products of its
members is known as a: a) Producer cooperative society b) Consumer
cooperative society c) Marketing cooperative society d) Credit
cooperative society Answer: c) Marketing cooperative society
480. Which type of cooperative society aims to provide financial
assistance and credit facilities to its members? a) Producer cooperative
society b) Consumer cooperative society c) Marketing cooperative society
d) Credit cooperative society Answer: d) Credit cooperative society
481. A cooperative society that purchases goods in bulk for its members
at discounted prices is a: a) Producer cooperative society b) Consumer
cooperative society Answer: b) Consumer cooperative society
482. The surplus generated by a cooperative society is usually
distributed among the members based on their: a) Age and experience b)
Shareholding percentage c) Purchases from the society d) Investment in
the society Answer: c) Purchases from the society
483. Cooperative societies are based on the values of: a) Individualism
and self-interest b) Cooperation and mutual help c) Monopoly and price
control d) Competition and profit maximization Answer: b) Cooperation
and mutual help
49

the members based on their: a) Investment in the society b) Shareholding
percentage c) Purchases from the society d) Age and experience Answer:
c) Purchases from the society
Vote
members
50

the members based on their: a) Age and experience b) Shareholding
percentage c) Purchases from the society d) Investment in the society
Answer: c) Purchases from the society
51

Vote
members
CHAPTER 11 business combination

512. A business combination is: a) The merger of two companies to
form a new entity b) The acquisition of one company by another c) The
dissolution of a company d) The formation of a joint venture Answer: b)
The acquisition of one company by another
513. Which financial reporting standard governs the accounting for
business combinations? a) International Financial Reporting Standards
(IFRS) b) Generally Accepted Accounting Principles (GAAP) c)
International Accounting Standards (IAS) d) Securities and Exchange
Commission (SEC) rules Answer: a) International Financial Reporting
Standards (IFRS)
52
514. In a business combination, the acquiring company is also known as

the: a) Subsidiary b) Acquiree c) Parent company d) Target company
Answer: c) Parent company
515. The fair value of identifiable assets acquired, liabilities assumed,
and equity instruments issued in a business combination is referred to as:
a) Business value b) Purchase consideration c) Transaction price d)
Goodwill Answer: b) Purchase consideration
516. Goodwill is calculated as the difference between the purchase
consideration and the: a) Book value of identifiable net assets acquired
b) Fair value of identifiable net assets acquired c) Historical cost of
identifiable net assets acquired d) Market value of identifiable net assets
acquired Answer: b) Fair value of identifiable net assets acquired
517. Which of the following is NOT a method used to account for a
business combination? a) Acquisition method b) Pooling of interests
method c) Consolidation method d) Equity method Answer: b) Pooling of
interests method
518. Under the acquisition method, how are transaction costs related
to a business combination accounted for? a) Capitalized as an intangible
asset b) Expensed as incurred c) Recorded as part of the purchase
consideration d) Deducted from the fair value of net assets acquired
Answer: b) Expensed as incurred
519. Which of the following is a characteristic of a business
combination under IFRS? a) The fair value of acquired assets exceeds the
fair value of liabilities assumed. b) The acquiring company's equity
structure remains unchanged. c) The acquired company continues to
exist as a separate legal entity. d) The acquired company's financial
statements are not consolidated with those of the acquirer. Answer: a)
The fair value of acquired assets exceeds the fair value of liabilities
assumed.
520. How is contingent consideration treated in a business combination
under the acquisition method? a) It is recorded as an asset or liability at
fair value. b) It is immediately expensed. c) It is not recognized in the
financial statements. d) It is recorded as part of the purchase
consideration. Answer: a) It is recorded as an asset or liability at fair
value.
521. Which financial statement is prepared when accounting for a
business combination? a) Statement of comprehensive income b)
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Statement of financial position c) Statement of changes in equity d)

Statement of cash flows Answer: b) Statement of financial position
522. In a business combination, the acquirer includes the identifiable
assets, liabilities, and contingent liabilities at their: a) Historical cost b)
Fair value c) Amortized cost d) Net realizable value Answer: b) Fair value
523. The period from the acquisition date to the end of the reporting
period is referred to as the: a) Adjustment period b) Transition period c)
Measurement period d) Recognition period Answer: c) Measurement
period
524. Which of the following is NOT considered a business combination
under IFRS? a) Acquisition of a controlling interest in another entity b)
Merger of two entities of similar size c) Acquisition of assets that do not
constitute a business d) Acquisition of a subsidiary from a parent
company Answer: c) Acquisition of assets that do not constitute a
business
525. When accounting for a business combination, how are transaction
costs, such as legal fees and due diligence costs, treated? a) Capitalized
as an intangible asset b) Expensed as incurred c) Amortized over a fixed
period d) Deducted from the purchase consideration Answer: b)
Expensed as incurred
526. The date on which the acquirer obtains control of the acquiree is
known as the: a) Acquisition date b) Effective date c) Settlement date d)
Valuation date Answer: a) Acquisition date
527. Under the acquisition method, the acquirer measures non-
controlling interests in the acquiree at their: a) Historical cost b) Fair
value c) Amortized cost d) Book value Answer: b) Fair value
528. What happens to the carrying amounts of the acquiree's assets
and liabilities when accounting for a business combination? a) They are
revalued to their fair values b) They are written off c) They are carried
forward at their historical cost d) They are eliminated from the acquiree's
books Answer: a) They are revalued to their fair values
529. Which of the following factors indicates that one entity has control
over another in a business combination? a) Ability to influence the
financial policies of the acquiree b) Ability to exercise significant
influence over the acquiree c) Ownership of a majority of the voting
rights of the acquiree d) Ownership of 20% or more of the voting rights of
54
the acquiree Answer: c) Ownership of a majority of the voting rights of

the acquiree
530. What is the primary criterion for determining the fair value of
assets and liabilities acquired in a business combination? a) The book
value of the acquiree's net assets b) The historical cost of the acquiree's
assets and liabilities c) The fair value at the acquisition date d) The
carrying amount of the acquiree's net assets Answer: c) The fair value at
the acquisition date
531. When recording a business combination, how are intangible assets
with indefinite useful lives accounted for? a) Amortized over their
estimated useful lives b) Impaired to fair value c) Recognized at their fair
value d) Not separately recognized Answer: d) Not separately recognized
532. How are contingent liabilities treated when accounting for a
business combination? a) Recorded as liabilities at fair value b) Recorded
as liabilities at historical cost c) Not recognized in the financial
statements d) Recorded as liabilities at net realizable value Answer: a)
Recorded as liabilities at fair value
533. When accounting for a business combination, any excess of the
purchase consideration over the fair value of net assets acquired is
recognized as: a) Goodwill b) A gain on acquisition c) A loss on
acquisition d) Retained earnings Answer: a) Goodwill
534. How is the fair value of contingent consideration determined when
recording a business combination? a) Based on historical cost b) Based
on management's estimate c) Based on the acquiree's book value d)
Based on the probability of future cash flows Answer: d) Based on the
probability of future cash flows
535. When a business combination involves the issuance of equity
instruments, how are the fair value of the equity instruments and the fair
value of the acquiree's identifiable net assets related? a) The fair value of
equity instruments issued equals the fair value of the net assets acquired.
b) The fair value of equity instruments issued is greater than the fair
value of the net assets acquired. c) The fair value of equity instruments
issued is less than the fair value of the net assets acquired. d) There is no
relation between the fair value of equity instruments issued and the fair
value of the net assets acquired. Answer: a) The fair value of equity
instruments issued equals the fair value of the net assets acquired.
55
536. In a business combination, the difference between the fair value of

net assets acquired and the purchase consideration is referred to as: a)
Amortization expense b) Depreciation expense c) Impairment loss d)
Bargain purchase gain Answer: d) Bargain purchase gain
537. Which of the following statements is true regarding the treatment
of contingent assets in a business combination? a) They are recognized
at historical cost. b) They are recognized at fair value. c) They are
recognized only if their fair value can be reliably determined. d) They are
not recognized in the financial statements. Answer: d) They are not
recognized in the financial statements.
538. What is the period within which the acquirer must finalize the
initial accounting for a business combination? a) 6 months b) 1 year c) 2
years d) 3 years Answer: b) 1 year
539. In a business combination, how are transaction costs accounted
for under the acquisition method? a) Capitalized as an intangible asset b)
Expensed as incurred c) Recognized as a reduction of the purchase
consideration d) Amortized over a fixed period Answer: b) Expensed as
incurred
540. How is a contingent liability recognized when accounting for a
business combination? a) As a liability at historical cost b) As a liability at
fair value c) As a gain on acquisition d) Not recognized in the financial
statements Answer: b) As a liability at fair value
541. Which of the following statements is true regarding the
recognition of intangible assets acquired in a business combination? a)
Intangible assets with indefinite useful lives are amortized over their
estimated useful lives. b) Intangible assets with indefinite useful lives are
not recognized separately. c) Intangible assets with finite useful lives are
not recognized separately. d) Intangible assets with finite useful lives are
recorded at historical cost. Answer: b) Intangible assets with indefinite
useful lives are not recognized separately.
542. When accounting for a business combination, how are contingent
liabilities measured initially? a) At historical cost b) At net realizable
value c) At fair value d) At book value Answer: c) At fair value
543. In a business combination, how is goodwill initially recognized? a)
As an intangible asset b) As a gain on acquisition c) As a deferred tax
asset d) As the excess of the purchase consideration over the fair value of
56
net assets acquired Answer: d) As the excess of the purchase

consideration over the fair value of net assets acquired
544. Which of the following is NOT a requirement for a business
combination to be recognized under IFRS? a) The acquiree must be a
separate legal entity. b) The acquirer must obtain control of the acquiree.
c) The consideration paid must be in cash. d) The acquirer must identify
the assets, liabilities, and equity interests acquired. Answer: c) The
consideration paid must be in cash.
545. In a business combination, how is the fair value of contingent
consideration determined when it is not based on future cash flows? a)
Based on management's estimate b) Based on historical cost c) Based on
the acquiree's book value d) Based on the probability of future events
occurring Answer: a) Based on management's estimate
546. How are deferred tax assets and liabilities related to a business
combination recorded? a) They are recognized at fair value. b) They are
recognized at historical cost. c) They are expensed as incurred. d) They
are not recognized in the financial statements. Answer: a) They are
recognized at fair value.
547. In a business combination, how are contingent assets treated
when they meet the criteria for recognition? a) They are recognized as
assets at fair value. b) They are recognized as liabilities at fair value. c)
They are not recognized in the financial statements. d) They are recorded
as gains on acquisition. Answer: a) They are recognized as assets at fair
value.
548. When accounting for a business combination, what is the primary
criterion for determining whether the acquiree is a business or a group of
assets? a) The presence of intangible assets b) The presence of goodwill
c) The presence of liabilities d) The presence of inputs and processes to
produce outputs Answer: d) The presence of inputs and processes to
produce outputs
549. Which of the following is true regarding the recognition of assets
acquired in a business combination? a) All assets acquired must be
recognized separately. b) All assets acquired must be recognized at
historical cost. c) Only intangible assets with finite useful lives are
recognized separately. d) Only intangible assets with indefinite useful
lives are recognized separately. Answer: a) All assets acquired must be
recognized separately.
57
550. In a business combination, which of the following is an example of

an intangible asset with a finite useful life? a) Trademarks with indefinite
legal protection b) Customer lists with a limited useful life c) Goodwill
arising from the business combination d) Patents with indefinite legal
protection Answer: b) Customer lists with a limited useful life
551. When accounting for a business combination, how are transaction
costs related to the issuance of debt treated? a) Capitalized as an
intangible asset b) Expensed as incurred c) Recorded as part of the
purchase consideration d) Recorded as part of the purchase price
allocation Answer: d) Recorded as part of the purchase price allocation
552. In a business combination, how is the carrying amount of the
acquiree's financial instruments adjusted to fair value? a) Only if the fair
value differs significantly from the carrying amount b) Only if the
financial instruments are derivatives c) Always to the historical cost of
the financial instruments d) To the lower of cost and net realizable value
Answer: a) Only if the fair value differs significantly from the carrying
amount
553. Which financial statement is primarily affected by the recognition
of a business combination? a) Income statement b) Statement of
financial position c) Statement of changes in equity d) Statement of cash
flows Answer: b) Statement of financial position
554. In a business combination, how is the fair value of the acquiree's
inventory determined? a) Based on management's estimate b) Based on
historical cost c) Based on the replacement cost d) Based on the lower of
cost and net realizable value Answer: c) Based on the replacement cost
555. What happens to the carrying amount of the acquiree's assets and
liabilities when accounting for a business combination? a) They are
revalued to their fair values b) They are written off c) They are carried
forward at their historical cost d) They are eliminated from the acquiree's
books Answer: a) They are revalued to their fair values
556. In a business combination, how is the fair value of non-controlling
interests measured? a) At historical cost b) At net realizable value c) At
fair value d) At book value Answer: c) At fair value
557. Which of the following is NOT a step in the acquisition method of
accounting for a business combination? a) Identifying the acquirer b)
Recognizing the acquiree's identifiable assets and liabilities c) Measuring
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the non-controlling interests at fair value d) Recognizing the acquiree's

goodwill Answer: c) Measuring the non-controlling interests at fair value
558. When accounting for a business combination, how are non-
controlling interests in the acquiree measured? a) At historical cost b) At
fair value c) At amortized cost d) At book value Answer: b) At fair value
559. In a business combination, how are pre-existing relationships
between the acquiree and the acquirer accounted for? a) Ignored in the
fair value determination b) Recognized as a separate intangible asset c)
Recognized as a liability d) Recognized as goodwill Answer: a) Ignored in
the fair value determination
560. How is a liability related to a business combination measured
initially? a) At historical cost b) At net realizable value c) At fair value d)
At book value Answer: c) At fair value
561. In a business combination, how are the costs of issuing debt
accounted for? a) Capitalized as an intangible asset b) Expensed as
incurred c) Recorded as part of the purchase consideration d) Recorded
as part of the purchase price allocation Answer: d) Recorded as part of
the purchase price allocation
CHAPTER 12 home trade

562. Home trade refers to the: a) Export and import of goods between
countries b) Buying and selling of goods within the same country c)
Trading of goods in the stock market d) Exchange of goods for services
Answer: b) Buying and selling of goods within the same country
563. Which of the following is NOT a characteristic of home trade? a) It
involves transactions within the national borders. b) It is subject to local
laws and regulations. c) It is also known as domestic trade. d) It is limited
to the trading of goods and services. Answer: d) It is limited to the
trading of goods and services.
564. In home trade, the buyer and seller are generally: a) From the
same country b) From different countries c) From the same continent d)
From the same city Answer: a) From the same country
565. The primary objective of home trade is to: a) Promote
international relations b) Maximize profits for foreign investors c)
Facilitate the exchange of goods and services within the country d)
Import goods from other countries Answer: c) Facilitate the exchange of
goods and services within the country
59
566. Which of the following is an example of home trade? a) A French

company exporting cars to Germany b) An American company importing
electronics from China c) A Japanese company selling electronic gadgets
in Japan d) An Indian company buying textiles from the United States
Answer: c) A Japanese company selling electronic gadgets in Japan
567. Home trade is essential for: a) Promoting international trade b)
Enhancing cultural exchange c) Ensuring the availability of goods and
services within the country d) Expanding the country's territorial
boundaries Answer: c) Ensuring the availability of goods and services
within the country
568. The mode of payment in home trade is usually in the form of: a)
Foreign currency b) Barter system c) Gold or silver coins d) Local currency
Answer: d) Local currency
569. Which of the following statements is true about home trade? a) It
is restricted to a single commodity. b) It involves import and export
activities. c) It helps in maintaining economic stability within a country.
d) It is entirely regulated by international trade agreements. Answer: c) It
helps in maintaining economic stability within a country.
570. Home trade is crucial for a country's: a) Balance of payments b)
Cultural integration c) Defense system d) Tourist attractions Answer: a)
Balance of payments
571. Which sector plays a vital role in home trade? a) Foreign
embassies b) Tourism industry c) Private companies d) Government
organizations Answer: c) Private companies
572. In home trade, which entity facilitates the exchange of goods and
services between buyers and sellers? a) Government authorities b)
International organizations c) Intermediaries or middlemen d) Non-
governmental organizations (NGOs) Answer: c) Intermediaries or
middlemen
573. Home trade encourages the growth of: a) Foreign investments b)
Domestic industries c) International competition d) Foreign exchange
reserves Answer: b) Domestic industries
574. Which of the following is an advantage of home trade over
international trade? a) Greater variety of products available b) Lower
transportation costs c) Access to cheaper labor d) Opportunities for
cultural exchange Answer: b) Lower transportation costs
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575. The process of home trade typically involves: a) Currency exchange

and visa processing b) Customs duties and tariffs c) International
shipping and logistics d) Export and import licenses Answer: b) Customs
duties and tariffs
576. Home trade helps in reducing: a) Inflation rates b) Unemployment
rates c) National debt d) Foreign investments Answer: b) Unemployment
rates
577. Which of the following is an example of wholesale home trade? a)
A customer buying a shirt from a retail store b) A supermarket selling
fruits and vegetables to individual customers c) An automobile
manufacturer selling cars to a car dealership d) A farmer selling
vegetables at a local market Answer: c) An automobile manufacturer
selling cars to a car dealership
578. The transfer of goods from the manufacturer to the retailer is part
of the: a) Retail home trade b) Wholesale home trade c) International
trade d) Barter trade Answer: b) Wholesale home trade
579. Which sector is primarily involved in retail home trade? a)
Industrial sector b) Agricultural sector c) Service sector d) Consumer
sector Answer: d) Consumer sector
580. Retailers in home trade sell products: a) To other retailers b) To the
end consumers c) To wholesalers d) Only to government agencies
Answer: b) To the end consumers
581. Home trade promotes: a) Centralization of power b) Cross-cultural
conflicts c) Economic development within the country d) Dependence on
foreign goods Answer: c) Economic development within the country
582. Which of the following is an example of e-commerce in home
trade? a) A local farmer's market selling fresh produce to customers b) A
wholesale distributor supplying goods to retail stores c) An online retailer
selling products to consumers through a website d) A government
agency importing goods from foreign countries Answer: c) An online
retailer selling products to consumers through a website
583. Home trade allows consumers to: a) Import foreign goods at
cheaper prices b) Access products and services conveniently c) Access
products only during festive seasons d) Support foreign industries
Answer: b) Access products and services conveniently
584. In home trade, the legal framework is provided by: a) International
treaties and agreements b) The World Trade Organization (WTO) c) Local
61
laws and regulations d) Non-governmental organizations (NGOs)

