Assignment: Nature and purpose of business

1.Assertion (A) A person earning livelihood is the main aim of economic activities.
Reason (R) It helps people in earning their bread and butter by performing several activities.

(A) Both A and R are true. R is the correct explanation of A

(B) Both A and R are true, but R is not the correct explanation of A
(C) A is correct, but R is incorrect
(D) A is incorrect, but R is correct

2. Assertion (A) Profit earning is essential for the survival, growth and expansion of any business.
Reason (R) It is the sole objective of all business firms.

(A) Both A and R are true. R is the correct explanation of A

(B) Both A and R are true, but R is not the correct explanation of A
(C) A is correct, but R is incorrect
(D) A is incorrect, but R is correct

3. Assertion (A) Business is considered as an economic activity.

Reason (R) It involves exchange of goods and services among people in the society.

(A) Both A and R are true. R is the correct explanation of A

(B) Both A and R are true, but R is not the correct explanation of A
(C) A is correct, but R is incorrect
(D) A is incorrect, but R is correct

4. Assertion (A) Business represents exchange of Goods and Services.

Reason (R) Risk and Uncertainties are always there with any form of business.

(A) Both A and R are true. R is the correct explanation of A

(B) Both A and R are true, but R is not the correct explanation of A
(C) A is correct, but R is incorrect
(D) A is incorrect, but R is correct

5. Assertion (A) Business represents exchange of Goods and Services.

Reason (R) Risk and Uncertainties are always there with any form of business.

(A) Both A and R are true. R is the correct explanation of A

(B) Both A and R are true, but R is not the correct explanation of A
(C) A is correct, but R is incorrect
(D) A is incorrect, but R is correct

6. An Indian company deals in a type of trade in which it purchases (imports) Rubber from Thailand and sells the
same to another company of Japan. Company is earning good volume of profit from its trade.
Identify the type of trade followed by the company as discussed in the above case.

(A) Wholesale Trade

(B) Retail Trade
(C) International Trade
(D) Entrepot Trade

7. ABC is one of the largest transportation industries in India provides services for different projects including
residential, commercial office, retail, industrial, logistics, hospitality and other areas too. It’s a familiar name
among the business houses in the country because of the large dependency factor.
Which type of Industry discussed in the above case?

(A) Genetic Industry

(B) Tertiary Industry

(C) Processing Industry

(D) Assembly Industry

8. Sita is a practicing Chartered Accountant. She has her C.A. Firm at Ranchi. She deals in providing Income Tax
and GST related services to her clients against very reasonable consultancy fees. She has her own professional
coaching classes for C.A. Enrolled Students.
Identify the types of economic activities performed by Sita as referred in the above case.

(A) Business
(B) Profession
(C) Employment
(D) None of the above

9. Transfer of interest exists in the case of

(A) Profession
(B) employment
(C) business
(D) none of these

10. Which of the following does not characterize business activity?

(A) Production of goods and services
(B) Presence of risk
(C) Sale or exchange of goods and services
(D) Salary and wages

11.Which of the following cannot be classified as an objective of a business?

(A) Investment
(B) Productivity
(C) Innovation
(D) Profit earning

12. Name the two broad categories of business activities.

(A) Trade and Commerce
(B) Trade and Industry
(C) Industry and Commerce
(D) None of these

13.Which of the following not treated as Auxiliaries to Trade?

(A) Banking Industry
(B) Insurance Industry
(C) Transportation Industry
(D). Processing Industry

14.Amrut” is an NGO operating in the district of Rajkot since 2005. It deals in providing medicines and other
medical facilities to the rural, backward, and below-poverty-line people in the district. In case of need,
arrangements are made by the NGO to shift critical patients to referred hospitals. Name the type of human
activities performed by the NGO “Amrut”.
(A) Economic Activities
(B) Non-Economic Activities
(C) Spiritual Activities
(D) None of the above

15. Nutan General Store is a big businessman who deals in selling Nestle products in his locality. He purchased
products of Nestle directly from the State Distributor in bulk quantities and sold them in the market. Small
shopkeepers from different corners of the city.
Identify the type of trade followed by Nutan General Store. Also, explain its two features.

