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Business Laws and Ethics MCQs for CMA Inter
Chapter-wise Business Laws and Ethics MCQs with answers and explanations. Try the sample questions below, then practise a set of 10 with instant right/wrong.
Practise 10 Law & Ethics MCQsSample Business Laws and Ethics MCQs with answers
Q1 · Indian Contracts Act, 1872
Under the Indian Contract Act, 1872, which of the following is essential for a valid contract?
- (a) Free consent of the parties
- (b) Writing signed by both parties in all cases
- (c) Registration with the Registrar of Companies
- (d) Consideration that is adequate in value
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Answer: (a) Free consent of the parties
(a) is correct: free consent is one of the essentials of a valid contract under Section 10. (b) and (c) are not required for all contracts, and (d) is wrong because consideration need not be adequate, only lawful.
Q2 · Negotiable Instruments Act, 1881
Under the Negotiable Instruments Act, 1881, which of the following is a negotiable instrument?
- (a) Promissory note
- (b) Share certificate
- (c) Lease deed
- (d) Receipt for goods
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Answer: (a) Promissory note
(a) is correct: a promissory note is a negotiable instrument named in Section 13 of the Act. Share certificates, lease deeds and receipts for goods are not negotiable instruments under the Act.
Q3 · Companies Act, 2013
Under the Companies Act, 2013, which of the following is the minimum number of directors required in a public company?
- (a) One
- (b) Two
- (c) Three
- (d) Seven
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Answer: (c) Three
(c) is correct: Section 149 requires a public company to have at least three directors. A private company needs two, so (b) is wrong, and (a) and (d) are not the minimum for a public company.
Q4 · Sale of Goods Act, 1930
Under the Sale of Goods Act, 1930, goods which are to be manufactured or produced by the seller after the making of the contract of sale are called:
- (a) Existing goods
- (b) Future goods
- (c) Specific goods
- (d) Ascertained goods
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Answer: (b) Future goods
(b) is correct: Section 2(6) defines future goods as goods to be manufactured, produced or acquired by the seller after the contract of sale. Existing goods are those already owned or possessed by the seller.
Q5 · Indian Partnership Act, 1932
Under the Indian Partnership Act, 1932, the relation of partnership arises from:
- (a) Status
- (b) Contract
- (c) Operation of law
- (d) Inheritance
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Answer: (b) Contract
(b) is correct: Section 5 states that the relation of partnership arises from contract and not from status. This is what distinguishes it from a Hindu Undivided Family business, which arises by status.
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