P-6: Laws and Ethics - Bit Questions

(I) Choose the correct answer from the given alternatives:

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
(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

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.

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 P-6: Laws and Ethics - Bit Questions

(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
(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
draft is issued

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 ______________.

(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

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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.
(a) 10%
(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.
(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

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

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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
(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.

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

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35. Business ethics calls for avoidance of

(a) Competition
(b) Publicity
(c) Monopoly
(d) Self-interest

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
(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.
(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.

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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
(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

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

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(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
(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

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
(a) liable to pay the reasonable price of the goods.
(b) liable to pay the minimum price of the goods.

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(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
(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
(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

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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

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

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
(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.
(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

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(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

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
(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
(d) Bearer instrument

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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
(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

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

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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

101. Amit tells Bharat in the presence of Chetan that Amit is agent of Chetan. Chetan
maintain silence instead of denying it. Later, if Amit sells Chetan's goods to Bharat,
Chetan cannot dispute Bharat's title to the goods. This is example of
(a) Sale by official receiver
(b) Sale by a finder of goods
(c) Sale by estoppel
(d) Execution of Sale

102. An act to dissuade the intending buyer from bidding or from raising the price by
pointing out defects in the goods or by doing some other acts which prevent persons
from forming a fair estimate of the price of the goods is known as
(a) Knock out agreement
(b) Damping
(c) Puffers
(d) None of the above

103. If a minor draws, endorses, delivers or negotiates an instrument, such instrument binds
(a) all parties to the instrument including the minor
(b) only the minor and no other parties to the instrument
(c) all parties to the instrument except the minor
(d) None of the above

104. In a partnership firm, the decision can be made by rule of majority when decisions
relate to
(a) policy matters
(b) ordinary routine matters
(c) financial matters
(d) buying and selling of property

105. Power to exempt any LLP or class of LLP for audits of accounts is with
(a) Inspector
(b) Central Government
(c) Any other regulatory authority
(d) None of the above

106. Every inspector appointed under the Factories Act or Payment of Wages Act is
deemed to be a
(a) Controlling Officer
(b) Labour Welfare Officer
(c) Honorary Magistrate
(d) A Public Servant

107. No fine can be imposed on any employed person who is under the age of
(a) 10
(b) 12
(c) 15
(d) 18

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108. In case of employee covered under the ESI, the accident report shall be sent in
_______ to local office of the ESI to which the company is attached.
(a) Form No. 18
(b) Form No. 18A
(c) Form No. 25
(d) Form No. 16

109. The first case 'doctrine of frustration' as decided by the Supreme Court of India is
(a) BasantiBastralaya Vs. River Steam Navigation Co. Ltd.
(b) Raju Dhruv Dev Chand Vs. Raja Harmohinder Singh
(c) Sushila Devi Vs. Hard Singh
(d) Satyabrata Ghosh Vs. Mugneeram

110. Application for Director Identification Number (DIN) is to be made to Central Govt. in
Form
(a) DIN-1
(b) DIN-2
(c) DIN-3
(d) None of the above

111. Business ethics is based on well accepted

(a) Moral and Social Values
(b) Social Values only
(c) Moral Values only
(d) None of the above

112. Out of seven principles of public life, the principle of objectivity means
(a) holders of public office should take decisions solely in terms of the public interest.
(b) in carrying out public business including making public appointments, holders of
public office should make choices on merit.
(c) holders of public office are accountable for their decision and actions to the
public.
(d) holders of public office should be as open as possible about all the decisions and
actions that they take.

113. Who is responsible for ethical behavior?

(a) Lecturers and Supervisors
(b) The Psychologist
(c) The Participants
(d) The psychological Community

114. The three C’s of business ethics are

(a) Commitment, Contribution and Consequences
(b) Compliance, Contribution and Consequences
(c) Compliance, Customs and Contribution
(d) Codes, Compliance and Contributions

115. Cash is withdrawn by a customer of a bank from the automatic teller machine is an
example of
(a) Express Contract
(b) Void Contract
(c) Tacit Contract
(d) Illegal Contract

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116. Which of the following is not implied condition under The Sale of Goods Act, 1930?
(a) Sale by description
(b) Sale by discount price
(c) Sale by sample
(d) Quality or fitness

