Q1: The imaginary line passing through the intersection of cross hairs and the optical centre of the objective, is known as

ANS:B - line of collimation

Line of sight is an imaginary line joining the point of intersection of crosshairs of diaphragm and optical centre of the objective.

Line of collimation, during levelling line of sight becomes horizontal thus at that point line of sight becomes line of collimation. Line of sight is the imaginary line passing through the intersection of crosshairs and optical centre of the objective whereas Line of collimation is the imaginary line passing through the centre of the eyepiece and the optical centre of the objective. I think when the line of collimation is horizontal, that would be the time when the line of collimation and the line of sight becomes the same. The line of sight is always horizontal, while the collimation the deviation from the true line of sight which is horizontal.