16.Dell Inc is a company involved in the manufacturing of computers and related items. It’s a very popular name
among the computer-savvy youth in India. There are different models of Desktop, Laptop, Tabs, Gaming and
Workstations manufactured and sold by the company in the Indian market. Which type of Industry is highlighted
in the above case? Explain other two type of industries.

17.Mr Sonu sold his washing machine & refrigerator on Quikr as he was shifting base to London. Is this a
business activity?

18.What provides the necessary link between producers & consumers with all those activities which are necessary
for maintaining a free flow of goods & services? Discuss all those activities.

19. Aman and Sandeep completed their studies and planned to start their own business instead of looking for job.
Aman’s father is working in Portland cement manufacturing company as supervisor. He told them that common
materials used to manufacture cement include limestone, shells, and chalk or marl combined with shale, clay,
slate, blast furnace slag, silica sand, and iron ore. He also told them that limestone is most often mined from a
quarry whichis done by Adarsh Ltd. He told them that his company is facing a problem of storing the limestone
because of shortage of space. This gave them an idea to start a ware housing business. On the basis of the given
information, answer the following questions:

a) Identify the different types of industries being discussed in above case.

b) Specify the category of type of industries to which the industries identified in part(a)

20.Sankalp is a successful entrepreneur dealing in Automobile sector especially with Two Wheelers at
Ahmedabad. He has been constantly earning good profit from his business and investing surplus towards
expansion of his business. All the latest Two-Wheeler models are available at his showroom. His marketing and
sales team are managed to create new customers from time to time. His unique style of business management has
brought him success.

1)Name the type of Business activity in which Sankalp is involved?

(A) Tertiary industries
(B) Secondary industries
(C) Trade
(D) Auxiliaries to trade

2 Name the type of economic activities performs by Sankalp.

(A) Business
(B) Profession
(C) Employment
(D) Religious Movement

3 Which type of objectives followed by the entrepreneur?

(A) Economic Objective
(B) Social Objective
(C) Organizational Objective
(D) Management Objective

4 Which of the following points are involved in the objective identified in part (b) above?
(A) Profit Earning
(B) Creating Customers
(C) Innovation
(D) All of the above

21.“Overemphasis on objective to earn profit may exploit the business”. What does a business should do to enable
itself to bring the balance?

22. ‘Kodak Pics’ is an advertisement agency initiated by Rahul, Sushmita & Prema. They have called a meeting to
discuss the below given points
(i) Increase the profit margin by 20% in july.
(ii) Aiming bigger share in the market.
(ii) Making use of better lenses & improved techniques.
(iv) Making best use of cameramen, finance etc. employed by the business
(v) Improve efficiency in functioning of business.
(a) Which aspects of business objectives are being referred to here?
(b) Also develop each point to be discussed in the meeting by classifying the objective.

23. Different situations in different business are being elaborated below:

(i) Raghunath Gorkha had a match stick factory in Nepal which got destructed by the recent earthquake.
(ii) Mr Arya, a senior manager in a telecom company shared confidential information about the company with a
competitor which led to huge losses for the company.
(iii) Vodafone Co. was charged with evasion of tax and asked to pay fine in cross which would lead to heavy
losses for the company.
(iv) Type writers becoming redundant.
(a) Which characteristic of business is being referred to in all the above cases?
(b) How can you classify the different cases based on this characteristic?

24. Dr. Sanvi is an orthopedic surgeon in AIIMS Hospital and Dr Maruti, her friend is a pediatrician who has set
his own clinic. Dr Maruti’s wife, Ms. Aditi operates her Cosmetic store. Compare & differentiate the nature of
tasks undertaken by them.

25. Zainab, Shelly &Ravina are friends. They have just completed a fashion designing course. They wish to start a
business together. They have Rs.10,00,000 savings put together and are planning to take a bank loan of additional
Rs.10 lakhs. They have found a prime location in Karol Bagh where they can set their boutique. They decide that
they will initially not take very big orders. Based on this information, quote the lines associated with factors
affecting the decision to start a business and classify them.

26. Picture based question:

Identify the name of above Financial instument used in ancient times. Write a brief note on above.