Answer: c) Local laws and regulations
585. Home trade contributes to a country's: a) Import restrictions b)
Balance of trade deficit c) Gross domestic product (GDP) d) Reliance on
foreign aid Answer: c) Gross domestic product (GDP)
586. The involvement of intermediaries in home trade helps in: a)
Increasing the cost of goods for consumers b) Facilitating smooth
transactions between buyers and sellers c) Creating a monopoly in the
market d) Excluding local manufacturers from the market Answer: b)
Facilitating smooth transactions between buyers and sellers
587. Which of the following is an example of a trade barrier in home
trade? a) Export promotion policies b) Elimination of import duties c)
Government subsidies for domestic industries d) Quotas limiting the
import of certain goods Answer: d) Quotas limiting the import of certain
goods
588. Home trade helps in reducing: a) The variety of products available
in the market b) Competition among local industries c) Dependence on
foreign goods d) Consumer choices and preferences Answer: c)
Dependence on foreign goods
589. In home trade, the final price of a product includes: a) Taxes and
tariffs only b) Wholesale and retail markups c) Customs duties and
transportation costs d) Production costs only Answer: b) Wholesale and
retail markups
590. The growth of home trade is influenced by factors such as: a)
Currency exchange rates and global trade policies b) International
conflicts and military alliances c) Climate change and environmental
issues d) Changes in the world population Answer: a) Currency exchange
rates and global trade policies
591. Which of the following is an example of a cash and carry
wholesaler in home trade? a) A retailer selling products on credit to
customers b) A wholesaler allowing customers to pay after 30 days c) A
wholesaler selling products to retailers on a cash basis d) A retailer
accepting payment through credit cards Answer: c) A wholesaler selling
products to retailers on a cash basis
592. The expansion of home trade is linked to a country's: a)
Dependence on foreign markets b) Fiscal deficit c) Economic prosperity d)
Cultural isolation Answer: c) Economic prosperity
62
593. Home trade is primarily driven by the demands and preferences of:
a) International consumers b) Government agencies c) Local consumers
d) Foreign investors Answer: c) Local consumers
594. Which of the following is an example of direct home trade? a) A
wholesaler selling goods to a retailer b) A retailer selling goods to an end
consumer c) An importer buying goods from a foreign supplier d) A
manufacturer selling goods to a distributor Answer: b) A retailer selling
goods to an end consumer
595. The promotion of small-scale industries is one of the objectives of:
a) International trade b) Home trade c) Export trade d) Wholesale trade
Answer: b) Home trade
596. In home trade, the supply of goods is influenced by factors such as:
a) Import restrictions and foreign demand b) Currency exchange rates
and global economic conditions c) Government subsidies and tax policies
d) Political alliances and military conflicts Answer: c) Government
subsidies and tax policies
597. Which sector is primarily involved in wholesale home trade? a)
Agricultural sector b) Manufacturing sector c) Service sector d) Consumer
sector Answer: b) Manufacturing sector
598. The retail home trade sector includes businesses such as: a)
Wholesale distributors and exporters b) Shopping malls and retail stores
c) Government agencies and embassies d) Online marketplaces and e-
commerce platforms Answer: b) Shopping malls and retail stores
599. Which of the following is an example of a distribution channel in
home trade? a) A manufacturer selling products directly to consumers b)
A retailer importing products from another country c) A wholesaler
supplying products to multiple retailers d) A customer purchasing goods
from a local market Answer: c) A wholesaler supplying products to
multiple retailers
600. Which factor contributes to the growth of e-commerce in home
trade? a) Increased import restrictions b) Favorable international trade
agreements c) Consumer preference for online shopping d) Decreased
demand for local products Answer: c) Consumer preference for online
shopping
601. Home trade allows a country to become: a) Self-sufficient in
production b) Reliant on foreign imports c) Dependent on foreign aid d)
63
Less competitive in the global market Answer: a) Self-sufficient in

production
602. Which of the following is an example of a service provided in home
trade? a) Importing and exporting of goods b) Transportation of goods
within the country c) Cultural exchange with foreign countries d) Tourism
and hospitality services Answer: b) Transportation of goods within the
country
603. Home trade contributes to a country's: a) Balance of trade surplus
b) Economic growth and development c) Foreign exchange reserves d)
Political conflicts with neighboring countries Answer: b) Economic
growth and development
604. The availability of a variety of products in the market is a result of:
a) International trade agreements b) Export and import policies c) Home
trade activities d) Foreign investments Answer: c) Home trade activities
605. Which of the following is an example of a trade association in
home trade? a) A group of retailers forming a buying consortium b) A
government agency regulating imports and exports c) An international
organization promoting fair trade practices d) A foreign company
investing in a local business Answer: a) A group of retailers forming a
buying consortium
606. Home trade ensures the efficient distribution of goods and services
within a country, which helps in: a) Minimizing unemployment rates b)
Maximizing the trade deficit c) Maintaining price stability d) Reducing
government intervention in the economy Answer: c) Maintaining price
stability
607. Which of the following is an example of a cash and carry retailer in
home trade? a) A supermarket allowing customers to pay using credit
cards b) A department store offering discounts and promotions c) A
wholesale store selling goods to retailers on a cash basis d) An online
marketplace offering cash-on-delivery payment option Answer: c) A
wholesale store selling goods to retailers on a cash basis
608. Which entity plays a significant role in promoting fair trade
practices in home trade? a) International trade unions b) Government
agencies c) Non-governmental organizations (NGOs) d) Intermediaries or
middlemen Answer: c) Non-governmental organizations (NGOs)
609. Home trade contributes to a country's: a) Dependency on foreign
aid b) Self-reliance and economic independence c) Export-oriented
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economic policies d) Involvement in global conflicts Answer: b) Self-

reliance and economic independence
610. Which of the following is an example of a trading bloc that
encourages home trade among member countries? a) World Trade
Organization (WTO) b) European Union (EU) c) International Monetary
Fund (IMF) d) United Nations (UN) Answer: b) European Union (EU)
611. Home trade is essential for maintaining a country's: a) Political
stability b) Export-oriented economy c) Balance of trade deficit d)
Economic prosperity and well-being of citizens Answer: d) Economic
prosperity and well-being of citizens
CHAPTER 13 wholesale and retail trade

612. Wholesale trade involves the: a) Selling of goods to end consumers
b) Selling of goods to other retailers c) Buying of goods from
manufacturers and selling them to retailers d) Import and export of
goods between countries Answer: c) Buying of goods from
manufacturers and selling them to retailers
613. The primary customers of wholesale traders are usually: a)
Individual consumers b) Retailers and other businesses c) Government
agencies d) Non-profit organizations Answer: b) Retailers and other
businesses
614. Which of the following is an example of a wholesaler? a)
Supermarket selling products to individual consumers b) Manufacturer
selling goods to retailers c) Department store offering products to end
consumers d) Importer purchasing goods from foreign countries Answer:
b) Manufacturer selling goods to retailers
615. The main advantage of wholesale trade is that it: a) Increases the
price of goods for consumers b) Reduces the number of intermediaries in
the distribution chain c) Eliminates the need for retailers d) Facilitates the
efficient distribution of goods to retailers Answer: d) Facilitates the
efficient distribution of goods to retailers
616. In wholesale trade, the goods are usually sold in: a) Small
quantities to individual consumers b) Large quantities to retailers and
businesses c) Large quantities to individual consumers d) Small quantities
to retailers and businesses Answer: b) Large quantities to retailers and
businesses
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617. Which of the following is NOT a function of wholesale trade? a)

Warehousing and storing goods b) Marketing and advertising to end
consumers c) Negotiating prices with manufacturers d) Transporting
goods to retailers Answer: b) Marketing and advertising to end
consumers
618. Wholesalers act as intermediaries between: a) Manufacturers and
retailers b) Retailers and end consumers c) Importers and exporters d)
Governments and businesses Answer: a) Manufacturers and retailers
619. The pricing strategy of wholesalers is generally focused on: a)
Maximizing profits for end consumers b) Setting high prices for retailers
c) Offering discounts to manufacturers d) Providing competitive prices to
retailers Answer: d) Providing competitive prices to retailers
620. Which of the following is a type of wholesale trade? a) Direct-to-
consumer (D2C) sales b) Business-to-business (B2B) sales c) Business-to-
government (B2G) sales d) Consumer-to-consumer (C2C) sales Answer: b)
Business-to-business (B2B) sales
621. Wholesalers play a crucial role in the supply chain by: a) Selling
directly to end consumers b) Bypassing retailers and selling to
manufacturers c) Providing bulk quantities of goods to retailers d)
Importing goods from foreign countries Answer: c) Providing bulk
quantities of goods to retailers
622. Which of the following statements is true about wholesale trade?
a) It involves selling goods to end consumers in small quantities. b) It
eliminates the need for retailers in the distribution process. c) It helps in
promoting competition among manufacturers. d) It is limited to selling
products to non-profit organizations. Answer: c) It helps in promoting
competition among manufacturers.
623. Wholesalers add value to the distribution process by: a) Increasing
the final price of goods for consumers b) Providing after-sales service to
end consumers c) Offering credit facilities to retailers d) Reducing the
number of intermediaries in the supply chain Answer: d) Reducing the
number of intermediaries in the supply chain
624. Which of the following is an example of a cash-and-carry
wholesaler? a) A wholesaler offering credit facilities to retailers b) A
wholesaler supplying goods on consignment basis c) A wholesaler selling
goods to retailers on a cash basis d) A wholesaler importing goods from
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foreign countries Answer: c) A wholesaler selling goods to retailers on a

cash basis
625. Wholesalers are involved in which of the following activities? a)
Selling goods directly to end consumers b) Importing and exporting of
goods between countries c) Setting up retail stores and outlets d) Bulk
buying from manufacturers and selling to retailers Answer: d) Bulk
buying from manufacturers and selling to retailers
626. Wholesalers act as a link between manufacturers and retailers,
helping to: a) Increase the cost of goods for consumers b) Reduce the
efficiency of the distribution process c) Facilitate the flow of goods to
retailers d) Bypass the retail sector entirely Answer: c) Facilitate the flow
of goods to retailers
627. The primary location of a wholesale trade business is typically: a)
Shopping malls and retail complexes b) Industrial areas and
manufacturing zones c) Residential neighborhoods and communities d)
Central business districts and commercial hubs Answer: b) Industrial
areas and manufacturing zones
628. Wholesalers typically deal with products in: a) Small quantities and
high prices b) Large quantities and high prices c) Small quantities and low
prices d) Large quantities and low prices Answer: d) Large quantities and
low prices
629. Which of the following is an example of a full-service wholesaler?
a) A wholesaler that only sells products in bulk quantities b) A wholesaler
that provides a wide range of services to retailers c) A wholesaler that
operates online only d) A wholesaler that imports goods from foreign
countries Answer: b) A wholesaler that provides a wide range of services
to retailers
630. The main objective of wholesale trade is to: a) Sell products
directly to end consumers b) Provide credit facilities to manufacturers c)
Facilitate the distribution of goods to retailers d) Bypass retailers and sell
directly to manufacturers Answer: c) Facilitate the distribution of goods
to retailers
631. A wholesaler who deals in a specific category of products, such as
electronics or clothing, is known as a: a) General wholesaler b) Specialty
wholesaler c) Cash-and-carry wholesaler d) Retailer Answer: b) Specialty
wholesaler
632. Retail Trade:
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633. Retail trade involves the: a) Selling of goods to other businesses b)

Selling of goods to end consumers c) Buying of goods from
manufacturers and selling them to retailers d) Import and export of
goods between countries Answer: b) Selling of goods to end consumers
634. Retailers purchase goods from wholesalers and manufacturers,
and they are primarily focused on: a) Selling in large quantities to other
businesses b) Selling in small quantities to end consumers c) Importing
and exporting goods between countries d) Selling directly to
manufacturers Answer: b) Selling in small quantities to end consumers
635. Retailers play a crucial role in the supply chain by: a) Providing
bulk quantities of goods to wholesalers b) Selling directly to
manufacturers c) Bypassing wholesalers and buying from manufacturers
d) Selling goods in small quantities to end consumers Answer: d) Selling
goods in small quantities to end consumers
636. The primary objective of retail trade is to: a) Provide credit
facilities to end consumers b) Facilitate the distribution of goods to
wholesalers c) Sell goods directly to manufacturers d) Sell goods to end
consumers for personal use Answer: d) Sell goods to end consumers for
personal use
637. Which of the following is an example of a retailer? a)
Manufacturer selling products to wholesalers b) Wholesaler selling
products to retailers c) Department store offering products to end
consumers d) Exporter selling goods to foreign countries Answer: c)
Department store offering products to end consumers
638. Retailers add value to the distribution process by: a) Providing
credit facilities to wholesalers b) Selling goods in large quantities to end
consumers c) Displaying and promoting products to attract consumers d)
Importing goods from foreign countries Answer: c) Displaying and
promoting products to attract consumers
639. Which of the following statements is true about retail trade? a) It
involves selling goods to other businesses in large quantities. b) It
eliminates the need for wholesalers in the distribution process. c) It helps
in promoting competition among retailers. d) It is limited to selling
products to non-profit organizations. Answer: c) It helps in promoting
competition among retailers.
640. The pricing strategy of retailers is generally focused on: a)
Maximizing profits for wholesalers b) Setting high prices for end
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consumers c) Offering discounts to manufacturers d) Providing

competitive prices to end consumers Answer: d) Providing competitive
prices to end consumers
641. Retailers typically deal with products in: a) Small quantities and
high prices b) Large quantities and high prices c) Small quantities and low
prices d) Large quantities and low prices Answer: c) Small quantities and
low prices
642. Which of the following is NOT a function of retail trade? a)
Warehousing and storing goods b) Negotiating prices with
manufacturers c) Bulk buying from wholesalers d) Marketing and
advertising to end consumers Answer: c) Bulk buying from wholesalers
643. In retail trade, the location of the business is crucial because it
determines: a) The number of intermediaries in the supply chain b) The
types of products that can be sold c) The proximity to potential
customers d) The cost of goods from manufacturers Answer: c) The
proximity to potential customers
644. Retailers are involved in which of the following activities? a)
Importing and exporting of goods between countries b) Selling goods
directly to wholesalers c) Displaying and promoting products to attract
consumers d) Providing credit facilities to manufacturers Answer: c)
Displaying and promoting products to attract consumers
645. The main advantage of retail trade is that it: a) Increases the cost
of goods for consumers b) Reduces the efficiency of the distribution
process c) Eliminates the need for wholesalers d) Allows easy access for
consumers to products Answer: d) Allows easy access for consumers to
products
646. Which of the following is a type of retail trade? a) Business-to-
business (B2B) sales b) Business-to-government (B2G) sales c) Business-
to-consumer (B2C) sales d) Consumer-to-consumer (C2C) sales Answer: c)
Business-to-consumer (B2C) sales
647. Retailers act as a link between wholesalers and: a) Manufacturers
b) Retail consumers c) Importers and exporters d) Governments and
businesses Answer: b) Retail consumers
648. The primary location of a retail trade business is typically: a)
Shopping malls and retail complexes b) Industrial areas and
manufacturing zones c) Residential neighborhoods and communities d)
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Central business districts and commercial hubs Answer: a) Shopping

malls and retail complexes
649. Retailers typically sell products in: a) Small quantities and high
prices b) Large quantities and high prices c) Small quantities and low
prices d) Large quantities and low prices Answer: c) Small quantities and
low prices
650. Which of the following is an example of a specialty retailer? a) A
retailer that sells a wide range of products b) A retailer that only sells
products in bulk quantities c) A retailer that focuses on selling a specific
category of products d) A retailer that operates online only Answer: c) A
retailer that focuses on selling a specific category of products
651. Retailers play a significant role in understanding consumer needs
and preferences, which helps in: a) Increasing prices for wholesalers b)
Maximizing profits for manufacturers c) Efficiently distributing goods to
wholesalers d) Tailoring products and services to meet consumer
demands Answer: d) Tailoring products and services to meet consumer
demands
652. The retail sector is responsible for: a) Selling directly to end
consumers b) Bypassing wholesalers and selling directly to
manufacturers c) Providing credit facilities to manufacturers d) Importing
goods from foreign countries Answer: a) Selling directly to end
consumers
653. Retailers aim to provide a variety of products and options to
consumers, leading to: a) Increased competition among manufacturers
b) Greater convenience for consumers c) A reduction in the number of
wholesalers d) Higher prices for end consumers Answer: b) Greater
convenience for consumers
654. Which of the following is an example of a full-service retailer? a) A
retailer that only sells products in large quantities b) A retailer that
provides additional services, such as after-sales support c) A retailer that
imports goods from foreign countries d) A retailer that only sells products
online Answer: b) A retailer that provides additional services, such as
after-sales support
655. Retailers are responsible for ensuring: a) The efficient flow of
goods from manufacturers to wholesalers b) The proper storage and
warehousing of goods c) The negotiation of prices with wholesalers d)
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The distribution of goods to end consumers Answer: d) The distribution of

goods to end consumers
656. Which of the following is NOT a type of retail trade? a) Traditional
brick-and-mortar stores b) Online e-commerce platforms c) Wholesale
stores d) Specialty stores Answer: c) Wholesale stores
657. The expansion of e-commerce has had a significant impact on
retail trade by: a) Increasing the cost of goods for consumers b) Reducing
the variety of products available to consumers c) Providing consumers
with more convenient shopping options d) Encouraging retailers to shift
to traditional brick-and-mortar stores Answer: c) Providing consumers
with more convenient shopping options
658. Retail trade contributes to a country's economy by: a) Reducing
the availability of goods for consumers b) Generating employment
opportunities in the retail sector c) Reducing the efficiency of the
distribution process d) Decreasing the purchasing power of consumers
Answer: b) Generating employment opportunities in the retail sector
659. Which factor contributes to the growth of retail trade? a)
Increased import restrictions b) Favorable international trade
agreements c) Consumer preference for online shopping d) Decreased
demand for local products Answer: c) Consumer preference for online
shopping
660. Retailers help in promoting competition among manufacturers by:
a) Charging high prices for goods b) Providing credit facilities to
manufacturers c) Offering a wide range of products from different
manufacturers d) Bypassing manufacturers and buying directly from
wholesalers Answer: c) Offering a wide range of products from different
manufacturers
661. Retailers play a critical role in the marketing and promotion of
products, which helps in: a) Reducing the demand for goods and services
b) Minimizing the variety of products available to consumers c) Creating
awareness and generating demand for products d) Eliminating the need
for manufacturers Answer: c) Creating awareness and generating
demand for products
662. Retail trade is crucial for a country's: a) Fiscal deficit b) Balance of
payments c) Gross domestic product (GDP) d) Reliance on foreign aid
Answer: c) Gross domestic product (GDP)
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CHAPTER 14 foreign trade,import and export

