Laws and Ethics Solved MCQs

mcqmate.com/topic/849/laws-and-ethics-set-1

1. The term 'sub-agent' in the business of agency is defined

as a person employed by, and acting under the control of
the

A. Principal

B. Original agent

C. Lawyer

D. Third person

2. The first endorsement of an instrument can be made by the

A. Banker

B. Payee

C. Holder in due course

D. Agent

3. Which of the following is not the mode of dissolution of a

firm under voluntary dissolution?

A. Dissolution by agreement

B. Dissolution on the happenings of certain contingencies

C. Dissolution on becoming a partner of unsound mind

D. Compulsory dissolution

4. White wash or color wash should be carried out at least

once in every period of

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4. White wash or color wash should be carried out at least
once in every period of

A. 14 months

B. 24 months

C. 48 months

D. 60 months

5. The term 'family' as defined in ESI Act, 1948 does not

include

A. a spouse

B. a minor adopted child

C. a dependent unmarried daughter

D. an independent married sister

6. Which one of the following amounts to safety measure?

A. Artificial humidification

B. Ventilation

C. Fencing of machinery

D. First aid appliances

7. If a company does not have a common seal, the share

certificate shall be signed by

A. Two Directors

B. One Director and Company Secretary

C. Two Directors and Company Secretary

D. Company Secretary

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8. In case of e-voting, notice shall be sent as attachment in

A. PDF file

B. Word file

C. Excel file

D. Access file

9. A Director may be elected by small shareholders upon a

notice by

A. not less than 1000 small shareholders.

B. one tenth of the total number of shareholders.

C. not less than 1000 small shareholders or one tenth of such shareholders,
whichever is lower.

D. one tenth of 1000 small shareholders.

10. Meta ethics deal with the nature of ___________ .

A. external influences

B. moral judgement

C. material facts

D. animal rights

11. The breach of contract may be-

A. Actual

B. Anticipatory

C. None of the above

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11. The breach of contract may be-

D. Either of (a) and (b)

12. Which one of the following is not the feature of “agreement

to sale”?

A. It is an executor contract

B. Sales takes place for existing and specific goods

C. The seller can sue for damages only in case of breach by the buyer

D. It gives a right to the buyer against the seller to sue for damages

13. Which one of the following is not the element of draft?

A. It cannot be drawn on private individual

B. It cannot be countermanded easily

C. It is open to the person to stop payment

D. The bank undertakes the liability which it is bound to discharge in whose favor
the

14. Who may negotiate?

A. Drawer

B. Payee

C. All of the joint makers

D. Any of (a) to (c)

15. The Information Memorandum shall be deemed to be a

______________.

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15. The Information Memorandum shall be deemed to be a
______________.

A. Prospectus

B. Articles

C. Memorandum

D. None of the above.

16. The Regional Director shall communicate the confirmation

of shifting of registered office within __________ days of
receipt of the application.

A. 15

B. 30

C. 45

D. 90

17. The private placement shall be made, not more than

___________ persons in aggregate in a financial year.

A. 50

B. 100

C. 200

D. 400

18. If the shareholders not less than _____ of the issued shares
of class did not consent to the variation or vote in favor of
the special resolution for the variation, such shareholders
may apply to the Tribunal to have the variation cancelled.

A. 10%

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18. If the shareholders not less than _____ of the issued shares
of class did not consent to the variation or vote in favor of
the special resolution for the variation, such shareholders
may apply to the Tribunal to have the variation cancelled.

B. 15%

C. 25%

D. None of the above

19. The company shall not issue sweat equity shares for more
than _______________ of the existing paid up share capital
in a year.

A. 10%

B. 15%

C. 25%

D. None of the above

20. Which one of the following is not the discharge by

operation of law?

A. By merger

B. By insolvency

C. By breach of contract

D. By the unauthorized alteration of items of a written document.

21. Which one of the following is not the feature of the Contract
of Guarantee?

A. There are two parties in this contract.

B. The liability of surety is secondary.

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21. Which one of the following is not the feature of the Contract
of Guarantee?

C. There is an existing debt for which the surety gives guarantee to the creditor on
behalf of the principal debtor.

D. The surety gives contract at the request of the principal debtor.

22. Section 2(7) of the Sale of Goods Act, 1930 the term
'Goods' does not include __________.

A. Stock and share

B. Growing Crops

C. Grass

D. Neither (A) nor (B) nor (C)

23. No female child shall be allowed to work in any factory

except between ________________.

