Tag: introduction of business laws

Questions Related to introduction of business laws

Out of the following what refers to the party on whose request the credit is issued to company.

introduction of business laws business law and contract act business studies

  1. Applicant

  2. Issuer

  3. Beneficiary

  4. Issuing bank

Show answer
Correct Option: A
Explanation:

Credit issued to the company is to be requested by the applicant. Applicant is the customer for the bank applyingfor credit to be issued to him.

The Indian Mercantile law is mainly an adaptation of______.

introduction of business laws business law and contract act business studies

  1. Greek Mercantile law

  2. English Mercantile law

  3. Roman Mercantile law

  4. German Mercantile law

Show answer
Correct Option: B
Explanation:

Mercantile law or commercial law is the law that regulates commercial activities of the economy. The Indian Mercantile Law owes its origin to the English Mercantile Law as  it has a direct influence on Indian law. The dependence of Indian Law on English Law is so high that, in the absence of any provision related to the issue in question, the direct recourse is to refer to the English Mercantile Law.

Choose the correct answer from the alternatives given.
Raghav, aged 16 years, falsely representing himself to be of 19 years, enters into an agreement to sell his property to Rahu! and receives from Rahu! a sum of  20,00,000 in advance. Out of this sum Raghav buys an imported car worth 10,00,000 and spends the rest on a pleasure trip to France. After Rahul attained majority, Rahu! sues him for the conveyance of the property or, in the alternative, for the refund of 20,00,000 and damages. The agreement between Raghav and Rahul is:

introduction of business laws business law and contract act business studies

  1. Void ab initio as it is a contract with a minor

  2. Voidable at the option of Rahu!

  3. Would be valid if Raghav ratifies the agreement on attending the age of majority

  4. Valid as Raghav has sold his own property for personal use

Show answer
Correct Option: A

Principle : False imprisonment is a tort (wrong) which means the total restraint of a person's liberty without lawful justification.
Facts : A part of a public road had been closed for spectators of a boat race. 'P' wanted to enter but he was prevented by 'D' and other policemen because he had not paid the admission fee. 'P' was able to enter the enclosure by other means but was unable to go where he wanted to go but allowed him to remain where he was or to go back. 'P' remained within the enclosure and refused to leave. Subsequently, 'P' sued 'D" for false imprisonment.

introduction of business laws business law and contract act business studies

  1. It was a case of false imprisonment, but 'D' could not be made liable for it.

  2. 'D' could not be made liable for false imprisonment, as he did not totally restrict P's movements.

  3. 'D' could not be made liable for false imprisonment, as he did restrict P's movements.

  4. 'D' could not be made liable for false imprisonment, as he has not touched him.

Show answer
Correct Option: B
Explanation:

The tort of false imprisonment is constituted when there is a total restraint. It is no imprisonment if a person prevented from going to a particular direction but he his free to go any other direction. If a man is prevented from going to a particular direction but is allowed to go back there is no false imprisonment. The reasonable conclusion in the above noted question is that there was no total restraint on the P's liberty. The reasonable conclusion drawn that D could not be held liable for false imprisonment and he did not restrict P's movement. Hence option (b) is correct.

CA/CS book is prepared ______.

introduction of business laws business law and contract act business studies

  1. On the basis of Cash Book

  2. On the basis of copies of invoices

  3. Both (a) and (b)

  4. On the basis of ca/cs order

Show answer
Correct Option: B
Explanation:

CA/CS book or Sales book records all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales which are recorded in cash book, sales book is only to record credit sales. The amount entered in the sales book is on behalf of invoices supplied to purchasers.

Withdrawal of cash from bank for official use will result into _____.

introduction of business laws business law and contract act business studies

  1. Increase of assets

  2. Increase of expenses

  3. No impact on assets

  4. None of the above

Show answer
Correct Option: C
Explanation:

When a business owner withdraws cash from a company account, the value of company assets decreases because some capital reserves have been transferred from business to personal use. Although an owner draw affects the value of a company's assets, it is essentially unrelated to the part of the equation that calculates how much the business has earned through its sales and operations. Hence, This entry will have nil impact on assets since, on one hand cash A/c will increases and on the other hand bank A/c will decrease. The entry to be passed is
Cash A/c              Dr.
            To Bank A/c

Which of the following accounts will be credited, when the goods are purchased for cash?

introduction of business laws business law and contract act business studies

  1. Stock Account

  2. Cash Account

  3. Supplier's Account

  4. Work in progress Account

Show answer
Correct Option: B
Explanation:

Cash account is the account that records details of all amounts paid or received in cash in arrangements for payment by customers, an account that is settled quickly in cash, rather than one which is paid later or in several payments another name. So, cash A/c will be credited.

Mercantile law is related to the  ______ of the people of the society.

introduction of business laws business law and contract act business studies

  1. Private activities

  2. Social activities

  3. Commercial activities

  4. None of the above

Show answer
Correct Option: C
Explanation:

Mercantile law is a body of law that deals with customs and practices of local and international commercial activities. It deals with all business transactions and covers agreements, contracts, copyrights, franchising, insurance, licensing, patents, shipping and transport, trademarks.

Maintaining petty cash book is ______.

introduction of business laws business law and contract act business studies

  1. Mandatory

  2. Necessary

  3. Dependant on nature of business

  4. All of the above

Show answer
Correct Option: C
Explanation:

Petty cash book - This is used to record petty expenses like postage. cartage. printing and stationery etc in the day to day business activities.
In big organisation, it is not possible to maintain petty expenses for main cashier. In small organisation the number of petty Expenses is less so such a book can be maintained by cashier. Maintaining such a book is not compulsory.
So, maintaining petty cash book is dependent on nature of business.

Which of the following is the most important source of the Mercantile Law?

introduction of business laws business law and contract act business studies

  1. Similar law

  2. Law merchant

  3. Common law

  4. Principle of equity

Show answer
Correct Option: B
Explanation:

Lex mercatoria, often referred to as "the Law Merchant" in English, is the body of commercial law used by merchants throughout Europe during the medieval period. It evolved similar to English common law as a system of custom and best practice, which was enforced through a system of merchant courts along the main trade routes. It functioned as the international law of commerce. It is the most important source of Mercantile Law.