663. Foreign trade refers to the: a) Buying and selling of goods within
the same country b) Import and export of goods between countries c)
Trading of goods in the stock market d) Exchange of goods for services
Answer: b) Import and export of goods between countries
664. The main objective of foreign trade is to: a) Promote international
relations b) Maximize profits for domestic industries c) Facilitate the
exchange of goods and services between countries d) Import goods from
other countries Answer: c) Facilitate the exchange of goods and services
between countries
665. Which of the following is NOT a type of foreign trade? a) Import
trade b) Export trade c) Domestic trade d) Bilateral trade Answer: c)
Domestic trade
666. Import trade refers to the: a) Buying of goods and services from
other countries b) Selling of goods and services to other countries c)
Trading of goods within the same country d) Exchange of goods and
services for other commodities Answer: a) Buying of goods and services
from other countries
667. Export trade refers to the: a) Buying of goods and services from
other countries b) Selling of goods and services to other countries c)
Trading of goods within the same country d) Exchange of goods and
services for other commodities Answer: b) Selling of goods and services
to other countries
668. The balance of trade is the difference between a country's: a)
Imports and exports b) Gross domestic product (GDP) and gross national
product (GNP) c) Total revenue and total expenditure d) Government
revenue and government expenditure Answer: a) Imports and exports
669. A trade surplus occurs when a country's: a) Exports exceed its
imports b) Imports exceed its exports c) Total revenue exceeds its total
expenditure d) Gross domestic product (GDP) exceeds its gross national
product (GNP) Answer: a) Exports exceed its imports
670. A trade deficit occurs when a country's: a) Exports exceed its
imports b) Imports exceed its exports c) Total revenue exceeds its total
expenditure d) Gross domestic product (GDP) exceeds its gross national
product (GNP) Answer: b) Imports exceed its exports
671. Which of the following is an example of an imported good? a) A
car manufactured in the home country and sold abroad b) A mobile
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phone produced in another country and sold domestically c) Raw

materials purchased from foreign suppliers for local manufacturing d)
Agricultural products exported to foreign markets Answer: b) A mobile
phone produced in another country and sold domestically
672. Which of the following is an example of an exported service? a)
Software developed domestically and sold to foreign customers b)
Electronics imported from foreign countries and sold domestically c) Raw
materials purchased from foreign suppliers for local manufacturing d)
Tourism and hospitality services provided to local customers Answer: a)
Software developed domestically and sold to foreign customers
673. Tariffs, quotas, and embargoes are examples of: a) Barriers to
foreign trade b) Incentives for domestic industries c) Policies promoting
bilateral trade d) International trade agreements Answer: a) Barriers to
foreign trade
674. A tariff is a tax imposed on: a) Exports of goods and services b)
Imports of goods and services c) Domestic sales of goods and services d)
Foreign investments in the country Answer: b) Imports of goods and
services
675. Which of the following is a purpose of imposing tariffs? a) To
promote free trade between countries b) To reduce government revenue
c) To protect domestic industries from foreign competition d) To
encourage foreign investment in the country Answer: c) To protect
domestic industries from foreign competition
676. Quotas are limitations set on the: a) Number of foreign tourists
visiting a country b) Amount of foreign currency a country can hold c)
Quantity of goods and services that can be imported or exported d) Total
number of embassies a country can establish Answer: c) Quantity of
goods and services that can be imported or exported
677. An embargo is a complete ban on: a) Imports and exports of
specific goods and services b) Foreign investment in the country c)
Government revenue from taxation d) Tourist arrivals from specific
countries Answer: a) Imports and exports of specific goods and services
678. Which of the following is an example of a non-tariff barrier to
trade? a) Imposing import duties on foreign goods b) Limiting the
quantity of imported goods c) Banning the export of certain goods d)
Requiring safety certifications for imported products Answer: d)
Requiring safety certifications for imported products
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679. The World Trade Organization (WTO) is an international

organization that deals with: a) Global economic and monetary policies
b) Climate change and environmental issues c) Promotion of cultural
exchange among nations d) International trade rules and agreements
Answer: d) International trade rules and agreements
680. The WTO aims to promote: a) Protectionism and trade barriers b)
Free and fair trade among countries c) Bilateral trade agreements
between specific nations d) Isolationism and self-sufficiency Answer: b)
Free and fair trade among countries
681. Which of the following is an advantage of foreign trade for a
country? a) Decreased competition among domestic industries b) Limited
access to foreign markets for local products c) Economic growth and
increased employment opportunities d) Increased reliance on foreign aid
for development Answer: c) Economic growth and increased employment
opportunities
682. Comparative advantage refers to a country's ability to produce a
good: a) At a higher cost than other countries b) At the same cost as
other countries c) Using fewer resources than other countries d) With the
lowest quality among competing countries Answer: c) Using fewer
resources than other countries
683. Which of the following is a factor that influences a country's
comparative advantage in trade? a) High tariffs on imported goods b)
Abundance of natural resources c) Low demand for local products d)
Trade deficits with other countries Answer: b) Abundance of natural
resources
684. Dumping in international trade refers to: a) Exporting goods at
lower prices than the domestic market b) Imposing high tariffs on
imported goods c) Banning the export of certain goods d) Limiting the
quantity of imported goods Answer: a) Exporting goods at lower prices
than the domestic market
685. Dumping is often considered unfair trade practice because it can:
a) Encourage foreign investment in the country b) Stifle competition and
harm domestic industries c) Promote free and fair trade between
countries d) Increase the balance of trade surplus Answer: b) Stifle
competition and harm domestic industries
686. The GATT (General Agreement on Tariffs and Trade) is an
international treaty that aimed to: a) Establish a common currency
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among participating countries b) Promote the export of goods to foreign

markets c) Reduce trade barriers and tariffs among member countries d)
Promote cultural exchange and tourism Answer: c) Reduce trade barriers
and tariffs among member countries
687. The European Union (EU) is an example of a: a) Free trade area b)
Common market c) Customs union d) Regional trade agreement Answer:
b) Common market
688. In a customs union, member countries: a) Eliminate tariffs and
trade barriers among themselves b) Set common tariffs and trade
barriers for non-member countries c) Establish a common currency for
trade transactions d) Promote free trade among specific regions only
Answer: b) Set common tariffs and trade barriers for non-member
countries
689. A free trade area involves: a) The elimination of all trade barriers
among member countries b) The establishment of a common currency
for trade transactions c) The promotion of trade within a specific region
only d) The reduction of tariffs and trade barriers among member
countries Answer: d) The reduction of tariffs and trade barriers among
member countries
690. The North American Free Trade Agreement (NAFTA) was an
agreement among: a) The United States, Canada, and Mexico b)
European Union member countries c) Asian countries in the ASEAN
region d) Latin American countries in the Mercosur bloc Answer: a) The
United States, Canada, and Mexico
691. A trade war is characterized by: a) Cooperation and mutual benefit
among participating countries b) An increase in imports and exports of
goods and services c) The imposition of retaliatory tariffs and trade
barriers d) The establishment of free trade areas among nations Answer:
c) The imposition of retaliatory tariffs and trade barriers
692. Which of the following statements is true about the effects of
trade barriers? a) Trade barriers always result in a trade surplus for a
country b) Trade barriers can protect domestic industries but may harm
consumers c) Trade barriers only affect imports and have no impact on
exports d) Trade barriers lead to complete isolation from the global
economy Answer: b) Trade barriers can protect domestic industries but
may harm consumers
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693. The international payment method where goods are shipped to

the buyer before payment is made is called: a) Cash on delivery (COD) b)
Advance payment c) Letter of credit (LC) d) Open account Answer: d)
Open account
694. A letter of credit (LC) is a financial instrument used to guarantee:
a) Immediate payment for goods upon delivery b) The shipment of goods
before payment is made c) Advance payment for future goods and
services d) Payment for goods after a certain period Answer: b) The
shipment of goods before payment is made
695. Which of the following is an advantage of using a letter of credit in
international trade? a) It eliminates the risk of non-payment for the
exporter b) It requires immediate payment for goods upon delivery c) It
allows importers to receive goods before making any payment d) It
encourages cash transactions between buyers and sellers Answer: a) It
eliminates the risk of non-payment for the exporter
696. The International Chamber of Commerce (ICC) is responsible for: a)
Setting international trade rules and regulations b) Resolving disputes
between trading nations c) Promoting free trade agreements among
countries d) Issuing and governing letters of credit in international trade
Answer: d) Issuing and governing letters of credit in international trade
697. In international trade, the term "FOB" stands for: a) Free on Board
b) Freight on Board c) Foreign Origin Bill d) Fair Order Basis Answer: a)
Free on Board
698. FOB (Free on Board) indicates that the seller: a) Is responsible for
shipping and delivery costs b) Will pay the buyer for the goods upon
delivery c) Has received payment for the goods in advance d) Is
responsible for clearing customs at the destination country Answer: a) Is
responsible for shipping and delivery costs
699. Which of the following trade terms places the maximum
responsibility on the buyer? a) Ex-Works (EXW) b) Cost, Insurance, and
Freight (CIF) c) Free Carrier (FCA) d) Delivered Duty Paid (DDP) Answer: d)
Delivered Duty Paid (DDP)
700. The Incoterms (International Commercial Terms) are standardized
trade terms developed by: a) The United Nations (UN) b) The
International Monetary Fund (IMF) c) The World Trade Organization
(WTO) d) The International Chamber of Commerce (ICC) Answer: d) The
International Chamber of Commerce (ICC)
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701. In international trade, the term "CIF" stands for: a) Cost,

Insurance, and Freight b) Currency Inflation Factor c) Customs Import Fee
d) Carriage and Insurance Free Answer: a) Cost, Insurance, and Freight
702. CIF (Cost, Insurance, and Freight) indicates that the seller: a) Is
responsible for shipping and delivery costs b) Will pay the buyer for the
goods upon delivery c) Has received payment for the goods in advance d)
Will provide insurance for the goods during transit Answer: d) Will
provide insurance for the goods during transit
703. Which of the following trade terms places the maximum
responsibility on the seller? a) Ex-Works (EXW) b) Cost, Insurance, and
Freight (CIF) c) Free Carrier (FCA) d) Delivered Duty Paid (DDP) Answer: a)
Ex-Works (EXW)
704. The Harmonized System (HS) is an international product
classification system used for: a) Calculating import duties and taxes b)
Promoting bilateral trade agreements c) Identifying product quality
standards d) Tracking the movement of goods in international trade
Answer: a) Calculating import duties and taxes
705. In international trade, the term "FOB" specifies the: a) Country of
origin of the goods b) Terms of payment between the buyer and seller c)
Incoterm that governs the transaction d) Point at which the seller's
responsibility ends and the buyer's responsibility begins Answer: d) Point
at which the seller's responsibility ends and the buyer's responsibility
begins
706. An export license is a government-issued document that: a) Allows
the export of specific goods to certain countries b) Regulates the import
of goods from foreign countries c) Limits the quantity of goods a country
can export d) Encourages the establishment of international trade
agreements Answer: a) Allows the export of specific goods to certain
countries
707. The main purpose of an export license is to: a) Promote free trade
between countries b) Facilitate the export of goods without any
restrictions c) Ensure compliance with export control regulations d)
Encourage foreign investment in the country Answer: c) Ensure
compliance with export control regulations
708. In international trade, the term "FTA" stands for: a) Free Trade
Agreement b) Foreign Trade Association c) Foreign Tax Allocation d)
Freight Transport Agreement Answer: a) Free Trade Agreement
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709. A Free Trade Agreement (FTA) is a treaty between countries that

aims to: a) Impose high tariffs on imported goods b) Reduce trade
barriers and promote free trade c) Limit the quantity of exported goods
to specific countries d) Establish a common currency for trade
transactions Answer: b) Reduce trade barriers and promote free trade
710. In a bilateral trade agreement, trade benefits are negotiated
between: a) Two countries only b) A group of neighboring countries c)
Multiple countries around the world d) Developing and developed
countries Answer: a) Two countries only
711. Which of the following is an advantage of free trade agreements
for participating countries? a) Increased reliance on foreign aid for
development b) Limited access to foreign markets for local products c)
Enhanced access to a larger market for domestic goods and services d)
Higher tariffs and trade barriers on imports and exports Answer: c)
Enhanced access to a larger market for domestic goods and services
712. A trade deficit occurs when: a) Exports exceed imports b) Imports
exceed exports c) The balance of trade is equal to zero d) A country's GDP
is higher than its GNP Answer: b) Imports exceed exports
CHAPTER 15 middleman
713. Middlemen in a supply chain refer to: a) Individuals who work in
the middle of the organization hierarchy b) The management team of a
company c) Intermediaries who facilitate the movement of goods and
services between producers and consumers d) The workforce involved in
the production process Answer: c) Intermediaries who facilitate the
movement of goods and services between producers and consumers
714. The primary role of middlemen is to: a) Produce goods and services
b) Set prices for products c) Facilitate the distribution of goods and
services d) Manage the financial aspects of a business Answer: c)
Facilitate the distribution of goods and services
715. Which of the following is an example of a middleman? a)
Manufacturer b) Wholesaler c) Consumer d) Government agency Answer:
b) Wholesaler
716. Middlemen add value to the supply chain by: a) Increasing the cost
of products b) Providing credit facilities to consumers c) Reducing the
efficiency of distribution d) Breaking bulk and offering assortment to
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customers Answer: d) Breaking bulk and offering assortment to

customers
717. A middleman who purchases goods from producers in large
quantities and sells them in smaller quantities to retailers is called a: a)
Retailer b) Distributor c) Wholesaler d) Manufacturer Answer: c)
Wholesaler
718. Retailers are middlemen who: a) Buy goods from wholesalers and
sell them to consumers b) Import goods from foreign countries c)
Produce goods and sell them directly to end-users d) Provide financial
services to businesses Answer: a) Buy goods from wholesalers and sell
them to consumers
719. Which of the following is NOT a function of middlemen? a)
Providing warehousing and storage facilities b) Negotiating prices with
consumers c) Breaking bulk and offering assortment d) Facilitating the
movement of goods from producers to consumers Answer: b)
Negotiating prices with consumers
720. One of the advantages of using middlemen in the distribution
process is: a) Decreased accessibility to products for consumers b)
Increased complexity in the supply chain c) Cost reduction due to
economies of scale d) Higher prices of goods for end-users Answer: c)
Cost reduction due to economies of scale
721. Middlemen help in bridging the gap between: a) Producers and
consumers b) Wholesalers and retailers c) Local and international
markets d) Manufacturers and competitors Answer: a) Producers and
consumers
722. The main advantage of using middlemen in the supply chain is: a)
Increased control over distribution channels b) Reduced competition
among businesses c) Better communication with end-users d) Wider
market reach and accessibility Answer: d) Wider market reach and
accessibility
723. Direct distribution involves: a) Using multiple middlemen in the
supply chain b) Selling products directly to end consumers c) Limiting the
distribution of goods to specific regions d) Exporting goods to foreign
countries only Answer: b) Selling products directly to end consumers
724. Indirect distribution involves: a) Selling products directly to end
consumers b) Limiting the distribution of goods to specific regions c)
Using multiple middlemen in the supply chain d) Importing goods from
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foreign countries Answer: c) Using multiple middlemen in the supply

chain
725. Middlemen help in reducing the distribution cost for producers by:
a) Increasing the prices of goods for consumers b) Providing credit
facilities to end users c) Buying goods in small quantities from producers
d) Buying goods in bulk quantities and breaking bulk Answer: d) Buying
goods in bulk quantities and breaking bulk
726. Which of the following is an example of an agent middleman? a) A
wholesaler who buys goods from manufacturers and sells them to
retailers b) A retailer who sells products directly to consumers c) A broker
who facilitates trade between buyers and sellers d) A manufacturer who
produces goods and sells them directly to end users Answer: c) A broker
who facilitates trade between buyers and sellers
727. Middlemen are particularly beneficial for producers when: a) There
is limited demand for the product b) The product requires customization
for each consumer c) Producers have a strong distribution network d) The
product is perishable and needs immediate delivery Answer: b) The
product requires customization for each consumer
728. The use of middlemen in distribution helps in: a) Eliminating the
need for advertising and marketing b) Reducing the number of
intermediaries in the supply chain c) Facilitating the movement of goods
from producers to consumers d) Increasing the control of producers over
the distribution process Answer: c) Facilitating the movement of goods
from producers to consumers
729. One of the challenges associated with middlemen is: a) Increased
cost of goods for consumers b) Difficulty in obtaining credit facilities from
them c) Limited market reach and accessibility d) Lower profit margins
for producers Answer: c) Limited market reach and accessibility
730. In a distribution channel, middlemen act as: a) Gatekeepers
controlling the flow of goods to consumers b) Competitors to
manufacturers in the market c) Hurdles slowing down the distribution
process d) Bypasses for end consumers to directly reach manufacturers
Answer: a) Gatekeepers controlling the flow of goods to consumers
731. The concept of "time utility" in marketing refers to: a) The
availability of goods and services whenever consumers need them b)
Reducing the time taken to produce goods c) The period during which
middlemen hold inventory d) The time taken to transport goods from
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producers to consumers Answer: a) The availability of goods and services

whenever consumers need them
732. Middlemen are responsible for providing which type of utility in
marketing? a) Form utility b) Time utility c) Place utility d) Possession
utility Answer: c) Place utility
733. Which of the following is an example of place utility provided by
middlemen? a) Offering products in various sizes and colors b) Reducing
the time it takes to produce goods c) Distributing goods to convenient
locations for consumers d) Providing information about products to end
users Answer: c) Distributing goods to convenient locations for
consumers
734. The primary goal of middlemen is to: a) Increase the cost of goods
for consumers b) Minimize the distribution channels used in the supply
chain c) Optimize the efficiency of the supply chain d) Maximize the profit
margins for manufacturers Answer: c) Optimize the efficiency of the
supply chain
735. A merchant middleman differs from an agent middleman in that
the merchant middleman: a) Facilitates trade between buyers and sellers
b) Buys and takes ownership of the goods before reselling them c)
Charges a commission for its services d) Provides financial assistance to
end users Answer: b) Buys and takes ownership of the goods before
reselling them
736. An agent middleman differs from a merchant middleman in that
the agent middleman: a) Facilitates trade between buyers and sellers b)
Buys and takes ownership of the goods before reselling them c) Charges
a commission for its services d) Provides financial assistance to end users
Answer: a) Facilitates trade between buyers and sellers
737. Which of the following is a limitation of using middlemen in
distribution? a) Middlemen increase the availability of goods for
consumers b) Middlemen add value to the supply chain c) Middlemen
may not prioritize the producer's products d) Middlemen always provide
credit facilities to consumers Answer: c) Middlemen may not prioritize
the producer's products
738. The process of breaking bulk by middlemen refers to: a) Packing
goods in large quantities for storage b) Separating goods into small units
for distribution c) Combining multiple products into a single package d)
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Reducing the cost of goods for end users Answer: b) Separating goods
into small units for distribution
739. A middleman who acts as a liaison between producers and
consumers but does not take ownership of the goods is called a: a)
Retailer b) Distributor c) Wholesaler d) Broker Answer: d) Broker
740. An advantage of using a broker as a middleman is: a) Reduced
distribution costs for producers b) Direct ownership of goods for end
users c) Increased control over the supply chain d) Broader market reach
for producers Answer: d) Broader market reach for producers
741. Middlemen help in reducing the risk of stockouts for consumers by:
a) Limiting the availability of goods to specific regions b) Providing
limited product variety c) Maintaining inventory to meet consumer
demand d) Charging higher prices for products Answer: c) Maintaining
inventory to meet consumer demand
742. A middleman who specializes in the movement of goods across
international borders is called a: a) Broker b) Exporter c) Wholesaler d)
Freight forwarder Answer: d) Freight forwarder
743. Which of the following is a disadvantage of using middlemen in
the supply chain? a) Reduced efficiency in distribution b) Limited market
reach for producers c) Higher cost of goods for consumers d) Increased
control over the distribution process for producers Answer: c) Higher cost
of goods for consumers
744. When middlemen hold inventory, they provide which type of utility
to consumers? a) Form utility b) Time utility c) Place utility d) Possession
utility Answer: b) Time utility
745. A middleman who purchases products from multiple
manufacturers and sells them to retailers is called a: a) Retailer b)
Wholesaler c) Distributor d) Manufacturer Answer: b) Wholesaler
746. Which of the following is a limitation of using wholesalers as
middlemen? a) Wholesalers do not facilitate the movement of goods to
retailers b) Wholesalers do not break bulk or offer assortment to retailers
c) Wholesalers may charge high commission fees d) Wholesalers always
sell products directly to end consumers Answer: c) Wholesalers may
charge high commission fees
747. A middleman who assists producers in finding buyers for their
products is called a: a) Wholesaler b) Retailer c) Agent d) Broker Answer:
c) Agent
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748. A manufacturer who sells products directly to end consumers