117. Occupier of every factory shall provide and maintain suitable room or rooms for the
use of the children under the age of six years of women workers where the number of
such women workers exceed
(a) 20
(b) 50
(c) 30
(d) 150

118. Examine as to which of the following payments form part of "salary" under the
provisions of the Payment of Bonus Act, 1965.
(a) Travelling allowance
(b) Commission on sales
(c) Dearness allowance
(d) Overtime allowance

119. Under Payment of wages Act, 1963, in any factory, in which 1200 persons are
employed, wages must be paid
(a) any time
(b) before the expiry of 10th day of the following month
(c) before the close of the month
(d) before the expiry of 7th day of the following month

120. The Employees Provident Funds Act, 1952 is applicable to every establishment
mentioned in schedule 1 and employed
(a) 10 persons or more
(b) 100 or more persons
(c) 20 or more persons
(d) 50 or more persons

121. The employer's and employee's share of contribution of ESI fund is

(a) 1.75% and 4.75% of wages respectively
(b) 4.75% and 1.75% of wages respectively
(c) 10% and 3.75% of wages respectively
(d) 11 % and 3.75% of wages respectively

122. A Formal notarial certificate attesting the dishonour of a bill or note is called
(a) Noting
(b) Protest
(c) Attestation of Dishonour
(d) Endorsement

123. Public notice is not required when there is

(a) admission of new partner
(b) retirement of any partner
(c) expulsion of any partner
(d) dissolution of the firm

124. A LLP shall file an annual return duly authenticated with the Registrar within _________
of closure of a financial year under Limited Liability Partnership Act, 2008.
(a) 30 days

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 P-6: Laws and Ethics - Bit Questions

(b) 45 days
(c) 60 days
(d) 90 days

125. The board of directors may appoint additional directors from time to time if so
authorized by
(a) Articles of Association
(b) Memorandum of Association
(c) A resolution passed at general meeting
(d) A resolution passed at board meeting

126. Business ethics are gaining importance because of

(a) smooth functioning
(b) good image
(c) the growth of consumer movement
(d) increasing profit

127. Which of the following statement is correct about business ethics?

(a) Social responsibility and business ethics are considered different concepts
(b) Making higher profits should be the main objective of a business
(c) A business may sustain only if it cares for society
(d) Companies making ethical investments may not be able to compete

128. Holders of public office should take decision solely in terms of the public interest. This
principle of public life is called
(a) Integrity
(b) Accountability
(c) Honesty
(d) Selflessness

129. To resolve the Ethical Conflict, following should not be considered.

(a) Relevant facts
(b) Alternative Course of action
(c) Arms Length
(d) Ethical issues involved

130. Which one of the following is not a quasi contract?

(a) Claim for necessaries supplied to person incapable of contracting, or on his
account
(b) Reimbursement of persons paying money by another, in payment of which he is
interested
(c) Uncertainty and futurity of the event to which it is related
(d) Responsibility of finder of goods.

131. Which one of the following is the subject matter of the contract?
(a) Existing or future goods
(b) Goods perishing before making contract
(c) Goods perishing before sale but after agreement to sell
(d) Any of the above.

132. One of the following is not a negotiable instrument. Identify the same.
(a) Share certificate
(b) Bill of Exchange
(c) Cheque
(d) Promissory note

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 P-6: Laws and Ethics - Bit Questions

133. Which one of the following is a Bill of Exchange?

(a) A banker’s draft
(b) A demand draft
(c) An order issued by a District Board Engineer on Government Treasury for payment
to or order of a certain person
(d) All the above.

134. Who can take active part in the management of the firm?
(a) Sleeping partner;
(b) Secret partner;
(c) Working partner;
(d) Nominal partner.

135. A new partner can be introduced as a partner into a firm-

(a) At the discretion of active partner;
(b) At the decision of partners authorized in this behalf;
(c) With the consent of all existing partners;
(d) None of the above.

136. Shelter rooms with suitable lunch rooms are to be provided, if more than ______
workers are employed.
(a) 100
(b) 150
(c) 500
(d) 1000

137. Gratuity is payable to an employee ______________.

(a) On his superannuation;
(b) Retirement;
(c) Retrenchment;
(d) In all the above cases.

