📋 Sole Trading Test
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Full marks 50
📘 Theory (6 × 5 = 30 marks)
1 Meaning of Sole Trading
Write about:
- Definition (owned, controlled, financed by one person)
- No separate legal entity
- Unlimited liability
- All profits to owner
2 Objectives of Sole Trading
Include objectives:
- Earning profit
- Independence in decision making
- Personal satisfaction / self-employment
- Providing goods/services to community
3 Features of Sole Trading
List features:
- Single ownership
- Unlimited liability
- No separate legal entity
- Sole risk bearer & manager
- Limited capital & local operations
- Quick decisions & secrecy
4 Importance of Sole Trading
Explain importance:
- Provides employment & self-employment
- Easy to start with small capital
- Personal touch with customers
- Flexibility & quick decisions
- Supports local economy & distribution
5 Limitations of Sole Trading
Cover limitations:
- Unlimited liability
- Limited capital & resources
- Limited managerial skills
- Lack of continuity / uncertain life
- Difficult to expand & no large-scale economies
6 Suitability of Sole Trading
Where suitable:
- Small retail shops & service businesses
- Artisans & local trading
- E-commerce micro ventures
- Where personal service & quick decisions matter
🔘 Multiple Choice (5 × 2 = 10 marks)
1. Which of the following is a key feature of sole trading?
2. What is the primary objective of a sole trading concern?
3. Which of the following is a limitation of sole trading?
4. Sole trading is most suitable for:
5. Who owns the sole trading business?
🔗 Match the Column (5 × 2 = 10 marks)
1. Sole trader
2. Objective of sole trading
3. Feature of sole trading
4. Limitation
5. Suitability
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