without involving any middlemen is practicing: a) Indirect distribution b)
Direct distribution c) Middleman marketing d) Wholesaling Answer: b)
Direct distribution
749. Middlemen play a crucial role in matching: a) Producers with
wholesalers b) Producers with consumers c) Wholesalers with retailers d)
Retailers with end users Answer: b) Producers with consumers
750. A middleman who specializes in distributing goods to a specific
region or area is called a: a) Distributor b) Broker c) Retailer d)
Manufacturer Answer: a) Distributor
751. Middlemen are beneficial in providing which type of utility in
marketing? a) Form utility b) Time utility c) Place utility d) Possession
utility Answer: c) Place utility
752. A middleman who operates an online platform that connects
buyers and sellers is called a: a) Broker b) Wholesaler c) E-commerce
retailer d) Freight forwarder Answer: c) E-commerce retailer
753. Middlemen help in reducing the risk of holding excess inventory for
producers by: a) Buying goods in large quantities from producers b)
Selling goods directly to end users c) Charging higher prices for products
d) Limiting the availability of goods to specific regions Answer: a) Buying
goods in large quantities from producers
754. Which of the following is NOT a benefit of using middlemen in
distribution? a) Increased market reach for producers b) Efficient
movement of goods to end consumers c) Reduced distribution costs for
producers d) Limited product variety for consumers Answer: d) Limited
product variety for consumers
755. Middlemen help in reducing the risk of fluctuating demand for
producers by: a) Limiting the distribution of goods to specific regions b)
Charging higher prices for products c) Maintaining inventory to meet
consumer demand d) Providing limited product variety Answer: c)
Maintaining inventory to meet consumer demand
756. A middleman who purchases products from producers and sells
them directly to end consumers is called a: a) Distributor b) Broker c)
Wholesaler d) Retailer Answer: d) Retailer
757. Which of the following is a limitation of using retailers as
middlemen? a) Retailers do not break bulk or offer assortment to end
users b) Retailers do not facilitate the movement of goods to end
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consumers c) Retailers may charge high commission fees d) Retailers

always sell products directly to manufacturers Answer: b) Retailers do
not facilitate the movement of goods to end consumers
758. A middleman who takes ownership of goods and resells them to
end consumers is called a: a) Broker b) Agent c) Distributor d) Wholesaler
Answer: c) Distributor
759. Middlemen help in reducing the risk of non-payment for producers
by: a) Charging higher prices for products b) Providing credit facilities to
end users c) Limiting the availability of goods to specific regions d)
Buying goods in bulk quantities and breaking bulk Answer: b) Providing
credit facilities to end users
760. A middleman who acts as a liaison between buyers and sellers and
receives a commission for their services is called a: a) Broker b)
Distributor c) Wholesaler d) Retailer Answer: a) Broker
761. Middlemen help in reducing the risk of transportation delays for
producers by: a) Limiting the distribution of goods to specific regions b)
Charging higher prices for products c) Maintaining inventory to meet
consumer demand d) Facilitating the movement of goods through
efficient logistics Answer: d) Facilitating the movement of goods through
efficient logistics
762. A middleman who provides financial assistance and credit facilities
to consumers is called a: a) Wholesaler b) Retailer c) Distributor d)
Banker Answer: b) Retailer
CHAPTER 16 channels of distribution

763. Channels of distribution refer to: a) The different marketing
strategies used by companies b) The various paths through which goods
and services move from producers to consumers c) The pricing strategies
used by retailers d) The process of product development and design
Answer: b) The various paths through which goods and services move
from producers to consumers
764. Which of the following is NOT a part of the channel of distribution?
a) Retailers b) Wholesalers c) Producers d) Consumers Answer: c)
Producers
765. The main goal of a channel of distribution is to: a) Increase the
number of products produced by the manufacturer b) Eliminate the need
for intermediaries in the supply chain c) Minimize the time it takes for
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products to reach consumers d) Make products available to consumers in

the right place, at the right time, and in the right quantity Answer: d)
Make products available to consumers in the right place, at the right
time, and in the right quantity
766. A direct channel of distribution involves: a) The use of
intermediaries between producers and consumers b) Selling products
through multiple retail outlets c) Selling products directly to consumers
without intermediaries d) Exporting products to foreign countries only
Answer: c) Selling products directly to consumers without intermediaries
767. An indirect channel of distribution involves: a) The use of
intermediaries between producers and consumers b) Selling products
through a single retail outlet c) Selling products directly to consumers
without intermediaries d) Importing products from foreign countries
Answer: a) The use of intermediaries between producers and consumers
768. Which of the following is an example of a direct channel of
distribution? a) A manufacturer selling its products to a retailer, who
then sells them to consumers b) A manufacturer selling its products
directly to consumers through its website c) A wholesaler purchasing
products from a producer and selling them to retailers d) A retailer
selling products to other retailers Answer: b) A manufacturer selling its
products directly to consumers through its website
769. Which of the following is an example of an indirect channel of
distribution? a) A manufacturer selling its products directly to consumers
through its website b) A manufacturer selling its products to a retailer,
who then sells them to consumers c) A wholesaler purchasing products
from a producer and selling them to retailers d) A retailer selling
products to other retailers Answer: c) A wholesaler purchasing products
from a producer and selling them to retailers
770. The number of intermediaries involved in a channel of distribution
is known as: a) The distribution intensity b) The distribution width c) The
distribution depth d) The distribution scope Answer: a) The distribution
intensity
771. Which of the following distribution intensities involves the use of
the fewest intermediaries? a) Intensive distribution b) Exclusive
distribution c) Selective distribution d) Extensive distribution Answer: b)
Exclusive distribution
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772. Exclusive distribution is often used for products that are: a) Low-
priced and have mass appeal b) High-priced and require special attention
c) Perishable and need to reach consumers quickly d) Easily available in
most retail outlets Answer: b) High-priced and require special attention
multiple intermediaries? a) Intensive distribution b) Exclusive distribution
c) Selective distribution d) Extensive distribution Answer: c) Selective
distribution
774. Intensive distribution is often used for products that are: a) Low-
priced and have mass appeal b) High-priced and require special attention
c) Perishable and need to reach consumers quickly d) Easily available in
most retail outlets Answer: a) Low-priced and have mass appeal
all possible intermediaries? a) Intensive distribution b) Exclusive
distribution c) Selective distribution d) Extensive distribution Answer: a)
Intensive distribution
776. The use of selective distribution allows producers to: a) Maximize
the number of retail outlets carrying their products b) Reach specific
target markets effectively c) Sell products through their own website only
d) Sell products directly to consumers without intermediaries Answer: b)
Reach specific target markets effectively
777. Which of the following is a disadvantage of using intensive
distribution? a) It limits the number of retail outlets carrying the products
b) It may result in overexposure and brand dilution c) It increases the cost
of products for consumers d) It is time-consuming and slows down the
distribution process Answer: b) It may result in overexposure and brand
dilution
778. A channel of distribution that involves multiple intermediaries is
also known as a: a) Direct channel b) Indirect channel c) Complex channel
d) Linear channel Answer: b) Indirect channel
779. In a channel of distribution, intermediaries are also known as: a)
Facilitators b) Distributors c) Retailers d) Agents Answer: d) Agents
780. A channel of distribution that involves one or more intermediaries
is also known as a: a) Direct channel b) Indirect channel c) Complex
channel d) Linear channel Answer: a) Direct channel
781. The type of channel of distribution used by a company depends on
factors such as: a) The location of the company's headquarters b) The
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size of the company's workforce c) The nature of the product and target
market d) The company's financial performance Answer: c) The nature of
the product and target market
782. Which of the following is a benefit of using direct channels of
distribution? a) Increased control over the distribution process b) Lower
distribution costs for producers c) Reduced time taken for products to
reach consumers d) Access to a wider range of distribution outlets
Answer: a) Increased control over the distribution process
783. A channel of distribution in which intermediaries work together to
move products from producers to consumers is known as: a) A horizontal
channel b) A vertical channel c) A diagonal channel d) A circular channel
Answer: b) A vertical channel
784. Which of the following is an example of a vertical channel of
distribution? a) A manufacturer selling products directly to consumers
through its website b) A manufacturer selling products to a retailer, who
then sells them to consumers c) A retailer purchasing products from a
wholesaler and selling them to consumers d) A retailer selling products to
other retailers Answer: c) A retailer purchasing products from a
wholesaler and selling them to consumers
785. A channel of distribution in which multiple companies at the same
level work together to reach consumers is known as: a) A horizontal
channel b) A vertical channel c) A diagonal channel d) A circular channel
Answer: a) A horizontal channel
786. Which of the following is an example of a horizontal channel of
distribution? a) Two manufacturers collaborating to sell their products
together b) A manufacturer selling products directly to consumers
through its website c) A manufacturer selling products to a retailer, who
then sells them to consumers d) A retailer selling products to other
retailers Answer: d) A retailer selling products to other retailers
787. The process of deciding the number and type of intermediaries to
use in a channel of distribution is known as: a) Market segmentation b)
Channel selection c) Product positioning d) Competitive analysis Answer:
b) Channel selection
788. A channel of distribution in which products move through multiple
levels of intermediaries is known as: a) A short channel b) A long channel
c) An integrated channel d) A hybrid channel Answer: b) A long channel
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789. A channel of distribution in which products move through few

levels of intermediaries is known as: a) A short channel b) A long channel
c) An integrated channel d) A hybrid channel Answer: a) A short channel
790. Which of the following is an example of a long channel of
through its website b) A manufacturer selling products to a retailer, who
then sells them to consumers c) A manufacturer selling products to a
wholesaler, who then sells them to a retailer, and finally, the retailer sells
them to consumers d) A retailer selling products to other retailers
Answer: c) A manufacturer selling products to a wholesaler, who then
sells them to a retailer, and finally, the retailer sells them to consumers
791. A channel of distribution in which a company uses multiple
channels to reach consumers is known as: a) A single-channel
distribution b) A multi-channel distribution c) An exclusive distribution d)
An intensive distribution Answer: b) A multi-channel distribution
792. Which of the following is an example of a multi-channel
through its website and also using wholesalers to sell products to
retailers b) A manufacturer selling products to a retailer, who then sells
them to consumers c) A wholesaler purchasing products from a producer
and selling them to retailers d) A retailer selling products to other
retailers Answer: a) A manufacturer selling products directly to
consumers through its website and also using wholesalers to sell
products to retailers
793. Which of the following is an advantage of using a multi-channel
distribution strategy? a) It allows the company to reach a wider audience
b) It reduces the cost of products for consumers c) It limits the
competition in the market d) It decreases the efficiency of the supply
chain Answer: a) It allows the company to reach a wider audience
794. A channel of distribution in which a company uses both direct and
indirect channels to reach consumers is known as: a) A single-channel
distribution b) A multi-channel distribution c) An exclusive distribution d)
An intensive distribution Answer: d) An intensive distribution
795. Which of the following is an example of an intensive distribution
strategy? a) A manufacturer selling products directly to consumers
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them to consumers c) A wholesaler purchasing products from a producer

and selling them to retailers d) A retailer selling products to other
retailers Answer: a) A manufacturer selling products directly to
products to retailers
796. The selection of a channel of distribution is influenced by factors
such as: a) The number of competitors in the market b) The pricing
strategy of the company c) The availability of resources and capabilities
d) The total revenue generated by the company Answer: c) The
availability of resources and capabilities
797. A channel of distribution in which a company uses both online and
offline channels to reach consumers is known as: a) A virtual channel b) A
physical channel c) A digital channel d) An omnichannel Answer: d) An
omnichannel
798. Which of the following is an example of an omnichannel
distribution strategy? a) A manufacturer selling products directly to
products to retailers b) A manufacturer selling products to a retailer, who
then sells them to consumers c) A retailer allowing customers to buy
products online and pick them up in-store d) A retailer selling products to
other retailers Answer: c) A retailer allowing customers to buy products
online and pick them up in-store
799. An omnichannel distribution strategy focuses on: a) Using only
direct channels to reach consumers b) Using only indirect channels to
reach consumers c) Providing a seamless and integrated shopping
experience across various channels d) Using wholesalers as the only
intermediaries in the supply chain Answer: c) Providing a seamless and
integrated shopping experience across various channels
800. Which of the following is an advantage of using an omnichannel
distribution strategy? a) It limits the competition in the market b) It
reduces the cost of products for consumers c) It provides a consistent
shopping experience for consumers d) It decreases the number of
intermediaries in the supply chain Answer: c) It provides a consistent
shopping experience for consumers
801. A channel of distribution in which a company sells products to
retailers, who then sell them to other retailers, is known as: a) A push
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channel b) A pull channel c) A reverse channel d) A circular channel

Answer: a) A push channel
802. Which of the following is an example of a push channel of
them to consumers c) A retailer purchasing products from a wholesaler
and selling them to other retailers d) A retailer selling products to other
retailers Answer: c) A retailer purchasing products from a wholesaler and
selling them to other retailers
803. In a push channel of distribution, the focus is on: a) Attracting
consumers to purchase products b) Using advertising and promotions to
create demand for products c) Encouraging retailers to stock and sell
products d) Using online channels to reach consumers Answer: c)
Encouraging retailers to stock and sell products
804. A channel of distribution in which the focus is on creating
consumer demand and attracting them to purchase products is known
as: a) A push channel b) A pull channel c) A reverse channel d) A circular
channel Answer: b) A pull channel
805. Which of the following is an example of a pull channel of
them to consumers c) A retailer purchasing products from a wholesaler
and selling them to other retailers d) A retailer running advertising
campaigns to attract consumers to purchase products Answer: d) A
retailer running advertising campaigns to attract consumers to purchase
products
806. In a pull channel of distribution, the focus is on: a) Encouraging
retailers to stock and sell products b) Using online channels to reach
consumers c) Creating consumer demand and attracting them to
purchase products d) Using wholesalers as the only intermediaries in the
supply chain Answer: c) Creating consumer demand and attracting them
to purchase products
807. A channel of distribution in which products flow from consumers
back to producers is known as: a) A push channel b) A pull channel c) A
reverse channel d) A circular channel Answer: c) A reverse channel
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808. Which of the following is an example of a reverse channel of

retailers b) A manufacturer accepting returns and exchanges from
consumers c) A retailer purchasing products from a wholesaler and
selling them to other retailers d) A retailer selling products to other
retailers Answer: b) A manufacturer accepting returns and exchanges
from consumers
809. In a reverse channel of distribution, the focus is on: a) Encouraging
retailers to stock and sell products b) Using online channels to reach
consumers c) Facilitating the return and exchange of products from
consumers to producers d) Using wholesalers as the only intermediaries
in the supply chain Answer: c) Facilitating the return and exchange of
products from consumers to producers
810. Which of the following is an advantage of using a reverse channel
of distribution? a) It allows companies to maintain more control over
their products b) It increases the number of intermediaries in the supply
chain c) It encourages retailers to stock products at a faster rate d) It
enhances customer satisfaction and builds trust Answer: d) It enhances
customer satisfaction and builds trust
811. Which of the following is a limitation of using a reverse channel of
distribution? a) It increases the cost of products for consumers b) It slows
down the distribution process c) It limits the number of retail outlets
carrying the products d) It decreases the efficiency of the supply chain
Answer: b) It slows down the distribution process
812. The choice of a channel of distribution has a significant impact on
a company's: a) Pricing strategy b) Product design and development c)
Sales revenue and market reach d) Employee hiring process Answer: c)
Sales revenue and market reach
CHAPTER 17 MARKET
813. What is a market? a) A physical place where buyers and sellers
meet b) A group of people with similar interests c) A mechanism for
exchanging goods and services d) A specific location for selling
agricultural products Answer: c) A mechanism for exchanging goods and
services
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814. In a market, demand refers to: a) The quantity of goods and

services buyers are willing to produce b) The quantity of goods and
services sellers are willing to produce c) The quantity of goods and
services buyers are willing and able to purchase at a given price d) The
quantity of goods and services sellers are willing and able to produce at a
given price Answer: c) The quantity of goods and services buyers are
willing and able to purchase at a given price
815. In a market, supply refers to: a) The quantity of goods and services
buyers are willing to produce b) The quantity of goods and services
sellers are willing to produce c) The quantity of goods and services buyers
are willing and able to purchase at a given price d) The quantity of goods
and services sellers are willing and able to produce at a given price
Answer: d) The quantity of goods and services sellers are willing and able
to produce at a given price
816. What is a competitive market? a) A market with only a few sellers
and many buyers b) A market with many sellers and few buyers c) A
market with only one seller and many buyers d) A market with only one
buyer and many sellers Answer: b) A market with many sellers and few
buyers
817. In a competitive market, prices are primarily determined by: a)
Sellers b) Buyers c) Government regulations d) Supply and demand forces
Answer: d) Supply and demand forces
818. What is a monopoly? a) A market with many sellers and many
buyers b) A market with only one seller and many buyers c) A market
with only one buyer and many sellers d) A market with only a few sellers
and many buyers Answer: b) A market with only one seller and many
buyers
819. Which of the following is a characteristic of a monopoly? a) High
level of competition b) Many sellers offering similar products c) Single
seller with significant control over prices d) Low barriers to entry for new
firms Answer: c) Single seller with significant control over prices
820. What is a perfectly competitive market? a) A market with only one
seller and many buyers b) A market with only a few sellers and many
buyers c) A market with many sellers and few buyers d) A market with
many sellers and many buyers Answer: d) A market with many sellers
and many buyers
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821. In a perfectly competitive market, sellers and buyers have: a)

