Class 9 Commercial Studies — Chapter 8 : Cooperative Society (Chapter-wise Questions Answers and MCQs)
Class 9 Commercial Studies — Chapter 8 : Cooperative Society (Chapter-wise Questions Answers and MCQs)
1. A group of farmers joins together to buy fertilizers directly from manufacturers at lower prices. Which type of organisation is most suitable?
A. Joint Stock Company
B. Partnership Firm
C. Cooperative Society
D. Sole Proprietorship
Answer: C. Cooperative Society
2. Ten workers want to build low-cost houses by contributing small amounts of money. Which feature of a cooperative society makes this possible?
A. Profit motive
B. Mutual help
C. Monopoly
D. Speculation
Answer: B. Mutual help
3. Ravi owns 100 shares while Mohan owns only 5 shares in a cooperative society. During voting, Ravi will have:
A. 100 votes
B. 5 votes
C. 1 vote
D. Votes equal to capital
Answer: C. 1 vote
4. A cooperative society distributes its surplus according to:
A. Number of votes
B. Number of directors
C. Business done with the society and limited dividend on capital
D. Age of members
Answer: C. Business done with the society and limited dividend on capital
5. Which situation best shows the principle of "service before profit"?
A. Increasing prices to earn more profit
B. Providing goods to members at reasonable prices
C. Paying huge dividends
D. Investing in risky businesses
Answer: B. Providing goods to members at reasonable prices
6. A member wants to leave a cooperative society. What can he do?
A. Sell shares in the stock exchange
B. Withdraw his capital after proper notice
C. Dissolve the society
D. Take all the assets
Answer: B. Withdraw his capital after proper notice
7. Which organisation is more suitable for protecting poor consumers from exploitation?
A. Partnership
B. Cooperative Society
C. Private Company
D. Public Company
Answer: B. Cooperative Society
8. If the government closely supervises an organisation to ensure proper functioning, the organisation is likely to be a:
A. Sole Proprietorship
B. Partnership
C. Cooperative Society
D. HUF
Answer: C. Cooperative Society
9. Which feature prevents rich members from dominating poor members?
A. Open membership
B. One member one vote
C. Cash trading
D. Registration
Answer: B. One member one vote
10. A cooperative society needs additional funds for expansion. Which demerit may create difficulty?
A. Democratic management
B. Limited capital
C. State patronage
D. Open membership
Answer: B. Limited capital
11. A person is denied membership because of his religion. Which principle is violated?
A. Cash trading
B. Religious and political neutrality
C. Limited liability
D. Registration
Answer: B. Religious and political neutrality
12. Why are cooperative societies generally less likely to have bad debts?
A. They give unlimited credit.
B. They mainly follow cash trading.
C. They charge high interest.
D. They borrow from banks only.
Answer: B. They mainly follow cash trading.
13. Which organisation is most suitable if the main aim is member welfare rather than profit?
A. Public Company
B. Partnership
C. Cooperative Society
D. Multinational Company
Answer: C. Cooperative Society
14. A cooperative society continues even after the death of a member because it has:
A. Unlimited liability
B. Separate legal entity
C. Profit motive
D. Small capital
Answer: B. Separate legal entity
15. Which of the following is a disadvantage of democratic management?
A. Members cooperate fully.
B. Inexperienced office-bearers may be elected.
C. Better decision-making.
D. Higher efficiency.
Answer: B. Inexperienced office-bearers may be elected.
16. Which feature encourages equality among all members?
A. Limited capital
B. One member one vote
C. High dividend
D. Transferable shares
Answer: B. One member one vote
17. If a cooperative society earns a surplus, it should first:
A. Distribute all the profit among members
B. Set aside reserve and welfare funds as per rules
C. Donate all the money
D. Buy more shares
Answer: B. Set aside reserve and welfare funds as per rules
18. Which situation best explains "internal financing"?
A. Borrowing from foreign banks
B. Using reserves created from surplus
C. Issuing debentures
D. Selling assets
Answer: B. Using reserves created from surplus
19. Which of the following is most likely to create disputes in a cooperative society?
A. Mutual help
B. Rift among members
C. Cash trading
D. State patronage
Answer: B. Rift among members
20. Why is a cooperative society considered a democratic organisation?
A. Members invest equal capital.
B. Every member has one vote irrespective of capital.
C. Directors own the business.
D. Government appoints all members.
Answer: B. Every member has one vote irrespective of capital.