138. Contribution of the employer to employees’ pension scheme is-

(a) 8.33%
(b) 10%
(c) 12%
(d) None of the above.

139. Who, among the following, is not the Principal Employer?

(a) Occupier of the factory;
(b) Owner of the factory;
(c) Legal representative of the owner;
(d) Legal representative of the contractor.

140. The time limit for making bonus payment is-

(a) Within a period of one month from the close of the accounting year;
(b) Within a period of three months from the close of the accounting year;
(c) Within a period of six months from the close of the accounting year;
(d) Within a period of eight months from the close of the accounting year.

141. Review of minimum wages is to be done at such interval not exceeding-

(a) 3 years
(b) 5 years
(c) 7 years
(d) 10 years

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 P-6: Laws and Ethics - Bit Questions

142. The wages of employed persons in an establishment where less than 1000 persons are
employed, shall be paid before-
(a) 7th day
(b) 10th day
(c) 15th day
(d) Second working day

143. In case of unlisted company the duplicate share certificate shall be issued within a
period of-
(a) 45 days
(b) 3 months
(c) 6 months
(d) None of the above

144. Which one of the following is not a contract?

(a) A find B’s purse and gives it to him. B promises to give him `1,000/-
(b) A promises, for no consideration, to give `10,000/-
(c) A agrees to sell a horse worth of `1,000/- for `10/-
(d) A supports B’s infant son. B promises to pay A’s expenses in so doing.

145. Find out the right of the unpaid seller from the following-
(a) A lien on the goods for the price while he is in possession of them;
(b) A right of resale as limited by the Act;
(c) In case of the insolvency of the buyer a right of stopping the goods in transit after
he has parted with the possession of them.
(d) All of the above.

146. Holder in due course means any person-

(a) Drawing the instrument;
(b) Who for consideration became the possession of a promissory note;
(c) Named in the instrument to whom or to whom order the money is directed to be
paid;
(d) None of the above.

147. Intimation of the reconstitution of change in a registered partnership is to be given to

the Registrar of firms-
(a) No time limit;
(b) Within 30 days;
(c) Within 60 days;
(d) Within 90 days.

148. A firm shall not contain any name-

(a) King;
(b) Queen;
(c) Empire;
(d) All of the above

149. The fee payable for registration of LLP whose contribution exceeds `10 lakhs is
(a) `500/-
(b) ` 2000/-
(c) ` 4000/-
(d) ` 5000/-

150. Identify from the following which is the power of Inspector of Factory.
(a) Enter into any place of a factory;
(b) Make inquiry into any accident;

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 P-6: Laws and Ethics - Bit Questions

(c) Seize or take copies of any document;

(d) All the above.

151. The gratuity is payable to an employee shall not exceed-

(a) 12 months pay
(b) 16 months pay;
(c) 20 months pay
(d) 24 months pay

152. Withdrawal from PF may be allowed for –

(a) Marriage of the employer;
(b) Post matriculation education of children;
(c) For the purchase of a dwelling place;
(d) For illness in certain cases.

153. ESI Corporation is a-

(a) Partnership firm;
(b) Limited Liability Partnership;
(c) Body Corporate;
(d) Hindu Undivided Family.

154. Who is not eligible to get bonus?

(a) A temporary workman;
(b) A dismissed employee;
(c) A piece rated employee;
(d) A retrenched employee.

155. The appropriate government may fix minimum rate of wages for-
(a) Time work;
(b) Piece work;
(c) Guarantee time rate;
(d) All the above.

156. The payment of wages Act applies to wages payable to an employed person in
respect of wage period if such wages for that wage period do not exceed _____ per
month.
(a) ` 6500/-
(b) ` 10000/-
(c) ` 18,000/-
(d) ` 25,000/-

157. The quorum for a public company having the number of members more than 5000 is-
(a) 2
(b) 5
(c) 15
(d) 30

158. In the case of an adjourned meeting the company shall give not less than _____
notice to the members.
(a) 1 day
(b) 3 days
(c) 7 days
(d) None of the above.