Limited information about prices and products b) No influence over
prices as they are determined by market forces c) Significant control over
prices d) High barriers to entry for new firms Answer: b) No influence
over prices as they are determined by market forces
822. Which of the following is a characteristic of a monopolistic
competition? a) Many sellers offering identical products b) A single seller
with significant control over prices c) Product differentiation among
sellers d) Low barriers to entry for new firms Answer: c) Product
differentiation among sellers
823. What is an oligopoly? a) A market with many sellers and many
buyers b) A market with only one seller and many buyers c) A market
with only a few sellers and many buyers d) A market with many sellers
and few buyers Answer: c) A market with only a few sellers and many
buyers
824. In an oligopoly, prices are primarily determined by: a) Government
regulations b) Sellers c) Buyers d) The few dominant sellers in the market
Answer: d) The few dominant sellers in the market
825. What is a buyer's market? a) A market with many sellers and few
buyers b) A market with only one buyer and many sellers c) A market
with many sellers and many buyers d) A market with only a few sellers
and many buyers Answer: c) A market with many sellers and many
buyers
826. What is a seller's market? a) A market with many sellers and many
buyers b) A market with many sellers and few buyers c) A market with
only one buyer and many sellers d) A market with only a few sellers and
many buyers Answer: b) A market with many sellers and few buyers
827. What is the equilibrium price in a market? a) The price at which
sellers want to sell their goods b) The price at which buyers want to buy
goods c) The price at which the quantity demanded equals the quantity
supplied d) The price set by the government to control inflation Answer:
c) The price at which the quantity demanded equals the quantity
supplied
828. When there is a shortage in a market, it means that: a) The
quantity demanded is greater than the quantity supplied b) The quantity
demanded is less than the quantity supplied c) The market is in
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equilibrium d) The prices are too high Answer: a) The quantity demanded
is greater than the quantity supplied
829. When there is a surplus in a market, it means that: a) The quantity
demanded is greater than the quantity supplied b) The quantity
demanded is less than the quantity supplied c) The market is in
equilibrium d) The prices are too low Answer: b) The quantity demanded
is less than the quantity supplied
830. What is a black market? a) A market where illegal goods and
services are bought and sold b) A market where only black-colored
products are sold c) A market with only one buyer and many sellers d) A
market with many sellers and few buyers Answer: a) A market where
illegal goods and services are bought and sold
831. What is a gray market? a) A market where only gray-colored
products are sold b) A market where legal goods are sold without proper
authorization from the manufacturer c) A market with many sellers and
few buyers d) A market with only one buyer and many sellers Answer: b)
A market where legal goods are sold without proper authorization from
the manufacturer
832. What is the target market of a company? a) The largest market in
the industry b) The entire population of a country c) A specific group of
customers for whom a product or service is designed d) The market with
the highest purchasing power Answer: c) A specific group of customers
for whom a product or service is designed
833. What is market segmentation? a) The process of dividing the
entire market into small segments b) The process of targeting the largest
market segment c) The process of identifying and categorizing customers
based on similar characteristics d) The process of reducing competition in
the market Answer: c) The process of identifying and categorizing
customers based on similar characteristics
834. Which of the following is NOT a common basis for market
segmentation? a) Demographic factors b) Geographic factors c)
Psychographic factors d) Monetary factors Answer: d) Monetary factors
835. Which of the following is an example of a demographic factor for
market segmentation? a) Lifestyle preferences b) Age group c) Social
media usage d) Brand loyalty Answer: b) Age group
836. Which of the following is an example of a geographic factor for
market segmentation? a) Income level b) Family size c) Climate and
94
weather conditions d) Product usage frequency Answer: c) Climate and

weather conditions
837. Which of the following is an example of a psychographic factor for
market segmentation? a) Occupation and education level b) Buying
behavior and lifestyle c) Geographic location d) Product attributes and
features Answer: b) Buying behavior and lifestyle
838. What is positioning in marketing? a) The process of identifying
potential markets b) The process of developing a marketing plan c) The
process of differentiating a product or brand in the minds of consumers
d) The process of determining the pricing strategy for a product Answer:
c) The process of differentiating a product or brand in the minds of
consumers
839. What is a marketing mix? a) The process of promoting a product
through advertisements b) The combination of product, price, place, and
promotion used by a company to market its products c) The process of
selling a product directly to consumers without intermediaries d) The
process of conducting market research to identify consumer needs
Answer: b) The combination of product, price, place, and promotion used
by a company to market its products
840. What is product in the marketing mix? a) The price at which a
product is sold to consumers b) The physical features and attributes of a
product c) The location where a product is sold d) The process of
communicating with consumers to create awareness about a product
Answer: b) The physical features and attributes of a product
841. What is price in the marketing mix? a) The amount of money
consumers are willing to spend on a product b) The physical features and
attributes of a product c) The location where a product is sold d) The
process of communicating with consumers to create awareness about a
product Answer: a) The amount of money consumers are willing to spend
on a product
842. What is place in the marketing mix? a) The amount of money
attributes of a product c) The location where a product is sold d) The
process of communicating with consumers to create awareness about a
product Answer: c) The location where a product is sold
843. What is promotion in the marketing mix? a) The amount of money
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attributes of a product c) The process of communicating with consumers

to create awareness about a product d) The location where a product is
sold Answer: c) The process of communicating with consumers to create
awareness about a product
844. What is market research? a) The process of advertising a product
to potential customers b) The process of selling a product directly to
consumers without intermediaries c) The process of gathering
information about consumer preferences and market trends d) The
process of determining the pricing strategy for a product Answer: c) The
process of gathering information about consumer preferences and
market trends
845. Which of the following is a method of conducting primary market
research? a) Analyzing data from government reports b) Using data from
existing market research studies c) Conducting surveys and interviews
with consumers d) Analyzing sales and revenue reports of competitors
Answer: c) Conducting surveys and interviews with consumers
846. Which of the following is a method of conducting secondary
market research? a) Conducting surveys and interviews with consumers
b) Analyzing data from government reports c) Observing consumer
behavior in stores d) Testing a new product with a small group of
consumers Answer: b) Analyzing data from government reports
847. What is the purpose of conducting market research? a) To sell
products directly to consumers b) To develop marketing strategies c) To
create awareness about a product d) To determine the pricing strategy
for a product Answer: b) To develop marketing strategies
848. What is demand forecasting in marketing? a) The process of
estimating the demand for a product in the future b) The process of
analyzing past sales data to determine consumer preferences c) The
process of setting the price for a product based on market conditions d)
The process of advertising a product to potential customers Answer: a)
The process of estimating the demand for a product in the future
849. What is the purpose of demand forecasting? a) To determine the
pricing strategy for a product b) To create awareness about a product c)
To estimate the number of competitors in the market d) To help
companies plan production and inventory levels Answer: d) To help
companies plan production and inventory levels
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850. Which of the following is a factor that affects demand forecasting?

a) The number of competitors in the market b) The location of the
market c) Changes in consumer income d) The physical features of a
product Answer: c) Changes in consumer income
851. What is a market segment? a) The entire market for a product or
service b) A specific group of customers with similar needs and
preferences c) The physical features and attributes of a product d) The
process of advertising a product to potential customers Answer: b) A
specific group of customers with similar needs and preferences
852. Which of the following is an example of a market segment? a) The
entire population of a country b) All the people who use smartphones c)
People from different countries d) People with different hobbies and
interests Answer: b) All the people who use smartphones
853. What is market share? a) The percentage of a company's profit in
the overall market b) The total revenue generated by a company in a
specific market segment c) The percentage of the total market that is
controlled by a company d) The total number of customers a company
has in a specific market segment Answer: c) The percentage of the total
market that is controlled by a company
854. What is market positioning? a) The process of identifying potential
markets b) The process of developing a marketing plan c) The process of
differentiating a product or brand in the minds of consumers d) The
process of determining the pricing strategy for a product Answer: c) The
855. What is market segmentation? a) The process of dividing the
entire market into small segments b) The process of targeting the largest
market segment c) The process of identifying and categorizing customers
based on similar characteristics d) The process of reducing competition in
the market Answer: c) The process of identifying and categorizing
customers based on similar characteristics
segmentation? a) Demographic factors b) Geographic factors c)
Psychographic factors d) Monetary factors Answer: d) Monetary factors
857. Which of the following is an example of a demographic factor for
market segmentation? a) Lifestyle preferences b) Age group c) Social
media usage d) Brand loyalty Answer: b) Age group
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858. Which of the following is an example of a geographic factor for

market segmentation? a) Income level b) Family size c) Climate and
weather conditions d) Product usage frequency Answer: c) Climate and
weather conditions
859. Which of the following is an example of a psychographic factor for
market segmentation? a) Occupation and education level b) Buying
behavior and lifestyle c) Geographic location d) Product attributes and
features Answer: b) Buying behavior and lifestyle
860. What is positioning in marketing? a) The process of identifying
potential markets b) The process of developing a marketing plan c) The
d) The process of determining the pricing strategy for a product Answer:
c) The process of differentiating a product or brand in the minds of
consumers
861. What is a marketing mix? a) The process of promoting a product
through advertisements b) The combination of product, price, place, and
promotion used by a company to market its products c) The process of
selling a product directly to consumers without intermediaries d) The
process of conducting market research to identify consumer needs
Answer: b) The combination of product, price, place, and promotion used
by a company to market its products
862. What is product in the marketing mix? a) The price at which a
product is sold to consumers b) The physical features and attributes of a
product c) The location where a product is sold d) The process of
communicating with consumers to create awareness about a product
Answer: b) The physical features and attributes of a product
CHAPTER 18 MARKETING
863. Marketing is best defined as: a) Selling products to customers b)
Identifying and satisfying customer needs c) Maximizing profits for the
company d) Creating advertisements for products Answer: b) Identifying
and satisfying customer needs
864. Which of the following is NOT a core concept of marketing? a)
Product b) Price c) Promotion d) Profit Answer: d) Profit
865. The process of dividing a market into distinct groups of buyers with
different needs, characteristics, or behaviors is called: a) Segmentation b)
Targeting c) Positioning d) Differentiation Answer: a) Segmentation
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segmentation? a) Demographic b) Geographic c) Psychographic d)
Profitability Answer: d) Profitability
867. The marketing mix consists of the 4Ps, which are: a) Product, Price,
Place, Promotion b) Profit, Product, Place, Promotion c) Product, Profit,
Promotion, Place d) Place, Promotion, Product, Profit Answer: a) Product,
Price, Place, Promotion
868. A product's unique selling proposition (USP) refers to: a) The
lowest price in the market b) The product's features and design c) A
specific, unique benefit that differentiates it from competitors d) The
popularity of the product among customers Answer: c) A specific, unique
benefit that differentiates it from competitors
869. What is the process of designing and representing a product so
that it appeals to the target market? a) Positioning b) Differentiation c)
Packaging d) Branding Answer: d) Branding
870. The total value of a customer to a company over the course of
their relationship is known as: a) Customer loyalty b) Customer lifetime
value (CLV) c) Customer retention d) Customer satisfaction Answer: b)
Customer lifetime value (CLV)
871. Which element of the marketing mix is concerned with
communicating information about a product or service to the target
audience? a) Product b) Place c) Price d) Promotion Answer: d)
Promotion
872. The process of setting a high initial price for a new product and
then gradually lowering it over time is called: a) Penetration pricing b)
Skimming pricing c) Competitive pricing d) Psychological pricing Answer:
b) Skimming pricing
873. Which pricing strategy involves setting a low initial price for a new
product to attract customers and gain market share quickly? a)
Penetration pricing b) Skimming pricing c) Competitive pricing d)
Psychological pricing Answer: a) Penetration pricing
874. When a company sets prices based on the prices charged by
competitors, it is using: a) Penetration pricing b) Skimming pricing c)
Competitive pricing d) Psychological pricing Answer: c) Competitive
pricing
875. What is the process of influencing consumers to buy a product
through advertising, personal selling, and other promotional methods?
99
a) Sales promotion b) Public relations c) Advertising d) Promotion

Answer: d) Promotion
876. The process of managing and controlling the company's
interactions with customers, both current and potential, is known as: a)
Customer relationship management (CRM) b) Public relations c)
Advertising d) Sales promotion Answer: a) Customer relationship
management (CRM)
877. What is the marketing concept? a) Focusing on maximizing
production efficiency b) Focusing on minimizing costs and maximizing
profits c) Focusing on customer needs and satisfaction d) Focusing on
aggressive selling and promotion Answer: c) Focusing on customer needs
and satisfaction
878. Which of the following is a step in the marketing research process?
a) Implementing marketing strategies b) Designing the marketing mix c)
Conducting surveys and collecting data d) Analyzing competitor pricing
strategies Answer: c) Conducting surveys and collecting data
879. Which type of marketing research involves gathering data from
existing sources? a) Primary research b) Secondary research c)
Experimental research d) Observational research Answer: b) Secondary
research
880. Which type of marketing research involves gathering data directly
from consumers through surveys, interviews, or focus groups? a) Primary
research b) Secondary research c) Experimental research d)
Observational research Answer: a) Primary research
881. Which of the following is NOT a common advertising medium? a)
Television b) Radio c) Newspaper d) Billboards Answer: c) Newspaper
882. Which promotional strategy involves offering special deals and
discounts to encourage immediate purchases? a) Sales promotion b)
Public relations c) Personal selling d) Direct marketing Answer: a) Sales
promotion
883. Which type of marketing involves using influencers and individuals
with large followings on social media to promote a product or brand? a)
Content marketing b) Social media marketing c) Influencer marketing d)
Guerrilla marketing Answer: c) Influencer marketing
884. Which of the following is a characteristic of digital marketing? a) It
only targets older demographics b) It is limited to one-way
communication c) It allows for real-time interaction with customers d) It
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is less cost-effective than traditional marketing Answer: c) It allows for

real-time interaction with customers
885. What is the process of identifying potential customers and
convincing them to buy a product or service? a) Advertising b) Personal
selling c) Sales promotion d) Public relations Answer: b) Personal selling
886. Which pricing strategy involves setting prices that end in 99 or 95
to create the perception of a lower price? a) Odd-even pricing b)
Skimming pricing c) Penetration pricing d) Competitive pricing Answer: a)
Odd-even pricing
887. What is a unique feature or benefit of a product that sets it apart
from competitors in the minds of customers? a) Promotion b) Place c)
Differentiation d) Pricing Answer: c) Differentiation
888. The process of distributing a product from the manufacturer to the
end consumer is known as: a) Promotion b) Place c) Differentiation d)
Pricing Answer: b) Place
889. Which pricing strategy involves setting prices slightly below a
whole number, such as $9.99 instead of $10.00? a) Odd-even pricing b)
Odd-even pricing
890. What is the process of building and maintaining positive
relationships with the media and the public to enhance a company's
reputation? a) Advertising b) Public relations c) Sales promotion d)
Personal selling Answer: b) Public relations
891. Which type of advertising is designed to create awareness and
interest in a product or brand? a) Informative advertising b) Persuasive
advertising c) Comparative advertising d) Reminder advertising Answer:
a) Informative advertising
892. Which type of advertising aims to persuade customers to buy a
product or brand? a) Informative advertising b) Persuasive advertising c)
Comparative advertising d) Reminder advertising Answer: b) Persuasive
advertising
893. Which type of advertising compares a company's product to that
of a competitor? a) Informative advertising b) Persuasive advertising c)
Comparative advertising d) Reminder advertising Answer: c)
Comparative advertising
894. Which type of advertising aims to reinforce the memory of a
product or brand? a) Informative advertising b) Persuasive advertising c)
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Comparative advertising d) Reminder advertising Answer: d) Reminder

advertising
895. What is the process of measuring the success of marketing efforts
and adjusting strategies accordingly? a) Marketing planning b)
Marketing control c) Marketing research d) Marketing evaluation
Answer: b) Marketing control
896. Which type of marketing aims to create and distribute valuable,
relevant, and consistent content to attract and engage a target
audience? a) Content marketing b) Social media marketing c) Influencer
marketing d) Guerrilla marketing Answer: a) Content marketing
897. Which type of marketing involves using unconventional and
innovative strategies to promote a product or brand? a) Content
marketing b) Social media marketing c) Influencer marketing d) Guerrilla
marketing Answer: d) Guerrilla marketing
898. What is the process of managing and controlling the company's
interactions with customers, both current and potential, is known as: a)
Customer relationship management (CRM) b) Public relations c)
Advertising d) Sales promotion Answer: a) Customer relationship
management (CRM)
899. What is the marketing concept? a) Focusing on maximizing
production efficiency b) Focusing on minimizing costs and maximizing
profits c) Focusing on customer needs and satisfaction d) Focusing on
aggressive selling and promotion Answer: c) Focusing on customer needs
and satisfaction
900. Which of the following is a step in the marketing research process?
a) Implementing marketing strategies b) Designing the marketing mix c)
Conducting surveys and collecting data d) Analyzing competitor pricing
strategies Answer: c) Conducting surveys and collecting data
901. Which type of marketing research involves gathering data from
existing sources? a) Primary research b) Secondary research c)
Experimental research d) Observational research Answer: b) Secondary
research
902. Which type of marketing research involves gathering data directly
from consumers through surveys, interviews, or focus groups? a) Primary
research b) Secondary research c) Experimental research d)
Observational research Answer: a) Primary research
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903. Which of the following is NOT a common advertising medium? a)

Television b) Radio c) Newspaper d) Billboards Answer: c) Newspaper
904. Which promotional strategy involves offering special deals and
discounts to encourage immediate purchases? a) Sales promotion b)
Public relations c) Personal selling d) Direct marketing Answer: a) Sales
promotion
905. Which type of marketing involves using influencers and individuals
with large followings on social media to promote a product or brand? a)
Content marketing b) Social media marketing c) Influencer marketing d)
Guerrilla marketing Answer: c) Influencer marketing
906. Which of the following is a characteristic of digital marketing? a) It
only targets older demographics b) It is limited to one-way
communication c) It allows for real-time interaction with customers d) It
is less cost-effective than traditional marketing Answer: c) It allows for
real-time interaction with customers
907. What is the process of identifying potential customers and
convincing them to buy a product or service? a) Advertising b) Personal
selling c) Sales promotion d) Public relations Answer: b) Personal selling
908. Which pricing strategy involves setting prices that end in 99 or 95
to create the perception of a lower price? a) Odd-even pricing b)
Odd-even pricing
909. What is a unique feature or benefit of a product that sets it apart
from competitors in the minds of customers? a) Promotion b) Place c)
Differentiation d) Pricing Answer: c) Differentiation
910. The process of distributing a product from the manufacturer to the
end consumer is known as: a) Promotion b) Place c) Differentiation d)
Pricing Answer: b) Place
911. Which pricing strategy involves setting prices slightly below a
whole number, such as $9.99 instead of $10.00? a) Odd-even pricing b)
Odd-even pricing
912. What is the process of building and maintaining positive
relationships with the media and the public to enhance a company's
reputation? a) Advertising b) Public relations c) Sales promotion d)
Personal selling Answer: b) Public relations
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CHAPTER 19 SALES PROMOTION