Class 9 Commercial Studies — Chapter 8 : Cooperative Society (Chapter-wise Questions Answers and MCQs)
1. What is a Cooperative Society?
Answer:
A cooperative society is a voluntary association of persons who join together to promote their common economic interests through mutual help.
2. What is the main objective of a Cooperative Society?
Answer:
Its main objective is to provide service to its members rather than earn profits.
3. What is meant by voluntary association?
Answer:
People are free to join or leave the society whenever they wish by following the rules.
4. What is open membership?
Answer:
Any person can become a member without discrimination based on caste, religion, or gender, provided he fulfills the conditions.
5. What is meant by "One Member, One Vote"?
Answer:
Every member has only one vote irrespective of the number of shares held.
6. What is a separate legal entity?
Answer:
A cooperative society has its own legal identity, separate from its members.
7. Under which Act is a Cooperative Society registered?
Answer:
The Cooperative Societies Act, 1912 (or the respective State Cooperative Societies Act).
8. Name any two Cooperative Societies in India.
Answer:
Amul
IFFCO
9. What is the service motive?
Answer:
The society works mainly to serve its members and not to maximise profits.
10. What is State Control?
Answer:
The government supervises and regulates cooperative societies through the Registrar.
11. What is State Patronage?
Answer:
The government provides financial and other assistance to cooperative societies.
12. What is Cash Trading?
Answer:
Goods are sold mainly on cash, reducing the risk of bad debts.
13. What is Surplus?
Answer:
Surplus is the excess of income over expenditure earned by the society.
14. What is Democratic Management?
Answer:
The members elect a managing committee to run the society democratically.
15. State one merit of a Cooperative Society.
Answer:
Limited liability.
16. State one demerit of a Cooperative Society.
Answer:
Limited capital.
17. What is Limited Liability?
Answer:
Members are liable only up to the amount of shares they have invested.
18. What is Internal Financing?
Answer:
Reserve funds created from surplus are used for future development.
19. Who manages a Cooperative Society?
Answer:
The Managing Committee elected by the members.
20. What is the minimum number of members required to form a Cooperative Society?
Answer:
At least 10 members.
21. Why is registration compulsory?
Answer:
Registration gives the society legal status and recognition.
22. Why is a Cooperative Society called a democratic organisation?
Answer:
Because every member has equal voting rights.
23. Why is profit not the primary objective?
Answer:
Because the society is formed to provide services to members.
24. Why is open membership an advantage?
Answer:
It gives equal opportunity to all eligible persons to join.
25. Why are Cooperative Societies suitable for poor people?
Answer:
They require low capital and provide goods and services at reasonable prices.
26. Why do Cooperative Societies have continuity?
Answer:
They continue to exist despite the death or withdrawal of members.
27. Why is Government Control necessary?
Answer:
To ensure proper management and protect members' interests.
28. Why is cash trading preferred?
Answer:
It reduces bad debts and financial losses.
29. Why is democratic management important?
Answer:
It ensures equal participation of all members.
30. Why is capital limited in a Cooperative Society?
Answer:
Because members usually contribute small amounts and voting is not based on capital.
31. What are the main features of a Cooperative Society?
Answer:
Voluntary association
Open membership
Separate legal entity
One member one vote
Service motive
Democratic management
Registration
Cash trading
32. State any four merits of a Cooperative Society.
Answer:
Easy formation
Open membership
Limited liability
Democratic management
33. State any four demerits of a Cooperative Society.
Answer:
Limited capital
Inefficient management
Lack of motivation
Excessive government control
34. What is the principle of Mutual Help?
Answer:
Members work together to achieve common economic benefits.
35. What is meant by Distribution of Surplus?
Answer:
The surplus is distributed fairly after creating reserve funds according to the rules of the society.
1. Define a Cooperative Society. Explain its features.
Answer:
A Cooperative Society is a voluntary association of persons who come together to promote their common economic interests on the basis of self-help and mutual help. Its main objective is to provide service to its members rather than earn profit.
Features:
i. Voluntary Association – Membership is voluntary. Anyone can join or leave.
ii. Open Membership – Open to all irrespective of caste, religion, gender or political views.
iii. Separate Legal Entity – It has a legal identity separate from its members.
iv. One Member One Vote – Every member has equal voting rights.
v. Service Motive – Main aim is to serve members, not maximize profits.
vi. Registration – Must be registered under the Cooperative Societies Act.