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 P-6: Laws and Ethics - Bit Questions

159. Ethics is a set of _________ of human conduct that govern the behavior of individuals
or organizations.
(a) Principles
(b) Standards
(c) Principles or standards
(d) None of the above

160. The society for Business Ethics was started in

(a) 1950
(b) 1960
(c) 1970
(d) 1980

161. The Payment of Bonus Act 1965 extends to:

(a) The whole of India
(b) The whole of India except Jammu & Kashmir
(c) The whole of India except Kerala
(d) The whole of India except Jammu & Kashmir and Kerala

162. The minimum ceiling on gratuity as per the Payment of Gratuity Act, 1972 is:
(a) ` 5 lakhs
(b) ` 10 lakhs
(c) ` 15 lakhs
(d) ` 20 lakhs

163. The ESI Act, 1948 provides certain benefits to the employees in case of ________
(a) Sickness
(b) Maternity
(c) Employment injury
(d) All the three

164. A monthly return of contribution in the prescribed form 6 is required to be filed with the
Commissioner within ……… days of the close of the month as per Employees’
Provident Funds and Miscellaneous Provisions Act, 1952.
(a) 15
(b) 20
(c) 25
(d) 30

165. ____________ is not a negotiable instrument as per customs and usage.

(a) Delivery note
(b) Railway Receipt
(c) Cheque
(d) Government promissory note

166. The minimum paid-up capital for a Public company is:

(a) ` 3lakhs
(b) ` 4lakhs
(c) ` 5lakhs
(d) None of the above

167. If the agreement is made by obtaining consent by doing an act forbidden by the
Indian Penal Code, the agreement would be caused by:
(a) Coercion
(b) Fraud
(c) Misrepresentation
(d) Undue influence

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 P-6: Laws and Ethics - Bit Questions

168. Hundi’s are Indigenous instrument written in ____________ language

(a) Vernacular
(b) Hindi
(c) English
(d) Sanskrit

169. "If you contract to sell peas, you cannot oblige a party to have beans" - This
statement applies to:
(a) an implied condition as to be description of goods
(b) the implied condition as to fitness of goods for a particular purpose
(c) implied condition as to sample
(d) implied condition as to title

170. Who is an Adolescent as per Factories Act, 1948?

(a) Who has completed 17 years of age
(b) Who is less than 18 years
(c) Who has completed 15 years but less than 18 years
(d) None of these

171. Which of these is not a negotiable instrument as per the Negotiable Instrument Act,
1881?
(a) Bill of exchange
(b) Delivery note
(c) Bearer Cheque
(d) Share Certificate

172. Public Notice under the Indian Partnership Act, 1932 is given in the following manner:
(a) Serving a copy of the Notice to the Registrar of firms
(b) Publishing the Notice in the Official Gazette
(c) Publishing the Notice in one vernacular newspaper circulating in the district where
the firm's principal place of business is situated
(d) All of the above

173. A person may not become an agent if ______________

(a) He is of the age maturity
(b) He is of unsound mind
(c) Either of the above
(d) None of the above

174. In absence of a contract to the contrary, an agent is entitled to retain

__________________ of the principal until amount due for commission is not received by
him.
(a) Goods
(b) Papers
(c) Property (whether moveable or immovable)
(d) All of the above

175. Section 122 of Companies Act, 2013 provides that which of the following provisions
are not applicable to an OPC
(a) Section 100: Calling of EGM
(b) Section 101: Notice of Meeting
(c) Section 105: Proxies
(d) All of the above

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 P-6: Laws and Ethics - Bit Questions

176. A company in which either of the Government has no paid-up share capital is called
as a _________________ company
(a) Non-Government
(b) Government
(c) Listed
(d) Non-listed

177. Section 7(4) of Companies Act, 2013 provides that the company shall maintain and
preserve copies of all documents and information as originally filed with the registrar
till it’s ______________ under this Act.
(a) Incorporation
(b) Commencement
(c) Dissolution
(d) None of the above

178. ______________ are the principles of Business Ethics.