913. Sales promotion is a type of: a) Personal selling b) Advertising c)
Public relations d) Marketing communication Answer: d) Marketing
communication
914. Which of the following is NOT a common objective of sales
promotion? a) Increasing brand awareness b) Boosting short-term sales
c) Encouraging repeat purchases d) Building long-term customer loyalty
Answer: d) Building long-term customer loyalty
915. Sales promotion techniques are primarily used to target: a)
Distributors and retailers b) Competitors c) End consumers and
customers d) Sales representatives Answer: c) End consumers and
customers
916. A buy-one-get-one-free (BOGO) offer is an example of which type
of sales promotion technique? a) Premiums b) Price discounts c) Samples
d) Point-of-purchase displays Answer: b) Price discounts
917. Which sales promotion technique involves offering free items
along with the purchase of a product? a) Premiums b) Rebates c)
Coupons d) Point-of-purchase displays Answer: a) Premiums
918. "Save $10 on your next purchase" is an example of which sales
promotion technique? a) Premiums b) Rebates c) Coupons d) Point-of-
purchase displays Answer: b) Rebates
919. Which of the following is a sales promotion technique that allows
customers to receive a partial refund for their purchase? a) Premiums b)
Rebates c) Coupons d) Point-of-purchase displays Answer: b) Rebates
920. "Get 20% off your purchase with this coupon" is an example of
which sales promotion technique? a) Premiums b) Rebates c) Coupons d)
Point-of-purchase displays Answer: c) Coupons
921. Which sales promotion technique involves setting up displays or
demonstrations at the point of sale to attract customers? a) Premiums b)
Rebates c) Coupons d) Point-of-purchase displays Answer: d) Point-of-
purchase displays
922. What is the primary purpose of point-of-purchase displays? a) To
provide information about the product b) To entertain customers while
they wait in line c) To attract customers' attention and encourage
impulse purchases d) To offer special deals to distributors and retailers
Answer: c) To attract customers' attention and encourage impulse
purchases
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923. Which of the following sales promotion techniques is effective for

introducing a new product to the market? a) Premiums b) Rebates c)
Samples d) Point-of-purchase displays Answer: c) Samples
924. Which sales promotion technique allows customers to try a
product before making a purchase? a) Premiums b) Rebates c) Samples
d) Point-of-purchase displays Answer: c) Samples
925. What is the purpose of offering loyalty rewards programs as a
sales promotion technique? a) To attract new customers b) To encourage
repeat purchases and build customer loyalty c) To offer discounts to
distributors and retailers d) To compete with competitors' promotions
Answer: b) To encourage repeat purchases and build customer loyalty
926. Which sales promotion technique involves offering discounts or
special deals to customers who make frequent purchases or accumulate
points? a) Premiums b) Rebates c) Samples d) Loyalty rewards programs
Answer: d) Loyalty rewards programs
927. Which sales promotion technique is commonly used to encourage
customers to make immediate purchases? a) Premiums b) Rebates c)
Coupons d) Point-of-purchase displays Answer: c) Coupons
928. "Get a free tote bag with the purchase of any two items" is an
example of which sales promotion technique? a) Premiums b) Rebates c)
Coupons d) Point-of-purchase displays Answer: a) Premiums
929. What is the purpose of offering contests and sweepstakes as sales
promotion techniques? a) To boost short-term sales b) To build long-term
customer loyalty c) To provide information about the product d) To
encourage repeat purchases Answer: a) To boost short-term sales
930. Which sales promotion technique involves offering customers the
chance to win prizes or money by participating in a game or drawing? a)
Premiums b) Contests c) Samples d) Loyalty rewards programs Answer:
b) Contests
931. Which of the following sales promotion techniques is often used in
conjunction with advertising to create excitement and interest in a
product? a) Premiums b) Contests c) Samples d) Point-of-purchase
displays Answer: b) Contests
932. "Enter for a chance to win a trip to Hawaii" is an example of which
sales promotion technique? a) Premiums b) Contests c) Samples d) Point-
of-purchase displays Answer: b) Contests
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933. Which sales promotion technique involves offering customers a

reduced price on a product for a limited time? a) Premiums b) Contests c)
Price discounts d) Point-of-purchase displays Answer: c) Price discounts
934. What is the purpose of using flash sales or limited-time offers as a
sales promotion technique? a) To build long-term customer loyalty b) To
attract new customers c) To encourage repeat purchases d) To create a
sense of urgency and boost sales quickly Answer: d) To create a sense of
urgency and boost sales quickly
935. "50% off all items this weekend only" is an example of which sales
promotion technique? a) Premiums b) Contests c) Price discounts d)
Point-of-purchase displays Answer: c) Price discounts
936. Which of the following sales promotion techniques is commonly
used to promote seasonal products or clearance items? a) Premiums b)
Contests c) Price discounts d) Point-of-purchase displays Answer: c) Price
discounts
937. Which sales promotion technique involves offering customers a
refund on their purchase if they are not satisfied with the product? a)
Premiums b) Contests c) Price discounts d) Money-back guarantees
Answer: d) Money-back guarantees
938. "Try our product risk-free with a 30-day money-back guarantee" is
an example of which sales promotion technique? a) Premiums b)
Contests c) Price discounts d) Money-back guarantees Answer: d) Money-
back guarantees
939. What is the purpose of offering trade promotions as a sales
promotion technique? a) To attract new customers b) To encourage
repeat purchases c) To offer discounts to distributors and retailers d) To
build long-term customer loyalty Answer: c) To offer discounts to
distributors and retailers
940. Which sales promotion technique is directed towards wholesalers,
retailers, and distributors rather than end consumers? a) Premiums b)
Trade promotions c) Price discounts d) Point-of-purchase displays
Answer: b) Trade promotions
941. Which sales promotion technique involves offering discounts,
allowances, or incentives to retailers or distributors for purchasing and
promoting the product? a) Premiums b) Trade promotions c) Price
discounts d) Point-of-purchase displays Answer: b) Trade promotions
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942. "Get 20% off your next order of our products" is an example of
which sales promotion technique? a) Premiums b) Trade promotions c)
Price discounts d) Point-of-purchase displays Answer: b) Trade
promotions
943. Which of the following is NOT a consumer-oriented sales
promotion technique? a) Price discounts b) Samples c) Trade promotions
d) Coupons Answer: c) Trade promotions
opportunity to purchase a product before its official launch or before it is
available to the general public? a) Premiums b) Pre-launch promotions c)
Price discounts d) Point-of-purchase displays Answer: b) Pre-launch
promotions
945. What is the purpose of using pre-launch promotions as a sales
promotion technique? a) To attract new customers b) To encourage
repeat purchases c) To create buzz and excitement around a new product
d) To provide information about the product Answer: c) To create buzz
and excitement around a new product
946. "Be the first to try our new product! Pre-order now and get a
special gift" is an example of which sales promotion technique? a)
Premiums b) Pre-launch promotions c) Price discounts d) Point-of-
purchase displays Answer: b) Pre-launch promotions
chance to win prizes or rewards for making purchases? a) Premiums b)
Incentive programs c) Price discounts d) Point-of-purchase displays
Answer: b) Incentive programs
948. What is the purpose of using incentive programs as a sales
promotion technique? a) To boost short-term sales b) To build long-term
customer loyalty c) To attract new customers d) To create a sense of
urgency and boost sales quickly Answer: b) To build long-term customer
loyalty
949. "Earn points for every purchase and redeem them for discounts or
free products" is an example of which sales promotion technique? a)
Premiums b) Incentive programs c) Price discounts d) Point-of-purchase
displays Answer: b) Incentive programs
950. Which sales promotion technique involves offering discounts or
special deals to customers who refer new customers to the company? a)
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Premiums b) Referral programs c) Price discounts d) Point-of-purchase

displays Answer: b) Referral programs
951. What is the purpose of using referral programs as a sales
promotion technique? a) To boost short-term sales b) To encourage
repeat purchases c) To attract new customers through word-of-mouth
marketing d) To create a sense of urgency and boost sales quickly
Answer: c) To attract new customers through word-of-mouth marketing
952. "Refer a friend and both of you get 10% off your next purchase" is
an example of which sales promotion technique? a) Premiums b) Referral
programs c) Price discounts d) Point-of-purchase displays Answer: b)
Referral programs
chance to win prizes or rewards for participating in activities or
challenges related to the brand? a) Premiums b) Gamification c) Price
discounts d) Point-of-purchase displays Answer: b) Gamification
954. What is the purpose of using gamification as a sales promotion
technique? a) To boost short-term sales b) To build long-term customer
loyalty c) To attract new customers d) To create a sense of urgency and
boost sales quickly Answer: b) To build long-term customer loyalty
955. "Complete challenges and earn points to unlock exclusive rewards"
is an example of which sales promotion technique? a) Premiums b)
Gamification c) Price discounts d) Point-of-purchase displays Answer: b)
Gamification
chance to win prizes or rewards by engaging with the brand on social
media or participating in online activities? a) Premiums b) Social media
promotions c) Price discounts d) Point-of-purchase displays Answer: b)
Social media promotions
957. What is the purpose of using social media promotions as a sales
customer loyalty c) To attract new customers through social media
engagement d) To create a sense of urgency and boost sales quickly
Answer: c) To attract new customers through social media engagement
958. "Like and share this post for a chance to win a gift card" is an
example of which sales promotion technique? a) Premiums b) Social
media promotions c) Price discounts d) Point-of-purchase displays
Answer: b) Social media promotions
108
959. Which sales promotion technique involves offering customers

special deals or rewards for downloading and using a company's mobile
app? a) Premiums b) Mobile app promotions c) Price discounts d) Point-
of-purchase displays Answer: b) Mobile app promotions
960. What is the purpose of using mobile app promotions as a sales
customer loyalty c) To attract new customers through app engagement
d) To create a sense of urgency and boost sales quickly Answer: c) To
attract new customers through app engagement
961. "Get 20% off your first purchase when you download our app" is
an example of which sales promotion technique? a) Premiums b) Mobile
app promotions c) Price discounts d) Point-of-purchase displays Answer:
b) Mobile app promotions
962. Which sales promotion technique involves offering customers
special deals or rewards for signing up for a company's email newsletter?
a) Premiums b) Email marketing promotions c) Price discounts d) Point-
of-purchase displays Answer: b) Email marketing promotions
CHAPTER 20 ADVERTISING
963. Advertising is a form of: a) Personal selling b) Public relations c)
Sales promotion d) Mass communication Answer: d) Mass
communication
964. The primary goal of advertising is to: a) Increase sales in the short
term b) Create long-term customer loyalty c) Build brand awareness and
persuade target customers d) Provide information about the company's
financial performance Answer: c) Build brand awareness and persuade
target customers
965. Which of the following is NOT a common objective of advertising?
a) Enhancing brand recognition b) Driving website traffic c) Reducing
production costs d) Promoting a new product launch Answer: c) Reducing
production costs
966. Which advertising medium allows for highly targeted and
personalized messaging based on user behavior and preferences? a)
Television b) Radio c) Print media d) Digital advertising Answer: d) Digital
advertising
967. The term "reach" in advertising refers to: a) The number of times
an ad is shown to a person b) The percentage of the target audience
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exposed to an ad during a specific time c) The cost per impression of an

ad d) The number of clicks an ad receives Answer: b) The percentage of
the target audience exposed to an ad during a specific time
968. "Frequency" in advertising refers to: a) The number of times an ad
is shown to a person b) The percentage of the target audience exposed
to an ad during a specific time c) The cost per impression of an ad d) The
number of clicks an ad receives Answer: a) The number of times an ad is
shown to a person
969. Which advertising appeal aims to evoke positive emotions and
desires in the target audience? a) Emotional appeal b) Rational appeal c)
Fear appeal d) Humor appeal Answer: a) Emotional appeal
970. Which advertising appeal relies on logic, reason, and facts to
persuade the target audience? a) Emotional appeal b) Rational appeal c)
Fear appeal d) Humor appeal Answer: b) Rational appeal
971. Which advertising appeal uses fear to persuade the target
audience to take action? a) Emotional appeal b) Rational appeal c) Fear
appeal d) Humor appeal Answer: c) Fear appeal
972. Which advertising appeal aims to entertain and make the
audience laugh? a) Emotional appeal b) Rational appeal c) Fear appeal
d) Humor appeal Answer: d) Humor appeal
973. "Buy now and get 50% off!" is an example of which type of
advertising appeal? a) Emotional appeal b) Rational appeal c) Fear
appeal d) Promotional appeal Answer: d) Promotional appeal
974. What is the purpose of using a promotional appeal in advertising?
a) To evoke positive emotions in the target audience b) To provide logical
reasons for buying the product c) To create a sense of urgency and
encourage immediate action d) To use fear to persuade the audience
Answer: c) To create a sense of urgency and encourage immediate action
975. "Join thousands of satisfied customers!" is an example of which
type of advertising appeal? a) Emotional appeal b) Social appeal c)
Testimonial appeal d) Promotional appeal Answer: c) Testimonial appeal
976. Which advertising appeal uses real people or celebrities to endorse
and recommend a product? a) Emotional appeal b) Social appeal c)
977. "9 out of 10 dentists recommend our toothpaste" is an example of
which type of advertising appeal? a) Emotional appeal b) Social appeal c)
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978. What is the purpose of using a social appeal in advertising? a) To

evoke positive emotions in the target audience b) To create a sense of
belonging and social acceptance c) To use fear to persuade the audience
d) To provide logical reasons for buying the product Answer: b) To create
a sense of belonging and social acceptance
979. Which advertising appeal aims to show how a product can help
the target audience avoid negative consequences or problems? a)
Emotional appeal b) Social appeal c) Problem-solving appeal d)
Promotional appeal Answer: c) Problem-solving appeal
980. "Say goodbye to stubborn stains with our powerful detergent" is
an example of which type of advertising appeal? a) Emotional appeal b)
Social appeal c) Problem-solving appeal d) Promotional appeal Answer:
c) Problem-solving appeal
981. Which advertising appeal uses the curiosity of the audience to
engage and draw them into the ad? a) Emotional appeal b) Curiosity
appeal c) Testimonial appeal d) Promotional appeal Answer: b) Curiosity
appeal
982. "Find out the secret to glowing skin!" is an example of which type
of advertising appeal? a) Emotional appeal b) Curiosity appeal c)
Problem-solving appeal d) Promotional appeal Answer: b) Curiosity
appeal
983. Which of the following is NOT a common advertising platform for
television ads? a) Cable TV b) Broadcast TV c) Streaming services d)
Billboards Answer: d) Billboards
984. Which advertising platform allows advertisers to target specific
geographic locations with outdoor ads? a) Cable TV b) Broadcast TV c)
Streaming services d) Billboards Answer: d) Billboards
radio ads? a) FM radio b) AM radio c) Online streaming services d)
Magazines Answer: d) Magazines
986. Which advertising platform allows advertisers to reach a specific
target audience based on their interests and behavior? a) FM radio b)
AM radio c) Online streaming services d) Magazines Answer: c) Online
streaming services
print ads? a) Newspapers b) Magazines c) Brochures d) Online banner
ads Answer: d) Online banner ads
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988. Which advertising platform allows advertisers to reach a broad

audience with ads that appear in newspapers across the country? a)
Newspapers b) Magazines c) Brochures d) Online banner ads Answer: a)
Newspapers
digital ads? a) Social media b) Search engines c) Outdoor billboards d)
Websites Answer: c) Outdoor billboards
keywords and show ads to users searching for those keywords? a) Social
media b) Search engines c) Outdoor billboards d) Websites Answer: b)
Search engines
social media ads? a) Facebook b) Instagram c) Twitter d) Direct mail
Answer: d) Direct mail
demographics and interests of users on various social media platforms?
a) Facebook b) Instagram c) Twitter d) Direct mail Answer: a) Facebook
online display ads? a) Google Display Network b) Facebook Audience
Network c) LinkedIn d) YouTube Answer: c) LinkedIn
994. Which advertising platform allows advertisers to display ads on a
wide network of websites and reach a large audience? a) Google Display
Network b) Facebook Audience Network c) LinkedIn d) YouTube Answer:
a) Google Display Network
mobile ads? a) In-app ads b) SMS marketing c) Billboards d) Push
notifications Answer: c) Billboards
996. Which advertising platform allows advertisers to reach users on
their mobile devices with ads displayed within mobile apps? a) In-app
ads b) SMS marketing c) Billboards d) Push notifications Answer: a) In-
app ads
email marketing? a) Gmail ads b) Newsletter sponsorships c) Website
pop-ups d) Push notifications Answer: d) Push notifications
998. Which advertising platform allows advertisers to display ads
within users' Gmail inboxes? a) Gmail ads b) Newsletter sponsorships c)
Website pop-ups d) Push notifications Answer: a) Gmail ads
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influencer marketing? a) Instagram b) YouTube c) TV commercials d)
TikTok Answer: c) TV commercials
1000. Which advertising platform allows advertisers to partner with
influencers to promote their products or brands to their followers? a)
Instagram b) YouTube c) TV commercials d) TikTok Answer: a) Instagram
video ads? a) YouTube b) TV commercials c) Facebook d) Snapchat
Answer: c) Facebook
1002. Which advertising platform allows advertisers to show video ads
to users on various online platforms? a) YouTube b) TV commercials c)
Facebook d) Snapchat Answer: a) YouTube
native ads? a) Google AdSense b) Sponsored content on websites c)
Social media feeds d) TV commercials Answer: d) TV commercials
1004. Which advertising platform allows advertisers to display ads that
match the look and feel of the content on the website or platform? a)
Google AdSense b) Sponsored content on websites c) Social media feeds
d) TV commercials Answer: a) Google AdSense
interactive ads? a) Pop-up ads b) Virtual reality (VR) ads c) Augmented
reality (AR) ads d) TV commercials Answer: d) TV commercials
1006. Which advertising platform allows advertisers to engage users
through interactive and immersive experiences? a) Pop-up ads b) Virtual
reality (VR) ads c) Augmented reality (AR) ads d) TV commercials Answer:
c) Augmented reality (AR) ads
out-of-home (OOH) ads? a) Billboards b) Transit ads c) Radio d) Digital
screens in public spaces Answer: c) Radio
1008. Which advertising platform allows advertisers to display ads on
buses, trains, and other public transportation vehicles? a) Billboards b)
Transit ads c) Radio d) Digital screens in public spaces Answer: b) Transit
ads
influencer marketing? a) Instagram b) YouTube c) TV commercials d)
TikTok Answer: c) TV commercials
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1010. Which advertising platform allows advertisers to partner with

influencers to promote their products or brands to their followers? a)
Instagram b) YouTube c) TV commercials d) TikTok Answer: a) Instagram
print ads? a) Newspapers b) Magazines c) Brochures d) Online banner
ads Answer: d) Online banner ads
1012. Which advertising platform allows advertisers to reach a broad
audience with ads that appear in newspapers across the country? a)
Newspapers b) Magazines c) Brochures d) Online banner ads Answer: a)
Newspapers
CHAPTER 21 BUSINESS RISK

1013. Business risk refers to the possibility of: a) Generating high profits
b) Incurring losses or experiencing adverse outcomes c) Attracting new
customers d) Expanding the business rapidly Answer: b) Incurring losses
or experiencing adverse outcomes
1014. Which of the following is NOT a common type of business risk? a)
Financial risk b) Market risk c) Human resource risk d) Social media risk
Answer: d) Social media risk
1015. Financial risk in a business is associated with: a) Hiring new
employees b) Introducing a new product c) Economic conditions and
financial obligations d) Expanding to international markets Answer: c)
Economic conditions and financial obligations
1016. Market risk in a business refers to the risk of: a) Employee turnover
b) Changes in consumer preferences and demand c) Technological
advancements d) Natural disasters Answer: b) Changes in consumer
preferences and demand
1017. Operational risk in a business includes risks related to: a) Currency
exchange rates b) Regulatory changes c) Supply chain disruptions and
internal processes d) Changes in interest rates Answer: c) Supply chain
disruptions and internal processes
1018. Which business risk is associated with the potential for damage to
a company's reputation and brand image? a) Reputational risk b) Credit
risk c) Political risk d) Currency risk Answer: a) Reputational risk
1019. Legal risk in a business pertains to: a) Changes in tax rates b)
Violation of laws and regulations c) Foreign exchange fluctuations d)
Employee turnover Answer: b) Violation of laws and regulations
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1020. Strategic risk in a business involves risks associated with: a)