A. 8 AM and 7 PM

B. 6 PM and 6 AM

C. 6 AM and 7 PM

D. 10 PM and 5 AM

24. The Bonus shares may be issued out of the

_____________________

A. Free Reserves

B. Securities Premium Account

C. Capital Redemption Reserve Account

D. Any of the above

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25. An instrument of the proxy shall be deposited with the
registered office of the company before ____________
hours of the conduct of the meeting.

A. 7 hours

B. 21 hours

C. 48 hours

D. 60 hours

26. Theminimum number of designated partners in an LLP

shall ____________________

A. 1

B. 2

C. 7

D. 15

27. At every AGM, not less than ________ of the total number
of directors shall retire by rotation.

A. One third

B. Two third

C. Three fourths

D. Half

28. The minimum number of directors for a public company is

_______________

A. 1

B. 2

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28. The minimum number of directors for a public company is
_______________

C. 3

D. 7

29. This is not one of the 7 principles of public life.

A. Integrity

B. Honesty

C. Content

D. Accountability

30. Which of the following is an invitation for offer?

A. A tender to supply goods at a certain time

B. A request for a loan

C. Bids in an auction sale

D. A catalogue of goods for sale

31. Where seller delivers to the buyer a quantity of goods less

than the contracted to sell, the buyer

A. may reject them

B. should not reject them as more quantity might be supplied.

C. may resell them

D. give less price for them.

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32. A person who has ultimate control over the affairs of the
factory under Factories Act, 1948 is called as:

A. Occupier

B. Manager

C. Chairman

D. Managing Director

33. A bearer instrument is negotiated by

A. delivery only

B. delivery and endorsement

C. endorsement

D. stamping and attestation

34. X, Y and Z are partners in a firm. X, without the authority of

Y and Z buys certain shares in his name out of partnership
money. These shares will constitute

A. Partnership liability

B. Partnership Property

C. Partnership networth

D. Partnership Capital

35. Business ethics calls for avoidance of

A. Competition

B. Publicity

C. Monopoly

D. Self-interest

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36. Business ethics has a ____ application.

A. Universal

B. Natural

C. Practical

D. Physical

37. A contract is a combination of

A. agreement and free consent

B. agreement and consideration

C. agreement and enforceability

D. agreement and competence of parties

38. A proper foundation of ethics requires a standard of

_______ to which all goals and actions can be compared to.

A. value

B. living

C. life

D. speech

39. The provisions regarding maximum number of members in

a partnership are given in

A. The Partnership Act

B. The Companies Act

C. The Societies Registration Act

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39. The provisions regarding maximum number of members in
a partnership are given in

D. The Co-operative Societies Act

40. X and Y agree to divide the profits of a business in equal

shares but the loss if any is to be borne by X only. The
partnership agreement is

A. void

B. voidable

C. lawful

D. illegal

41. First aid boxes or cupboard equipped with prescribed

contents and not less than one in number must be provided
and maintained in every factory so as to be accessible
during all working hours for every

A. 200 workers for any time

B. 150 workers for any time

C. 500 workers for any time

D. 30 workers for any time

42. XYZ Ltd., to which the Payment of Wages Act, 1936 is

applicable, fixes the wages period of 36 days. You as a Cost
and Management Accountant of the Company, how would
youadvice the company.

A. There is no problem in the above act of the Company

B. As per Section 4(2) of the Act, no wage period can exceed one month. So the
company would be advised accordingly.

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42. XYZ Ltd., to which the Payment of Wages Act, 1936 is
applicable, fixes the wages period of 36 days. You as a Cost
and Management Accountant of the Company, how would
youadvice the company.

C. The wages period can be more than 30 days subject to approval of appropriate
Government

D. The company should take permission of Inspector of the factory.

43. When the day on which a promissory note or bill of

exchange is at maturity is a public holiday, the instrument
shall be deemed to be due on the

A. Preceding day

B. Next preceding business day

C. Same day of next week

D. 3rd day following the day holiday

44. In case of an employee who has not completed 15 years of

age at the beginning of the Accounting year, the minimum
bonus will be

A. `100 or 8.33% of salary or wages whichever is higher.

B. ` 60 or 8.33% of salary or wages whichever is higher.

C. ` 60 or 8.33% of salary or wages whichever is lower.

D. 8.33% of salary or wages.

45. Every LLP firm shall have at least _____________

designated partners who are individuals.