(a) Avoid exploitation of consumers
(b) Avoid unfair trade practices
(c) Unfair treatment to employees
(d) All of the above

179. In case of contractual obligations where the promisor dies before performance:
(a) The legal representatives of the promisor must perform the promise
(b) The legal representatives of the promisor must perform the promise provided it is
not one dependent on the personal qualifications of the promisor
(c) The legal representatives may not perform the promise
(d) The legal representatives are not liable to pay damages for nonperformance of
the promise.

180. An anticipatory repudiation has the effect of:

(a) An automatic putting an end to the contract
(b) Putting an end to the contract only on acceptance of the repudiation by the other
party
(c) Putting an end to the contract only on failure to perform when performance is
due.
(d) No putting an end to the contract.

181. In pretended bidding, sale is _______________.

(a) Sale is voidable at the option of the seller
(b) Sale is voidable at the option of the buyer
(c) Valid
(d) Illegal

182. According to Minimum Wages Act, 1948 wage slip shall be issued by every employer
to his employees
(a) One day prior to disbursement of wages
(b) On the date of disbursement of wages
(c) One day later to the disbursement of wages
(d) Anytime during the month

183. All monies received on application shall be kept in a separate bank account in a
______ bank.
(a) Nationalised
(b) Scheduled
(c) Government
(d) Any of the above

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 P-6: Laws and Ethics - Bit Questions

184. Where a company issues shares with differential right, the _____ should be maintained
under Section 88 of Companies Act, 2013.
(a) List of share-holders
(b) Register of shares
(c) Register of Members
(d) List of shares

185. Rule 34 provides that where the Tribunal has made winding up order of a LLP, the
liquidator shall submit a report containing which of the following particulars:
(a) Debts due to the LLP
(b) Guarantees given by the LLP
(c) Existing and contingent liabilities of the LLP
(d) All of the above

186. Every member of a company listed by shares and holding equity share capital shall
have the right to _____________ on every _____________ placed before the company.
(a) vote; resolution
(b) Speak; agenda
(c) Speak; resolution
(d) Any of the above.

187. When a professional promotes a position or opinion to such extent that some
objectivity may have to be compromised, this threat is known as
(a) Familiarity threat
(b) Objectivity threat
(c) Advocacy threat
(d) Intimidation threat

188. The ________ of the company shall contain the regulations for management of the
company.
(a) Articles
(b) Memorandum
(c) Both
(d) None of the above

189. The supervisory board under the German Model is known as

(a) Aufsichtsrat
(b) Kiertsu
(c) Vorstand
(d) Kyosei

190. An audit committee has four fold relationship and therefore has to interact with
management, internal auditor, public and
(a) Cost auditor
(b) Statutory auditor
(c) Tax auditor
(d) Management auditor

191. Which of the following is a method of discharge from liability?

(a) By endorsement
(b) By promising
(c) By cancellation
(d) By registration

192. A partner may contribute to the LLP

(a) tangible or intangible property.

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 P-6: Laws and Ethics - Bit Questions

(b) moveable or immoveable property.

(c) money, promissory note etc.
(d) Any of the above

193. Gratuity is payable to an employee after he has rendered continuous service for not
less than five years on his
(a) transfer
(b) daughter's marriage
(c) re-employment
(d) resignation

194. Who will not be considered as an employee?

(a) Canteen workers
(b) Casual workers
(c) Partners
(d) Part time employee

195. "Individual pension account" means an account of subscriber, executed by a

contract setting out the terms and conditions under the
(a) Provident fund scheme
(b) National pension system
(c) Citizen welfare system
(d) Minimum wage payment scheme

196. Which of the following is not a category of company?

(a) Inactive company
(b) Assistant company
(c) Dormant company
(d) Producer company

197. Section 92 of the Companies Act, 2013 requires a company to prepare and file
annual return in form no.
(a) MGT-12
(b) INC-23
(c) MGT-7
(d) SH-10

198. The main feature of e-contract is

(a) Cost and acceptability
(b) Purity and clarity
(c) Speed, accurate and reliable
(d) Perfection and attractive

199. Which of the following is not an unpaid seller's right against the goods?
(a) The right of retention
(b) The right of stoppage in transit
(c) The right of seeking claim for damage
(d) The right of resale