Product defects b) Uncertain economic conditions c) Failure to achieve
business objectives d) Technological advancements Answer: c) Failure to
achieve business objectives
1021. Which of the following is an example of an external business risk?
a) Employee turnover b) Equipment malfunction c) Economic recession d)
Internal fraud Answer: c) Economic recession
1022. Internal business risks are risks that originate from: a) Economic
conditions b) Competitors c) External stakeholders d) Within the
organization Answer: d) Within the organization
1023. Natural disasters, political instability, and changes in government
policies are examples of: a) Financial risks b) Market risks c) Economic
risks d) External risks Answer: d) External risks
1024. Which of the following is an example of a financial risk? a) Decline
in customer demand b) Increase in raw material costs c) Currency
exchange rate fluctuations d) Product recalls Answer: c) Currency
exchange rate fluctuations
1025. Business risk can be managed through: a) Eliminating all risks b)
Avoiding all external risks c) Identifying, assessing, and mitigating risks d)
Investing in high-risk ventures Answer: c) Identifying, assessing, and
mitigating risks
1026. Which risk management strategy involves transferring the risk to a
third party, such as an insurance company? a) Risk avoidance b) Risk
acceptance c) Risk reduction d) Risk transfer Answer: d) Risk transfer
1027. The process of evaluating the potential impact and likelihood of
risks is called: a) Risk assessment b) Risk mitigation c) Risk acceptance d)
Risk avoidance Answer: a) Risk assessment
1028. Which risk management strategy involves reducing the likelihood
or impact of a risk occurring? a) Risk avoidance b) Risk acceptance c) Risk
reduction d) Risk transfer Answer: c) Risk reduction
1029. A company decides not to invest in a high-risk venture to avoid
potential losses. This is an example of: a) Risk avoidance b) Risk
acceptance c) Risk reduction d) Risk transfer Answer: a) Risk avoidance
1030. Accepting the consequences of a risk without attempting to
control it is known as: a) Risk avoidance b) Risk acceptance c) Risk
reduction d) Risk transfer Answer: b) Risk acceptance
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1031. Which of the following is an example of risk transfer? a) Installing

security measures to reduce the risk of theft b) Purchasing insurance to
cover potential losses from a fire c) Expanding into a new market with
uncertain demand d) Accepting the consequences of a product defect
Answer: b) Purchasing insurance to cover potential losses from a fire
1032. Diversification, hedging, and using derivatives are risk
management techniques related to: a) Financial risk b) Market risk c)
Operational risk d) Strategic risk Answer: a) Financial risk
1033. A company expands its product range to reduce the risk of relying
heavily on one product. This is an example of: a) Diversification b)
Hedging c) Risk pooling d) Risk avoidance Answer: a) Diversification
1034. Hedging is a risk management technique used to mitigate risks
related to: a) Currency exchange rate fluctuations b) Supply chain
disruptions c) Technological advancements d) Economic conditions
Answer: a) Currency exchange rate fluctuations
1035. A company enters into a financial contract to protect itself against
currency fluctuations. This is an example of: a) Diversification b) Hedging
c) Risk pooling d) Risk avoidance Answer: b) Hedging
1036. Which risk management technique involves combining multiple
risks to reduce the overall impact? a) Diversification b) Hedging c) Risk
pooling d) Risk avoidance Answer: c) Risk pooling
1037. A company shares the risk of a project with other companies
through a joint venture. This is an example of: a) Diversification b)
Hedging c) Risk pooling d) Risk avoidance Answer: c) Risk pooling
1038. Business continuity planning is a risk management strategy that
focuses on: a) Eliminating all risks b) Identifying potential risks c)
Reducing the likelihood of risks d) Maintaining operations during adverse
events Answer: d) Maintaining operations during adverse events
1039. Which of the following is an example of a risk control measure? a)
Purchasing insurance b) Expanding to new markets c) Diversifying
product offerings d) Accepting the consequences of a risk Answer: a)
Purchasing insurance
1040. Risk control measures are put in place to: a) Eliminate all risks b)
Transfer all risks to a third party c) Mitigate the impact or likelihood of
risks d) Accept all risks without taking any action Answer: c) Mitigate the
impact or likelihood of risks
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1041. Which of the following is NOT a step in the risk management

process? a) Risk identification b) Risk elimination c) Risk assessment d)
Risk mitigation Answer: b) Risk elimination
1042. Which risk management step involves evaluating the potential
impact and likelihood of risks? a) Risk identification b) Risk elimination c)
Risk assessment d) Risk mitigation Answer: c) Risk assessment
1043. Risk management is essential for businesses because it helps: a)
Eliminate all risks b) Avoid all risks c) Reduce the impact of risks on the
organization d) Create more risks for the company Answer: c) Reduce the
impact of risks on the organization
1044. Business risk can arise from both internal and external factors.
Which of the following is an internal factor contributing to business risk?
a) Technological advancements b) Economic conditions c) Supply chain
disruptions d) Inadequate financial planning Answer: d) Inadequate
financial planning
1045. A company operating in a highly regulated industry faces the risk
of changes in government policies and regulations. This is an example of:
a) Market risk b) Financial risk c) Legal risk d) Operational risk Answer: c)
Legal risk
1046. Which type of risk arises from a lack of coordination and
communication among employees and departments within a company?
a) Market risk b) Financial risk c) Operational risk d) Reputational risk
Answer: c) Operational risk
1047. A company experiences a significant decline in sales due to
changes in consumer preferences. This is an example of: a) Market risk b)
Financial risk c) Operational risk d) Credit risk Answer: a) Market risk
1048. Currency fluctuations can impact a company's import and export
costs. This is an example of: a) Market risk b) Financial risk c) Currency
risk d) Credit risk Answer: c) Currency risk
1049. Which risk management strategy involves tolerating the risk and
accepting the potential consequences? a) Risk avoidance b) Risk
acceptance c) Risk reduction d) Risk transfer Answer: b) Risk acceptance
1050. A company invests in advanced security systems to reduce the risk
of theft and break-ins. This is an example of: a) Risk avoidance b) Risk
acceptance c) Risk reduction d) Risk transfer Answer: c) Risk reduction
1051. A business that expands its product range and enters new markets
is using which risk management strategy? a) Risk avoidance b) Risk
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acceptance c) Risk reduction d) Risk diversification Answer: d) Risk

diversification
1052. A company purchases insurance to protect itself against potential
losses from natural disasters. This is an example of: a) Risk avoidance b)
Risk acceptance c) Risk reduction d) Risk transfer Answer: d) Risk transfer
1053. A company conducts market research to identify potential risks
and assess their impact on the business. This is an example of: a) Risk
identification b) Risk elimination c) Risk assessment d) Risk mitigation
Answer: c) Risk assessment
1054. A business implements a backup plan to ensure continuity of
operations during a power outage. This is an example of: a) Risk
identification b) Risk elimination c) Risk assessment d) Risk mitigation
Answer: d) Risk mitigation
1055. A company decides not to invest in a risky project to avoid
potential losses. This is an example of: a) Risk identification b) Risk
elimination c) Risk assessment d) Risk avoidance Answer: d) Risk
avoidance
1056. A company diversifies its investments to reduce exposure to any
single asset or market. This is an example of: a) Risk identification b) Risk
elimination c) Risk assessment d) Risk diversification Answer: d) Risk
diversification
1057. Risk pooling involves: a) Combining risks to increase potential
losses b) Combining risks to reduce the overall impact c) Eliminating all
risks from the business d) Avoiding all external risks Answer: b)
Combining risks to reduce the overall impact
1058. A company collaborates with other firms to share the risk and
costs of a joint project. This is an example of: a) Risk pooling b) Risk
avoidance c) Risk acceptance d) Risk reduction Answer: a) Risk pooling
1059. Which of the following is NOT an example of risk reduction? a)
Hedging against currency fluctuations b) Diversifying product offerings c)
Purchasing insurance d) Sharing risks through a joint venture Answer: d)
Sharing risks through a joint venture
1060. Risk transfer involves: a) Eliminating the risk entirely b) Reducing
the likelihood of the risk occurring c) Purchasing insurance to cover
potential losses d) Accepting the consequences of the risk Answer: c)
Purchasing insurance to cover potential losses
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1061. A company conducts a thorough analysis of potential risks to

identify areas of concern. This is an example of: a) Risk identification b)
Risk elimination c) Risk assessment d) Risk avoidance Answer: a) Risk
identification
1062. A business experiences a decline in sales due to changes in
consumer preferences. Which type of risk is this? a) Financial risk b)
Market risk c) Operational risk d) Reputational risk Answer: b) Market
risk
CHAPTER 22 INSURANCE
1063. Insurance is a contract between the insurer and the insured, where
the insurer agrees to provide financial compensation in the event of: a)
Profitable business operations b) Accidental loss or damage c) Increased
market share d) Expansion to new markets Answer: b) Accidental loss or
damage
1064. The party purchasing an insurance policy is known as the: a)
Underwriter b) Insurer c) Insured d) Beneficiary Answer: c) Insured
1065. The party providing the insurance coverage and assuming the risk
is called the: a) Underwriter b) Insurer c) Insured d) Beneficiary Answer:
b) Insurer
1066. The amount the insured must pay out of pocket before the
insurance company covers the remaining expenses is called the: a)
Premium b) Deductible c) Coverage limit d) Policy term Answer: b)
Deductible
1067. The payment made by the insured to the insurance company in
exchange for coverage is called the: a) Premium b) Deductible c)
Coverage limit d) Policy term Answer: a) Premium
1068. Which type of insurance provides coverage for damages to the
insured's own property? a) Liability insurance b) Health insurance c)
Property insurance d) Life insurance Answer: c) Property insurance
1069. Which type of insurance provides coverage for medical expenses
and treatment costs? a) Liability insurance b) Health insurance c)
Property insurance d) Life insurance Answer: b) Health insurance
1070. Which type of insurance provides coverage for legal liabilities
arising from injuries to others or damage to their property? a) Liability
insurance b) Health insurance c) Property insurance d) Life insurance
Answer: a) Liability insurance
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1071. Which type of insurance provides coverage for the insured's life
and pays a benefit to the beneficiaries upon the insured's death? a)
Liability insurance b) Health insurance c) Property insurance d) Life
insurance Answer: d) Life insurance
1072. A policyholder purchases car insurance that covers damage to
their own vehicle in the event of an accident. This is an example of: a)
insurance Answer: c) Property insurance
1073. A person buys insurance to protect themselves from potential legal
claims arising from a customer's injury on their property. This is an
example of: a) Liability insurance b) Health insurance c) Property
insurance d) Life insurance Answer: a) Liability insurance
1074. An individual purchases insurance that provides a lump-sum
payment to their family in case of their untimely death. This is an
example of: a) Liability insurance b) Health insurance c) Property
insurance d) Life insurance Answer: d) Life insurance
1075. An insurance policy that covers a specific period, such as one year,
is known as a: a) Term policy b) Whole life policy c) Variable policy d)
Universal policy Answer: a) Term policy
1076. An insurance policy that provides coverage for the entire lifetime
of the insured is called a: a) Term policy b) Whole life policy c) Variable
policy d) Universal policy Answer: b) Whole life policy
1077. An insurance policy that allows the policyholder to invest the
premium in different investment options is known as a: a) Term policy b)
Whole life policy c) Variable policy d) Universal policy Answer: c) Variable
policy
1078. An insurance policy that offers flexibility in premium payments and
death benefits is called a: a) Term policy b) Whole life policy c) Variable
policy d) Universal policy Answer: d) Universal policy
1079. Which type of life insurance policy accumulates a cash value over
time that the policyholder can borrow against or withdraw? a) Term life
insurance b) Whole life insurance c) Universal life insurance d) Variable
life insurance Answer: b) Whole life insurance
1080. Which type of life insurance policy provides coverage for a
specified term, such as 10, 20, or 30 years? a) Term life insurance b)
Whole life insurance c) Universal life insurance d) Variable life insurance
Answer: a) Term life insurance
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1081. Which type of life insurance policy allows the policyholder to

adjust the death benefit and premium payments? a) Term life insurance
b) Whole life insurance c) Universal life insurance d) Variable life
insurance Answer: c) Universal life insurance
1082. Which type of life insurance policy allows the policyholder to invest
the cash value in various investment options? a) Term life insurance b)
Whole life insurance c) Universal life insurance d) Variable life insurance
Answer: d) Variable life insurance
1083. An insurance policyholder is involved in an accident and incurs
medical expenses. Which insurance would cover these expenses? a)
insurance Answer: b) Health insurance
1084. An insurance policyholder's property is damaged in a fire. Which
insurance would cover the damage to the property? a) Liability insurance
b) Health insurance c) Property insurance d) Life insurance Answer: c)
Property insurance
1085. An insurance policyholder is sued by a customer for injuries
sustained on their premises. Which insurance would cover the legal
costs? a) Liability insurance b) Health insurance c) Property insurance d)
Life insurance Answer: a) Liability insurance
1086. An insurance policyholder passes away, and the policy pays a lump
sum to their beneficiaries. Which insurance is this? a) Liability insurance
b) Health insurance c) Property insurance d) Life insurance Answer: d)
Life insurance
1087. Which of the following is NOT a factor that insurance premiums
are based on? a) Age of the insured b) Policy term c) Gender of the
insured d) Type of insurance policy Answer: b) Policy term
1088. An insurance policy with a higher deductible generally has: a)
Lower premiums b) Higher premiums c) No premiums d) Fixed premiums
Answer: a) Lower premiums
1089. Which of the following is a risk management technique where
individuals and businesses transfer the risk to an insurance company? a)
Risk pooling b) Risk avoidance c) Risk reduction d) Risk transfer Answer:
d) Risk transfer
1090. When an insured individual is required to pay a fixed portion of
covered medical expenses before the insurance company pays the rest, it
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is known as a: a) Deductible b) Premium c) Coverage limit d) Co-payment

Answer: d) Co-payment
1091. Which type of insurance provides coverage for damage or loss
caused by events like fire, theft, and natural disasters? a) Liability
insurance b) Health insurance c) Property insurance d) Life insurance
Answer: c) Property insurance
1092. A life insurance policy with no cash value component and provides
coverage for a specific term is known as: a) Term life insurance b) Whole
life insurance c) Universal life insurance d) Variable life insurance
Answer: a) Term life insurance
1093. Which of the following is a characteristic of whole life insurance?
a) Flexible premium payments b) Coverage for a specific term c) Cash
value accumulation d) Investment options Answer: c) Cash value
accumulation
1094. Which type of insurance covers potential legal claims arising from
professional services? a) Liability insurance b) Health insurance c)
Professional liability insurance d) Life insurance Answer: c) Professional
liability insurance
1095. A business owner purchases insurance to protect against financial
losses due to business interruption. This is an example of: a) Liability
insurance b) Health insurance c) Business interruption insurance d) Life
insurance Answer: c) Business interruption insurance
1096. An insurance policy that covers multiple assets or risks under a
single policy is known as: a) Comprehensive insurance b) Specific
insurance c) Group insurance d) Individual insurance Answer: a)
Comprehensive insurance
1097. An employer offers health insurance coverage to all its employees
as part of a group plan. This is an example of: a) Comprehensive
insurance b) Specific insurance c) Group insurance d) Individual insurance
Answer: c) Group insurance
1098. An insurance policy that covers a specific item or risk separately is
known as: a) Comprehensive insurance b) Specific insurance c) Group
insurance d) Individual insurance Answer: b) Specific insurance
1099. Which type of insurance covers potential legal claims arising from
errors, omissions, or negligence in professional services? a) Liability
insurance b) Health insurance c) Errors and omissions (E&O) insurance d)
Life insurance Answer: c) Errors and omissions (E&O) insurance
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1100. Which type of insurance provides coverage for damages caused by

accidents involving automobiles? a) Liability insurance b) Health
insurance c) Automobile insurance d) Life insurance Answer: c)
Automobile insurance
1101. A person purchases insurance to protect themselves from potential
financial losses in case of damage to their car. This is an example of: a)
Liability insurance b) Health insurance c) Automobile insurance d) Life
insurance Answer: c) Automobile insurance
1102. An insurance policy that provides coverage for damage to a
specific property or asset, such as a house, is called: a) Liability insurance
b) Health insurance c) Homeowners insurance d) Life insurance Answer:
c) Homeowners insurance
1103. An individual purchases travel insurance to cover medical expenses
and trip cancellations during a vacation. This is an example of: a) Liability
insurance b) Health insurance c) Travel insurance d) Life insurance
Answer: c) Travel insurance
1104. Which type of insurance provides coverage for damage to an
individual's personal belongings, such as furniture, clothing, and
electronics? a) Liability insurance b) Health insurance c) Property
insurance d) Renters insurance Answer: d) Renters insurance
1105. A person rents an apartment and purchases insurance to protect
their personal belongings in case of damage or theft. This is an example
of: a) Liability insurance b) Health insurance c) Property insurance d)
Renters insurance Answer: d) Renters insurance
1106. An insurance policy that covers multiple people, such as employees
of a company, under a single policy is known as: a) Comprehensive
insurance b) Specific insurance c) Group insurance d) Individual insurance
Answer: c) Group insurance
1107. An individual purchases insurance coverage for themselves and
their family members. This is an example of: a) Comprehensive insurance
b) Specific insurance c) Group insurance d) Individual insurance Answer:
d) Individual insurance
1108. A person purchases insurance to protect their business from
financial losses due to employee theft. This is an example of: a) Liability
insurance b) Health insurance c) Fidelity insurance d) Life insurance
Answer: c) Fidelity insurance
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1109. An insurance policyholder is injured in an accident and requires

medical treatment. The insured's health insurance will cover the: a)
Entire medical expenses b) Portion of medical expenses after the
deductible c) Entire medical expenses after the deductible d) Premium
payment for the insurance policy Answer: b) Portion of medical expenses
after the deductible
1110. Which type of insurance policy offers investment options and
flexible premium payments, allowing the policyholder to accumulate
cash value over time? a) Term life insurance b) Whole life insurance c)
Universal life insurance d) Variable life insurance Answer: c) Universal life
insurance
1111. Which of the following is a common feature of whole life
insurance? a) Adjustable death benefit b) No cash value accumulation c)
Fixed premium payments d) Coverage for a specified term Answer: c)
Fixed premium payments
1112. An individual purchases insurance to cover potential damages or
injuries caused to others. This is an example of: a) Liability insurance b)
Health insurance c) Property insurance d) Life insurance Answer: a)
Liability insurance
CHAPTER 23 STOCK EXCHANGE