Vii. State Control – Government supervises and regulates cooperative societies.
viii. Distribution of Surplus – Surplus is distributed according to members' participation after creating reserves.
ix. Cash Trading – Goods are generally sold on cash basis.
2. Explain the merits (advantages) of a Cooperative Society.
Answer:
The important merits are:
i. Easy Formation
Simple legal procedure.
Minimum ten members required.
ii. Open Membership
Membership is open to everyone without discrimination.
iii. Limited Liability
Members' liability is limited to their share capital.
iv. Continuity
Death, insolvency or retirement of members does not affect the society.
v. Democratic Management
Managed on the principle of "One member, one vote."
vi. Internal Financing
Reserve funds and retained earnings help finance expansion.
vii. Low Operating Costs
Members work voluntarily, reducing expenses.
viii. Cheaper and Better Supplies
Eliminates middlemen and provides goods at lower prices.
ix. State Support
Government provides loans, subsidies and tax benefits.
x. Social Welfare
Promotes cooperation, equality and community development.
3. Explain the demerits (limitations) of a Cooperative Society.
Answer:
The main demerits are:
a. Limited Capital
Cannot raise large amounts of capital.
b. Inefficient Management
Office bearers may lack professional skills.
c. Lack of Motivation
No strong profit motive reduces efficiency.
d. Non-transferability of Shares
Shares cannot be freely transferred.
e. Lack of Secrecy
Accounts and records are open for inspection.
f. Excessive Government Control
Government interference delays decisions.
g. Rift Among Members
Conflicts among members reduce efficiency.
4. Distinguish between a Cooperative Society and a Joint Stock Company.
Answer:
Basis Cooperative Society Joint Stock Company
Objective Service Profit
Formation Under Cooperative Societies Act Under Companies Act
Minimum Members 10 2 (Private), 7 (Public)
Membership Open Restricted
Voting One member, one vote Votes according to shares
Management Managing Committee Board of Directors
Profit Distribution According to patronage Dividend according to shares
Transfer of Shares Restricted Freely transferable (public company)
Government Assistance Available Generally not available
Capital Limited Large
5. Distinguish between a Cooperative Society and a Partnership.
Answer:
Basis Cooperative Society Partnership
Registration Compulsory Not compulsory
Members Minimum 10, no maximum 2–50
Objective Service Profit
Legal Status Separate legal entity No separate legal entity
Management Managing Committee Partners
Government Assistance Available Not available
Governing Law Cooperative Societies Act Partnership Act, 1932
6. Explain the formation of a Cooperative Society.
Answer:
The formation involves the following steps:
a. At least 10 adults having a common objective decide to form a society.
b. Prepare an application containing:
Name and address of the society
Objectives
Names and addresses of members
Share capital
Rules for admission of members
c. Prepare two copies of the bye-laws.
d. Submit the application and bye-laws to the Registrar of Cooperative Societies.
e. The Registrar verifies the documents.
f. If satisfied, the Registrar issues a Certificate of Registration.
g. The society becomes a separate legal entity after registration.
7. Explain the management of a Cooperative Society.
Answer:
The management is carried out by a Managing Committee elected by the members.
Office Bearers:
President
Vice-President
Secretary
Joint Secretary
Treasurer
Functions:
Formulate policies.
Manage daily affairs.
Maintain accounts and records.
Prepare annual reports.
Ensure compliance with the Cooperative Societies Act.
Present accounts for audit.
Work for the welfare of members.
8. Why are Cooperative Societies called democratic organisations?
Answer:
Cooperative societies are democratic because:
Every member has one vote, irrespective of shareholding.
Office bearers are elected democratically.
Members participate equally in decision-making.
Management is accountable to members.
Equality and mutual cooperation are encouraged.
Hence, cooperative societies operate on democratic principles.
9. Explain the principle of "One Member One Vote."
Answer:
The principle means that every member has equal voting rights, irrespective of the amount of capital invested. A member with one share and another with many shares each get only one vote. This ensures equality, prevents domination by wealthy members and promotes democratic management.
10. "The service motive is the soul of a Cooperative Society." Explain.
Answer:
The main aim of a cooperative society is service, not profit. It provides goods and services to members at reasonable prices, eliminates middlemen, improves members' economic conditions and distributes surplus fairly. Any profit earned is only incidental. Therefore, service is considered the soul of a cooperative society.
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