200. Where the endorser does not want that the endorsee or any other holder to incur any
expense on his account is called
(a) Restrictive endorsement
(b) Sans frais endorsement
(c) Conditional endorsement
(d) Unwanted endorsement

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 P-6: Laws and Ethics - Bit Questions

201. The liability of the partners will continue for the acts done before the dissolution, even
after the dissolution, until
(a) Public notice is given of the dissolution
(b) Partners are getting the final payment
(c) Claim is demanded by the creditors
(d) The death of partners

202. Every employee shall be entitled to receive bonus from his employer in an
accounting year if he has worked for not less than
(a) Ten working days
(b) Twenty working days
(c) Thirty working days
(d) Forty working days

203. Under Employee's State Insurance Act, 1948, the term of the office of the members of
Medical Benefit Council shall be
(a) 2 Years
(b) 4 Years
(c) 5 Years
(d) 10 Years

204. Which one cannot be transacted through postal ballot?

(a) Appointment of auditor
(b) Election of a Director
(c) Buy back of shares by a company
(d) Change in place of registered office outside the local limits of any city, town or
village

205. The appointment of an independent director shall be approved by the

(a) Board meeting
(b) General meeting
(c) Registrar of Companies
(d) Central Government

206. The sweat equity shares shall be locked in for a period of __________ years from the
date of allotment.
(a) One
(b) Two
(c) Three
(d) Four

207. The following is the disadvantage of business ethics:

(a) Through increasing morale and trust business can increase their market share
(b) Publicity due to well and ethical performance
(c) Acceptance of products of the company by the public
(d) Diversity in achievements

208. A proposal may be revoked at any time before

(a) the communication of acceptance
(b) the payment of consideration
(c) signing the agreement
(d) execution of the proposal

209. Which of the following is not to be taken care while admitting a new partner?
(a) Computation of newprofit sharing ratio and sacrifice ratio
(b) Accounting treatment of goodwill

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 P-6: Laws and Ethics - Bit Questions

(c) Professional qualification of admitting partner

(d) Revaluation of assets and liabilities

210. Where goods are delivered to the buyer and he refuses to accept them, the buyer is
not bound to
(a) retain them with him.
(b) look-after the goods.
(c) return them to the seller.
(d) store them in his godown.

211. No child shall be allowed to work in a factory unless he has completed his
(a) 12th year
(b) 14th year
(c) 16th year
(d) 18th year
212. Gratuity shall be payable to an employee on the termination of his employment after
he has rendered continuous service for not less than
(a) three years
(b) five years
(c) seven years
(d) ten years

213. The Employees' State Insurance Corporation is

(a) Hindu Undivided Family
(b) Local Authority
(c) Charitable Institution
(d) Body Corporate

214. The annual return of an OPC shall be signed by the company secretary or where
there is no company secretary, by the
(a) Senior executive of the company
(b) Auditor of the company
(c) Director of the company
(d) Advocate of the company

215. If there is any mis-statement in the prospectus then it would attract the liability on
(a) The printer
(b) The issuer
(c) The publisher
(d) The proof-reader

216. Every company limited by shares shall keep and maintain the Register of Members in
Form No.
(a) MGT-1
(b) MGT-3
(c) MGT-7
(d) MGT-12

217. Ethics are the set of moral principles that guide a person's
(a) Behaviour
(b) Philosophy
(c) Religion
(d) Profession

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 P-6: Laws and Ethics - Bit Questions

218. Anu threaten to kidnap Binu's daughter if she does not sell her house worth ` 90 Lakh
to her for ` 20 Lakh. This Contract is void due to —
(a) inadequacy of Consideration
(b) absence of Free Consent
(c) incompetence of Parties
(d) None of the above

219. The Latin Maxim "Nemo Dat Quod non Habet" means
(a) no man can pass a better title than he has
(b) let the Buyer beware
(c) no consideration – No contract
(d) ignorance of law is no excuse

220. As per the RBI Act, which of the following negotiable Instruments can be payable to
the bearer on demand?
(a) Cheque
(b) Hundi
(c) Bank Draft
(d) Promissory Note

221. When a partnership firm is continued even after the expiry of fixed term, it is called
(a) Partnership at Will
(b) Perpetual Partnership
(c) Fixed Partnership
(d) Particular Partnership