1113. What is a stock exchange? a) A place where stocks are bought and
sold b) A government agency regulating stocks c) A bank that offers
stock investments d) A stock market research firm Answer: a) A place
where stocks are bought and sold
1114. Which of the following is NOT a function of a stock exchange? a)
Providing liquidity to investors b) Facilitating capital formation c) Setting
interest rates for loans d) Pricing securities Answer: c) Setting interest
rates for loans
1115. The first stock exchange in the world was established in: a) New
York, USA b) London, UK c) Amsterdam, Netherlands d) Tokyo, Japan
Answer: c) Amsterdam, Netherlands
1116. Which type of securities are traded on a stock exchange? a)
Government bonds b) Corporate bonds c) Stocks d) All of the above
Answer: d) All of the above
1117. The main purpose of a stock exchange is to: a) Guarantee profits
to investors b) Provide a platform for companies to raise capital c)
124
Generate revenue for the government d) Set interest rates for loans
Answer: b) Provide a platform for companies to raise capital
1118. The process of buying and selling securities on a stock exchange is
known as: a) Trading b) Lending c) Borrowing d) Investing Answer: a)
Trading
1119. Which of the following is a characteristic of a stock exchange? a)
Centralized location for trading b) Physical trading floor c) No need for
intermediaries d) All of the above Answer: d) All of the above
1120. In a stock exchange, the price of a security is determined by: a) The
company issuing the security b) Government regulations c) Market forces
of supply and demand d) The stock exchange itself Answer: c) Market
forces of supply and demand
1121. The process of issuing new securities to the public for the first time
is known as: a) IPO (Initial Public Offering) b) ETF (Exchange-Traded
Fund) c) P/E (Price-to-Earnings) Ratio d) SEC (Securities and Exchange
Commission) Answer: a) IPO (Initial Public Offering)
1122. Which of the following is a measure of the stock market's overall
performance? a) Inflation rate b) GDP growth rate c) Stock index d)
Exchange rate Answer: c) Stock index
1123. The Dow Jones Industrial Average (DJIA) is an example of: a) A
stock exchange b) A stock index c) A stock trading strategy d) A stock
market regulator Answer: b) A stock index
1124. The New York Stock Exchange (NYSE) is an example of a: a)
Regional stock exchange b) Over-the-counter market c) National stock
exchange d) Foreign stock exchange Answer: c) National stock exchange
1125. Which of the following is an example of a regional stock exchange
in the United States? a) NASDAQ b) London Stock Exchange c) Chicago
Stock Exchange d) Tokyo Stock Exchange Answer: c) Chicago Stock
Exchange
1126. NASDAQ is an example of a: a) Regional stock exchange b) Over-
the-counter market c) National stock exchange d) Foreign stock
exchange Answer: b) Over-the-counter market
1127. Which type of stock exchange operates without a physical trading
floor? a) Regional stock exchange b) Over-the-counter market c) National
stock exchange d) Foreign stock exchange Answer: b) Over-the-counter
market
125
1128. The process of buying securities in the hope of making a profit

when their prices rise is known as: a) Trading b) Investing c) Short-selling
d) Hedging Answer: b) Investing
1129. The process of selling borrowed securities in the hope of buying
them back later at a lower price is known as: a) Trading b) Investing c)
Short-selling d) Hedging Answer: c) Short-selling
1130. Which of the following statements is true about dividends? a)
Dividends are the profits earned by the stock exchange b) Dividends are a
form of interest paid by the government c) Dividends are payments made
to shareholders by a company d) Dividends are fees charged by brokers
for trading securities Answer: c) Dividends are payments made to
shareholders by a company
1131. The Securities and Exchange Commission (SEC) in the United States
is responsible for: a) Listing companies on the stock exchange b)
Regulating the stock market and protecting investors c) Setting interest
rates for loans d) Managing stock exchange transactions Answer: b)
Regulating the stock market and protecting investors
1132. Which of the following is a type of order used in stock trading
where the order remains open until it is executed or canceled? a) Market
order b) Limit order c) Stop order d) Day order Answer: a) Market order
1133. A limit order is an instruction to: a) Buy or sell a security at the
current market price b) Buy or sell a security at a specific price or better
c) Buy or sell a security on a specific date in the future d) Buy or sell a
security at the closing price of the day Answer: b) Buy or sell a security at
a specific price or better
1134. A stop order becomes a market order when: a) The stock price
reaches a specified level b) The stock price falls below a specified level c)
The stock price rises above a specified level d) The stock price reaches the
highest level of the day Answer: a) The stock price reaches a specified
level
1135. A day order is an instruction to: a) Buy or sell a security at the
current market price b) Buy or sell a security at a specific price or better
c) Buy or sell a security on a specific date in the future d) Buy or sell a
security during the current trading day Answer: d) Buy or sell a security
during the current trading day
1136. A stock exchange that operates in a different country than the
issuer's home country is known as a: a) Regional stock exchange b) Over-
126
the-counter market c) National stock exchange d) Foreign stock

exchange Answer: d) Foreign stock exchange
1137. The London Stock Exchange (LSE) is an example of a: a) Regional
stock exchange b) Over-the-counter market c) National stock exchange
d) Foreign stock exchange Answer: d) Foreign stock exchange
1138. Which of the following is a measure of the volatility of a stock or
the overall market? a) P/E (Price-to-Earnings) Ratio b) Beta c) Dividend
Yield d) Market Capitalization Answer: b) Beta
1139. The price-to-earnings (P/E) ratio is calculated by dividing the: a)
Stock price by the market capitalization b) Stock price by the earnings per
share c) Earnings per share by the market price d) Market capitalization
by the earnings per share Answer: b) Stock price by the earnings per
share
1140. A company's market capitalization is calculated by multiplying the:
a) Stock price by the number of outstanding shares b) Earnings per share
by the number of outstanding shares c) Stock price by the dividend yield
d) Beta by the earnings per share Answer: a) Stock price by the number
of outstanding shares
1141. Which of the following terms refers to the total value of all
outstanding shares of a publicly traded company? a) Dividend yield b)
Market capitalization c) Price-to-earnings ratio d) Beta Answer: b)
Market capitalization
1142. Which of the following statements is true about a blue-chip stock?
a) It refers to the stock of a newly established company b) It is a high-
risk, high-reward stock c) It represents the stock of a well-established,
financially stable company d) It is a small-cap stock Answer: c) It
represents the stock of a well-established, financially stable company
1143. Penny stocks are: a) Stocks that trade on foreign stock exchanges
b) Stocks that have a price of less than $1 c) Stocks issued by the
government d) Stocks of large-cap companies Answer: b) Stocks that
have a price of less than $1
1144. A stock exchange that operates without a physical trading floor
and uses electronic systems for trading is known as a(n): a) Over-the-
counter market b) Regional stock exchange c) Auction market d) Open
outcry market Answer: a) Over-the-counter market
1145. The National Association of Securities Dealers Automated
Quotations (NASDAQ) is an example of a(n): a) Over-the-counter market
127
b) Regional stock exchange c) Auction market d) Open outcry market

Answer: a) Over-the-counter market
1146. Which of the following is a characteristic of an open outcry
market? a) Trading takes place through electronic systems b) Trading
takes place on a physical trading floor c) Trading is conducted over the
phone d) Trading is limited to specific hours Answer: b) Trading takes
place on a physical trading floor
1147. Which of the following is a characteristic of an auction market? a)
Trading takes place through electronic systems b) Trading takes place on
a physical trading floor c) Trading is conducted over the phone d) Trading
is limited to specific hours Answer: b) Trading takes place on a physical
trading floor
1148. Which of the following is a characteristic of an electronic market?
a) Trading takes place through electronic systems b) Trading takes place
on a physical trading floor c) Trading is conducted over the phone d)
Trading is limited to specific hours Answer: a) Trading takes place
through electronic systems
1149. Which of the following is a measure of a stock's volatility
compared to the overall market? a) P/E (Price-to-Earnings) Ratio b) Beta
c) Dividend Yield d) Market Capitalization Answer: b) Beta
CHAPTER 24 E-COMMERCE
1150. What does E-Commerce stand for? a) Electronic Communication b)
Electronic Commerce c) Efficient Commerce d) Electronic Connection
Answer: b) Electronic Commerce
1151. Which of the following is NOT a primary type of E-Commerce? a)
Business-to-Business (B2B) b) Business-to-Consumer (B2C) c) Consumer-
to-Consumer (C2C) d) Consumer-to-Business (C2B) Answer: d) Consumer-
to-Business (C2B)
1152. An online store that sells products directly to individual customers
is an example of: a) B2B E-Commerce b) B2C E-Commerce c) C2C E-
Commerce d) C2B E-Commerce Answer: b) B2C E-Commerce
1153. Which of the following is an example of C2C E-Commerce? a)
Amazon b) eBay c) Alibaba d) Walmart Answer: b) eBay
1154. Which type of E-Commerce involves the exchange of products and
services between businesses? a) B2B E-Commerce b) B2C E-Commerce c)
C2C E-Commerce d) C2B E-Commerce Answer: a) B2B E-Commerce
128
1155. Online auction websites, where individuals can buy and sell
products, fall under which category of E-Commerce? a) B2B E-Commerce
b) B2C E-Commerce c) C2C E-Commerce d) C2B E-Commerce Answer: c)
C2C E-Commerce
1156. Which of the following is an example of C2B E-Commerce? a) Etsy
b) Freelance platforms like Upwork c) Walmart's online store d) Alibaba
Answer: b) Freelance platforms like Upwork
1157. Which type of E-Commerce involves the use of the internet and
mobile technologies to enable online transactions? a) Brick-and-mortar
retail b) M-Commerce c) Social Commerce d) Omni-Channel Commerce
Answer: b) M-Commerce
1158. Which of the following is an advantage of E-Commerce for
businesses? a) Limited market reach b) Higher operational costs c) 24/7
availability d) Decreased customer reach Answer: c) 24/7 availability
1159. The process of marketing and selling products through social
media platforms is known as: a) Brick-and-mortar retail b) M-Commerce
c) Social Commerce d) Omni-Channel Commerce Answer: c) Social
Commerce
1160. Which of the following is a challenge of E-Commerce for
businesses? a) Lower customer reach b) Higher setup costs c) Limited
global market d) Difficulty in tracking customer behavior Answer: b)
Higher setup costs
1161. Which type of E-Commerce platform allows customers to buy
products from multiple channels such as online, mobile, and physical
stores? a) Brick-and-mortar retail b) M-Commerce c) Social Commerce d)
Omni-Channel Commerce Answer: d) Omni-Channel Commerce
1162. Which of the following is a benefit of E-Commerce for consumers?
a) Limited product selection b) Higher prices c) Convenience of shopping
from home d) Lack of product information Answer: c) Convenience of
shopping from home
1163. The process of selling products online using an existing physical
retail store is an example of: a) Brick-and-mortar retail b) M-Commerce
c) Social Commerce d) Omni-Channel Commerce Answer: a) Brick-and-
mortar retail
1164. Which type of E-Commerce platform allows customers to make
purchases using their smartphones and other mobile devices? a) Brick-
129
and-mortar retail b) M-Commerce c) Social Commerce d) Omni-Channel

Commerce Answer: b) M-Commerce
1165. What is the primary payment method used in most E-Commerce
transactions? a) Cash on delivery b) Credit card c) Bank transfer d) Barter
system Answer: b) Credit card
1166. Which of the following is a security concern for E-Commerce
websites? a) Limited product selection b) High shipping costs c) Data
breaches and cyber attacks d) Lack of customer support Answer: c) Data
breaches and cyber attacks
1167. Which type of E-Commerce platform allows customers to interact
with and experience products in a physical store before purchasing them
online? a) Brick-and-mortar retail b) M-Commerce c) Social Commerce d)
Omni-Channel Commerce Answer: d) Omni-Channel Commerce
1168. The process of selling products and services directly through social
media platforms is known as: a) Brick-and-mortar retail b) M-Commerce
c) Social Commerce d) Omni-Channel Commerce Answer: c) Social
Commerce
1169. Which of the following is a disadvantage of E-Commerce for
consumers? a) Limited product selection b) Inability to compare prices c)
Lack of product information d) Difficulty in finding customer reviews
Answer: a) Limited product selection
1170. The process of selling products on multiple online platforms and
marketplaces is known as: a) Brick-and-mortar retail b) M-Commerce c)
Social Commerce d) Multi-Channel Commerce Answer: d) Multi-Channel
Commerce
1171. Which of the following is a benefit of E-Commerce for businesses?
a) Limited market reach b) Higher operational costs c) Increased
customer reach d) Limited sales potential Answer: c) Increased customer
reach
products directly through social media platforms? a) Brick-and-mortar
Answer: c) Social Commerce
1173. The process of combining online and offline shopping experiences
to provide a seamless customer journey is known as: a) Brick-and-mortar
Answer: d) Omni-Channel Commerce
130
1174. Which of the following is a challenge of E-Commerce for

consumers? a) Limited product information b) Higher prices c) Inability to
shop from home d) Limited payment options Answer: a) Limited product
information
1175. The process of selling products and services through multiple
channels, including online, offline, and mobile, is known as: a) Brick-and-
mortar retail b) M-Commerce c) Social Commerce d) Omni-Channel
Commerce Answer: d) Omni-Channel Commerce
1176. Which of the following is a benefit of E-Commerce for businesses?
a) Decreased customer reach b) Lower operational costs c) Limited
market potential d) Lack of competition Answer: b) Lower operational
costs
1177. The process of selling products through physical retail stores is
known as: a) Brick-and-mortar retail b) M-Commerce c) Social Commerce
d) Omni-Channel Commerce Answer: a) Brick-and-mortar retail
1178. Which type of E-Commerce platform allows customers to make
purchases through social media platforms? a) Brick-and-mortar retail b)
M-Commerce c) Social Commerce d) Omni-Channel Commerce Answer: c)
Social Commerce
1179. Which of the following is a security concern for E-Commerce
websites? a) Limited payment options b) High shipping costs c) Lack of
customer support d) Data breaches and cyber attacks Answer: d) Data
breaches and cyber attacks
1180. The process of selling products through mobile devices, such as
smartphones and tablets, is known as: a) Brick-and-mortar retail b) M-
Commerce c) Social Commerce d) Omni-Channel Commerce Answer: b)
M-Commerce
1181. Which of the following is a benefit of E-Commerce for consumers?
a) Inability to compare prices b) Convenience of shopping from home c)
Limited product selection d) Lack of product information Answer: b)
Convenience of shopping from home
1182. The process of buying products and services from online stores
using a computer or mobile device is known as: a) Brick-and-mortar retail
b) M-Commerce c) Social Commerce d) Online Shopping Answer: d)
Online Shopping
products from multiple online stores through a single website? a) Brick-
131
and-mortar retail b) M-Commerce c) Social Commerce d) Online

Marketplace Answer: d) Online Marketplace
1184. The process of buying and selling products and services over the
internet is known as: a) Brick-and-mortar retail b) M-Commerce c) Social
Commerce d) E-Commerce Answer: d) E-Commerce
businesses? a) Limited customer reach b) Higher setup costs c) Global
market potential d) Decreased competition Answer: c) Global market
potential
1186. Which type of E-Commerce platform allows businesses to buy
products and services from multiple suppliers online? a) Business-to-
Business (B2B) E-Commerce b) Business-to-Consumer (B2C) E-Commerce
c) Consumer-to-Consumer (C2C) E-Commerce d) Consumer-to-Business
(C2B) E-Commerce Answer: a) Business-to-Business (B2B) E-Commerce
1187. The process of consumers buying products and services from
businesses online is known as: a) B2B E-Commerce b) B2C E-Commerce c)
C2C E-Commerce d) C2B E-Commerce Answer: b) B2C E-Commerce
1188. Which of the following is an example of B2C E-Commerce? a) eBay
b) Alibaba c) Amazon d) Upwork Answer: c) Amazon
1189. Which type of E-Commerce involves individuals selling products
and services to other individuals through online platforms? a) Business-
to-Business (B2B) E-Commerce b) Business-to-Consumer (B2C) E-
Commerce c) Consumer-to-Consumer (C2C) E-Commerce d) Consumer-to-
Business (C2B) E-Commerce Answer: c) Consumer-to-Consumer (C2C) E-
Commerce
1190. The process of individuals selling products to businesses through
online platforms is known as: a) B2B E-Commerce b) B2C E-Commerce c)
C2C E-Commerce d) C2B E-Commerce Answer: d) C2B E-Commerce
1191. Which type of E-Commerce platform allows individuals to offer
their products and services to businesses for purchase online? a)
Business-to-Business (B2B) E-Commerce b) Business-to-Consumer (B2C)
E-Commerce c) Consumer-to-Consumer (C2C) E-Commerce d) Consumer-
to-Business (C2B) E-Commerce Answer: d) Consumer-to-Business (C2B) E-
Commerce
1192. The process of buying and selling products and services between
businesses through online platforms is known as: a) B2B E-Commerce b)
132
B2C E-Commerce c) C2C E-Commerce d) C2B E-Commerce Answer: a) B2B

E-Commerce
1193. Which type of E-Commerce platform allows businesses to buy
products and services from consumers online? a) Business-to-Business
(B2B) E-Commerce b) Business-to-Consumer (B2C) E-Commerce c)
Consumer-to-Consumer (C2C) E-Commerce d) Consumer-to-Business
(C2B) E-Commerce Answer: d) Consumer-to-Business (C2B) E-Commerce
1194. Which of the following is an example of C2B E-Commerce? a)
Amazon b) Etsy c) Upwork d) Alibaba Answer: c) Upwork
1195. The process of selling products directly to individual consumers
through an online store is an example of: a) B2B E-Commerce b) B2C E-
Commerce c) C2C E-Commerce d) C2B E-Commerce Answer: b) B2C E-
Commerce
1196. Which of the following is an example of C2C E-Commerce? a)
Amazon b) eBay c) Alibaba d) Walmart Answer: b) eBay
1197. The process of buying products and services from online stores
using a computer or mobile device is known as: a) Brick-and-mortar retail
b) M-Commerce c) Social Commerce d) Online Shopping Answer: d)
Online Shopping
1198. The process of buying and selling products and services over the
internet is known as: a) Brick-and-mortar retail b) M-Commerce c) Social
Commerce d) E-Commerce Answer: d) E-Commerce
businesses? a) Decreased customer reach b) Lower operational costs c)
Limited market potential d) Lack of competition Answer: b) Lower
operational costs
133

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PROF.

SHOAIB MIRZA JINNAH COMMERCE ACADEMY SARGODHA 0343-0707116

12.Which financial statement shows a company's revenues and expenses

22.What type of marketing communication focuses on creating a positive

31.Which of the following is an example of a fixed cost for a manufacturing

41.What type of organizational structure is characterized by a clear, top-to-

CHAPTER 2 sole proprietorship

51.A sole proprietorship is a business structure: a) Owned by multiple

61.The termination of a sole proprietorship may occur due to: a) Bankruptcy

to capital d) Ability to issue shares to the public Answer: a) Limited

92.The legal documents required to start a sole proprietorship depend on

111. In the absence of a partnership agreement, partners are entitled

partner c) Sleeping partner d) Partner by estoppel Answer: d) Partner by

Active partner b) Sleeping partner c) Nominal partner d) Partner by

partnership agreement allows it d) All partners give their consent

Only if the partnership agreement allows it d) Only if the firm makes a

CHAPTER 4 joint stock company

d) Only with the approval of all other shareholders Answer: c) Freely

shares to employees as part of their compensation package d) Giving

196. Which type of joint stock company can have a maximum of 50

CHAPTER 5 company stakeholders

205. Shareholders are stakeholders who: a) Own shares of the company

216. Employees are stakeholders who are concerned about: a) Dividend

225. Who among the following stakeholders may be concerned about

Employee salaries c) Product prices d) Product quality and customer

243. Shareholders may express their dissatisfaction with the company's

CHAPTER 6 share capital

shareholders d) The total value of the company's assets Answer: c) The

262. A company's share capital can be increased through: a) Share

272. The process of converting a portion of a company's profits into

283. A company's share capital can be decreased through: a) Share

share capital b) Paid-up share capital c) Nominal share capital d) Offered

CHAPTER 7 company management

304. Company management is responsible for creating and maintaining

management function? a) Planning b) Organizing c) Leading d)

measurable, actionable, relevant, timely Answer: a) Specific, measurable,

337. The process of monitoring employee performance, providing

348. The management function of __________ involves analyzing the

CHAPTER 8 company meeting

Directors Meeting d) Emergency Meeting Answer: a) Extraordinary

367. The process of formally recording the decisions, discussions, and

377. The minimum number of shareholders required to be present to

387. The process of formally recording the decisions, discussions, and

400. In a voluntary winding up, the liquidator is appointed by the: a)

CHAPTER 9 company winding up

420. In a compulsory winding up, the court-appointed liquidator is

429. In a creditors' voluntary winding up, the company's directors must

Declaration of solvency by the directors c) Petition by the creditors d)

the appointment of an official receiver as the liquidator Answer: a) It is

457. In a creditors' voluntary winding up, the company's directors must

CHAPTER 10 cooperative society

467. The primary objective of a cooperative society is to: a) Maximize

Memorandum and articles of association d) Shareholder agreements

486. In a cooperative society, the profits are usually distributed among

496. Which type of cooperative society aims to provide financial

506. Cooperative societies follow the principle of "one member, one

CHAPTER 11 business combination

514. In a business combination, the acquiring company is also known as

Statement of financial position c) Statement of changes in equity d)

the acquiree Answer: c) Ownership of a majority of the voting rights of