BUSINESS UNITS

WORKSHEET
1. Which one of the following forms of business organizations does not issue shares?
a)
b)
c)
d)

Sole proprietor
Co-operatives
Public company
Private company

2. Which one of the following has a first claim on any profits and carries a fixed rate of
dividend?
a)
b)
c)
d)

Ordinary shares
Deferred shares
Preference shares
Participating preference shares

3. Which one of the following statements does not describe how a nationalized
industry can use profits?
a)
b)
c)
d)

increase wages of employees

Increase interest payments on all its stock
Finance capital development
Decrease prices charged to consumers

4. The business of Miss S. Jones, dressmaker, is most likely to be organized as a:

a)
b)
c)
d)

Partnership
Sole trader
Private company
Co-operative

5. Which one of the following has a fixed rate of dividend but receives also an
additional payment if profits are sufficient, after payment has been made to
subordinate classes of share?
a)
b)
c)
d)

Ordinary share
Deferred share
Preference share
Participating preference share

6. Which one of the following is a characteristic of the sole trade form of business?
a)
b)
c)
d)

No assistants are employed

Only one assistant is employed
Only the owner and the owners family
The owner is responsible for raising the capital and managing the business

7. A company is obliged to pay a fixed amount of interest annually on:

a)
b)
c)
d)

preference shares
debentures
preferred ordinary shares
ordinary shares

8. Control of municipal undertakings is exercised through:

a)
b)
c)
d)

a
a
a
a

board of directors
council committee
public corporation
co-operative society

9. Which one of the following is a disadvantage of nationalization?

a) Social costs and benefits of activities are considered
b) A legal monopoly may result in high prices
c) The government has a direct means of influencing the performance of the
economy
d) Duplication of costly installations is avoided
10.The business of P. Daniel and L. Daniel Limited, grocers is most likely to be
organized as a:
a)
b)
c)
d)

Public company
Partnership
Co-operative
Private company

11.A co-operative retail society is managed by:

a)
b)
c)
d)

employees
a local authorities
an elected committee
customers

12.Which of the following is an argument against nationalization?

a)
b)
c)
d)

Competition in capital-intensive leads to a wasteful use of resources

Basic industries should operate in the national interest and not for private profit
Publicly owned monopolies prevent exploitation of consumers
Lack of competition may lead to higher prices than under private enterprise

13.A company formed primarily to exercise a controlling interest in other firms is

called:
a)
b)
c)
d)

a
a
a
a

holding company
multinational company
unit trust
subsidiary company

14.The business of the Mammoth Motor Company PLC, car manufacturers, is organized
as a:
a)
b)
c)
d)

public corporation
private company
co-operative
public company

15.Which one of the following has voting rights but receives dividends only after the
claims of preference shareholders have been met?
a)
b)
c)
d)

Ordinary share
Debenture
Overdraft
Loan stock

16.Which of the following describes arguments used against nationalization?

i.
ii.
iii.
iv.
a)
b)
c)
d)

There may be broader objectives than in private enterprise

The availability of subsidies removes a stimulus t efficiency
Interest has to be paid on fixed-interest capital whether or not a profits has
been made
Size creates management problems
i. only
ii. Only
ii. And iii only
ii., iii. And iv only

17.The person responsible to the board of directors for the management of a company
is called:
a)
b)
c)
d)

chairman of the board

departmental manager
director
managing director

18.The business of A. B. Carnegie and C.D. Carnegie, Solicitors, is most likely to be

organized as a:
a)
b)
c)
d)

partnership
private company
public corporation
co-operative

19.Which one of the following is not a characteristic of a sole trader?

a)
b)
c)
d)

Personal
Personal
Personal
Personal

attention to business affairs

relationship with employees
liability for business debts
ownership guarantees business growth

20.Which one of the following has voting rights but receives dividends only after all
other types of shares have been paid by a certain amount?
a)
b)
c)
d)

Ordinary share
Deferred share
Preference share
Participating preference share

21.A document inviting the public to subscribe capital to a public company is called a:
a)
b)
c)
d)

certificate of incorporation
memorandum of association
prospectus
trading certificate

22.A municipal undertaking is an organization:

a)
b)
c)
d)

owned by customers
operated by a local authority
owned by shareholders
operated by the state

23.Which of the following describes arguments used in favor of nationalization?

i.
ii.
iii.
iv.
a)
b)
c)
d)

Wasteful duplication of resources can be avoided

People who work for themselves work hardest
Overall planning of an industry is possible
Profit need not be the only consideration in decision taking
i. only
i and iii. only
ii. only
i, iii. and iv. only

24.Which one of the following is a characteristic of a public corporation?

a)
b)
c)
d)

Shareholders elect directors to manage the concern

There is an annual presentation of accounts to shareholders
Shareholders dividends are paid in proportion to type and number of share held
There are no shareholders

25.Which one of the following is an advantage of nationalization?

a)
b)
c)
d)

High prices
Immense size of the undertakings
Factors other than profits may be considered when planning the industry
Impersonal labour relations