A. two

B. three

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45. Every LLP firm shall have at least _____________
designated partners who are individuals.

C. four

D. Five

46. K owns a residential flat in Chennai. He is entitled to quiet

possession and enjoyment of his property. This is called –

A. Rights in Personam

B. Rights in Rem

C. Constitutional Right

D. There is no right at all

47. X sells the goodwill of his retail store to Y for `5 lacs and
promises not to carry on the same business for ever and
anywhere in India. This agreement is:

A. Valid

B. Void

C. Voidable

D. Illegal

48. In a Contract of Guarantee there is/are:

A. One contract

B. Two contracts

C. Three contracts

D. Four contracts

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49. Right of Stoppage in transit can be exercised by the Unpaid
Seller, where the Buyer:

A. is solvent

B. becomes insolvent

C. acts fraudulently

D. acts smartly

50. "Nemo dat quad non habet", means:

A. no one is greater than god

B. none can give who does not himself possess

C. everyone can give everything he has

D. everyone is bound by is habit

51. According to Sec 2(n) “Occupier” of a factory means

___________________

A. The person who has established the factory

B. The person who has highest profit share in the factory

C. The person who has ultimate control over the affairs of the factory

D. The person who has ultimate control over the employees of the factory

52. A factory employs 250 workers. All the workers including

workers above 60 years of age and below 15 years of age
went on strike. The employer

A. can deduct fine from all the workers

B. cannot deduct fine from workers who are under the age of 15

C. no fine can be imposed from workers who are 60 years and above

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52. A factory employs 250 workers. All the workers including
workers above 60 years of age and below 15 years of age
went on strike. The employer

D. cannot deduct any fine from any worker.

53. Permanent disablement benefit is paid at the rate of

______________ of wages.

A. 120%

B. 100%

C. 79%

D. 90%

54. Workers will be entitled to overtime wages if they have

worked for more than ____________.

A. Forty-eight hours in any four week

B. Forty-eight hours in any three week

C. Forty-eight hours in any two week

D. Forty-eight hours in any week

55. Appropriate Government reviews the rates of minimum

wages within:

A. 2 years

B. 4 years

C. 5 years

D. 6 years

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56. Anchal purchased a motor car from Kamal who had no title
to it. Anchal used the motor car for several months. True
owner spotted the motor car and demanded it from Anchal.
In such case

A. Anchal is bound to hand-over the motor car to true owner.

B. Anchal is not bound to return the motor car to true owner as she has paid in full
settlement to Kamal.

C. Anchal shall advise true owner to approach Kamal.

D. True owner has no right to claim either from Anchal or from Kamal.

57. Which of the following agreement is wagering agreement

under the Indian Contract Act, 1872?

A. Crossword competition involving application of skill and knowledge.

B. Contract of Insurance.

C. A promise to pay B ` 1,000 if it rains on Monday.

D. A agrees to pay B `1,000 if he marries C.

58. Under Sale of Goods Act, which of the delivery of goods is

called as delivery by attornment?

A. Actual

B. Symbolic

C. Constructive

D. Physical

59. Where the price of the goods under a contract of sale is to

be fixed by the valuation of a third party who fails to fix the
valuation, but goods are supplied to the buyer, under
section 10 of the Sale of Goods Act, 1930, the buyer is

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59. Where the price of the goods under a contract of sale is to
be fixed by the valuation of a third party who fails to fix the
valuation, but goods are supplied to the buyer, under
section 10 of the Sale of Goods Act, 1930, the buyer is

A. liable to pay the reasonable price of the goods.

B. liable to pay the minimum price of the goods.

C. not liable to pay any price until fixed by the valuer.

D. liable to pay the maximum retail price.

60. Under Factories Act, 1948, where work of the same kind is
carried out by two or more sets of workers during different
period of the day, each of such period is called a

A. Relay

B. Shift

C. Recess

D. Overtime

61. Under Payment of Wages Act, 1936, deduction on account

of payment to cooperative societies shall not be more than

A. 50% of wages

B. 75% of wages

C. 90% of wages

D. 60% of wages

62. Under Employee‘s State Insurance Act, in order to qualify

for sickness benefit, the insured worker is required to
contribute for

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62. Under Employee‘s State Insurance Act, in order to qualify
for sickness benefit, the insured worker is required to
contribute for