222. The amount of gratuity payable to an employee shall not exceed

(a) Ten months’ pay
(b) Twelve months’ pay
(c) Twenty months’ pay
(d) Twenty-five months’ pay

223. In case of a private company, mention the number of members personally present to
form the quorum of a meeting of the company.
(a) One member
(b) Two members
(c) Three members
(d) Four members

224. Which of the following is not a valid medium of sending notice to all shareholders?
(a) By registered post or speed post
(b) Through public advertisement
(c) Through registered email-id
(d) Through courier service

225. If any default is made in filing refund of money, the company and every officer, who
is in default shall be liable to a penalty maximum up to
(a) ` 50,000
(b) ` 75,000
(c) ` 1,00,000
(d) ` 1,25,000

226. Value chain as a strategic framework for analysis of competitive advantage was
promoted by
(a) Peter Drucker
(b) F. W. Taylor

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 P-6: Laws and Ethics - Bit Questions

(c) Michael Porter

(d) Tom Peters

227. A person is said to be of sound mind for the purposes of making a contract if, at the
time when he makes it, he is capable of
(a) listening it
(b) hearing it
(c) understanding it
(d) interpreting it

228. Ankit agrees to pay Bina ₹1500 if it rains today, otherwise Bina pays Ankit ` 2000. This
is a
(a) Gambling
(b) Wagering agreement
(c) Valid agreement
(d) Speculation

229. Writing of a person's name on the face or back of an instrument or on a slip of paper
attached to it is known as
(a) Endorsement
(b) Transfer
(c) Negotiation
(d) Transmission

230. Anusua and Shrita formed a partnership to undertake a construction of a shopping

complex in New Delhi. This partnership is called
(a) Partnership at will
(b) Particular partnership
(c) Unlimited partnership
(d) Partnership with undefined mission

231. As per the Minimum Wages Act 1948, Adolescent means a person who has
completed the age of 14 years but not completed the age of
(a) 15
(b) 14
(c) 21
(d) 18

232. Every employee shall be entitled to receive bonus from his employer in
(a) a financial year
(b) an accounting year
(c) a calendar year
(d) a manufacturing year

233. The annual return of an OPC shall be signed by

(a) the company secretary
(b) the director
(c) the chief accountant
(d) the auditor

234. The minimum age limit for appointment of managing director and the wholetime
director is
(a) 18 years
(b) 21 years
(c) 25 years
(d) 30 years

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 P-6: Laws and Ethics - Bit Questions

235. A company cannot remove a director appointed

(a) at the annual general meeting
(b) at the extra ordinary general meeting
(c) by the promoter
(d) by the tribunal

236. Moral management requires ethical

(a) producer
(b) leadership
(c) market
(d) customer

Answer Key:

(1) (b) Original agent

(2) (b) Payee
(3) (c) Dissolution on becoming a partner of unsound mind
(4) (a) 14 months
(5) (d) an independent married sister
(6) (c) Fencing of machinery
(7) (a) Two Directors
(8) (a) PDF file
(9) (c) not less than 1000 small shareholders or one tenth of such shareholders, whichever
is lower
(10) (b) moral judgement
(11) (d) Either of (a) and (b)
(12) (b) Sales takes place for existing and specific goods
(13) (c) It is open to the person to stop payment
(14) (d) Any of (a) to (c)
(15) (a) Prospectus
(16) (b) 30
(17) (c) 200
(18) (a) 10%
(19) (b) 15%
(20) (c) By breach of contract
(21) (c) There is an existing debt for which the surety gives guarantee to the creditor on
behalf of the principal debtor.
(22) (d) Neither (A) nor (B) nor (C)
(23) (a) 8 AM and 7 PM
(24) (d) Any of the above
(25) (c) 48 hours
(26) (b) 2
(27) (a) One third
(28) (c) 3
(29) (c) Content
(30) (d) A catalogue of goods for sale
(31) (a) may reject them
(32) (a) Occupier
(33) (a) delivery only
(34) (b) Partnership Property
(35) (c) Monopoly
(36) (a) Universal
(37) (c) agreement and enforceability
(38) (a) value
(39) (b) The Companies Act

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