A. 70 days in a contribution period of 6 months.

B. 78 days in a contribution period of 3 months.

C. 91 days in a contribution period of 3 months.

D. 78 days in a contribution period of 6 months.

63. Ankit purchased goods worth ` 20,000 from Anuj. In lieu of

cash payment, Ankit accepted a bill of exchange of ` 20,000
to be payable after three months. This is an example of

A. Accommodation Bill

B. Fictitious Bill

C. Genuine Bill

D. Documentary Bill

64. Under the Negotiable Instruments Act, 1881, whether

acceptance of a bill of exchange in the following situation
shall be treated as qualified acceptance where the acceptor

A. undertakes to pay only `10,000 for a bill drawn for `15,000.

B. declares the payment to be independent of any other event.

C. writes, ‘Accepted, payable at ABC Bank’.

D. writes, ‘Accepted, payable at Delhi’.

65. When a partnership firm is continued even after the expiry

of fixed term is called

A. Perpetual partnership

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65. When a partnership firm is continued even after the expiry
of fixed term is called

B. Fixed partnership

C. Contract partnership

D. Partnership at will

66. A person who is not a partner of a Partnership Firm, but he

may liable for firm’s debt as if he was a Partner. Such a
person is called

A. Nominal Partner

B. Sleeping Partner

C. Partner by estoppels

D. Partner for profit only

67. Under Companies (Registration Offices and Fees) Rules,

2014, every foreign company shall file with the Registrar of
Companies along with the financial statement in form —
————— which belong to the list of all the places of
business established by the foreign company in India.

A. FC 4

B. FC 2

C. FC 1

D. FC 3

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68. Business ethics are needed to create a faith about the
quality, quantity, price etc. of products. The customers
have more trust and faith in the businessmen who follow
ethical rules. They feel that such businessmen would not
cheat them. Which one of the following is appropriate for
it?

A. Safeguarding consumers right

B. Improve customers confidence

C. Survival of business

D. Consumer movement

69. Holders of public office should not place themselves under

any financial or other obligation to outside individuals or
organizations that might influence them in the performance
or their official duties. This principle of public life is called

A. Selflessness

B. Honesty

C. Objectivity

D. Integrity

70. There are many types of ethical conflicts in the

A. Business place

B. Office place

C. Work place

D. Public place

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71. Which one of the following is said to be ―unethical
behavior?

A. Encouraging communication

B. Adulteration

C. Employees awareness

D. Objectivity

72. A contract creates

A. jus in personam.

B. jus in rem.

C. only rights and no obligations.

D. only obligations and no rights.

73. Provisions of EPF &Misc Provisions Act 1952 are

applicable to Cinema/Theatre employing

A. 10 or more persons.

B. 20 or more persons.

C. 5 or more persons.

D. 15 or more persons.

74. In the absence of Partnership agreement, the Partner has

A. right to avail interest on advances paid to partnership firm.

B. right to avail interest on advances paid to partnership firm provided there is

profit.

C. no right to avail interest on advances.

D. right to avail interest on advances even after dissolution of the firm.

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75. A person who is employed by the seller to raise the price
by fictitious bids. Such person is known as

A. Puffer

B. By bidder

C. Decoy Ducks

D. All of the above

76. In case of banker's refusal to honour the cheque inspite of

sufficient funds in customer's account, the banker is

A. liable to compensate the drawer.

B. not liable to compensate the drawer .

C. criminally liable under section 138.

D. liable to be delisted.

77. Dependants benefit is paid at the rate of

A. 60% of wages in the form of monthly payment.

B. 75% of wages in the form of monthly payment.

C. 80% of wages in the form of monthly payment.

D. 90% of wages in the form of monthly payment.

78. Board of Directors of every listed Company shall constitute

an Audit Committee which shall consists of a minimum of

A. 2 Directors

B. 3 Directors

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78. Board of Directors of every listed Company shall constitute
an Audit Committee which shall consists of a minimum of

C. 4 Directors

D. 5 Directors

79. The maximum limit of bonus payable to an employee is

fixed by way of percentage of salary or wages earned by
the employee during the accounting year, the percentage
is:

A. 10%

B. 15%

C. 20%

D. 25%

80. Business Ethics also called as Corporate Ethics is a form

of

A. Positive Ethics

B. Applied Ethics

C. Physical Ethics

D. Practical Ethics

81. An agreement which is enforceable at the option of one or

more parties thereto but not at the option of other or others
is called

A. Void contract.

B. Voidable contract.

C. Void agreement.

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81. An agreement which is enforceable at the option of one or
more parties thereto but not at the option of other or others
is called

D. Unenforceable contract.

82. Which of the following agency is irrevocable under The

Indian Contract Act, 1872?

A. Agency for fixed period

B. Agency for single transaction

C. Agency coupled with interest

D. Continuing agency

83. A sort of tacit understanding/agreement among the

intending bidders to stifle competition by not bidding
against each other in an auction sale is called as

A. Damping

B. Knock-out agreement

C. Puffers

D. By-bidders

84. When an instrument is drawn conditionally or for a special

purpose as a collateral security and not for the purpose of
transferring property therein, it is called

A. Ambiguous

B. Inchoate

C. Escrow

D. Inland

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85. Which Committee is constituted by the occupier to promote
cooperation between the workers and management in
maintaining proper safety and health at workplace?

A. Safety Committee

B. Health Committee

C. Management Workers Consultative Committee

D. Maintenance Committee

86. Under Payment of Bonus Act, 1965, in disputed cases,

bonus must be paid

A. Within 8 months from the close of the accounting year.

B. Within 1 month from the date on which the award becomes enforceable.

C. Within 2 months from the date on which the award becomes enforceable.

D. Within 6 months from the date of closing of the accounting year.

87. Businessmen or industrialists take initiative to form new

companies. Their main function is to manage the company
after its promotion, they are known as

A. Particular Promoters

B. Occasional Promoters

C. Professional Promoters

D. General Promoters

88. The study of ethics can be divided into four operational

areas namely meta ethics, normative ethics, descriptive
ethics and

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88. The study of ethics can be divided into four operational
areas namely meta ethics, normative ethics, descriptive
ethics and

A. Positive ethics

B. Physical ethics

C. Applied ethics

D. Natural ethics

89. In social agreements usual presumption is

A. that parties do not intend to create social relations.

B. that parties intend to perform them.

C. that parties do not intend to make legal and social relations.

D. that the parties do not intend to create legal relations between them.

90. In a sale of goods, the doctrine of caveat emptor will not

apply when there is

A. usage of trade

B. consent by fraud

C. buyers’ error of judgment

D. Merchantable Quality

91. A bill of exchange, that is drawn accepted or endorsed

without consideration is called

A. Accommodation bill

B. Promissory note

C. Trade bill

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91. A bill of exchange, that is drawn accepted or endorsed
without consideration is called

D. Bearer instrument

92. Under Industrial Disputes Act, Appropriate Government

may require to constitute a workman committee on any day
in the preceding 12 months, where an industrial
establishment employs

A. 250 or more workers

B. 100 or more workers

C. 500 or more workers

D. 200 or more workers

93. Employee’s State Insurance Act, 1948 is applicable to all

A. factories including factories belonging to Government and seasonal factories.

B. factories excluding seasonal factories.

C. factories including factories belonging to Government and seasonal but

excluding Silk factory.

D. factories including factories belonging to Government but excluding seasonal

factories.

94. A partner must give a public notice of his retirement from

the firm in order absolve himself from the liability for the
acts of the other partners done after his retirement is
known as

A. Dormant partner

B. Ostensible partner

C. Nominal partner

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94. A partner must give a public notice of his retirement from
the firm in order absolve himself from the liability for the
acts of the other partners done after his retirement is
known as

D. Partner by estoppel

95. A prospectus which does not have complete particulars on

the price of securities offered and the quantum of
securities offered by the company is known as

A. Statement in lieu of prospectus

B. Red-herring prospectus

C. Deemed prospectus

D. Shelf prospectus

96. The crucial step in understanding business ethics is

A. Establishing codes of ethics

B. Learning to recognize ethical issues

C. Having efficient operations

D. Implementing strategic plan

97. Which of the following reason is applicable for unethical

business practices?

A. Workplace Surveillance

B. Profit making by some of the big companies

C. Success of the company

D. Administrative corruption

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98. A party who does not suffer any loss in case of breach of
contract is entitled to

A. Statutory damages

B. Liquidated damages

C. Exemplary damages

D. Nominal damages

99. If part of contract is illegal, then the whole contract will be

A. Voidable

B. Void

C. Legal

D. Illegal

100. In which of the following cases, the claim of Quantum

Meruitarise

A. When there is no breach of contract

B. When a contract is discovered to be valid

C. Where something has been done non gratuitously

D. Where the contract is divisible

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