AWAGARH PUBLIC SCHOOL

Date : 25-07-2024 STD 11 Commerce Business Studies Total Marks : 33

business studies

SECTION A () Choose The Right Answer From The Given Options.[1 Marks Each] [5]
1. Which city is known as Information Technology (IT) Hub of India?
a. Gurugram.
b. Pune.
c. Mumbai.
d. Bengaluru.

Ans. :
d. Bengaluru.
2. In second five year plan, Indian government allowed imports of capital goods for:
a. Transport development.
b. Industrial development.
c. Agricultural development.
d. Financial development.

Ans. :
b. Industrial development.
3. Industries can be classified into primary, secondary and:
a. Banking.
b. Tertiary.
c. Export.
d. None of these.

Ans. :
b. Tertiary.
4. The capital of a company is divided into number of parts each one of which are called:
a. Dividend.
b. Profit.
c. Interest.
d. Share.

Ans. :
c. Share.
Explanation:
The capital of a company is divided into a number of parts, each one of which is
called a share. These parts (or shares) are freely transferable except in the case of a
private company.

5. Providing loans and money transfer services to primary and secondary industries
belongs to which type of services?
a. Transportation services.
b. Banking and financing services.
c. Advertising services.
d. None of these.

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 Ans. :
b. Banking and financing services.

SECTION B () Given Section consists of questions of 3 marks each. ( Write Any 4 [12]
)
1. Briefly explain the role of commerce in business.

Ans. : Commerce is concerned with buying, selling and distribution of commodities. It is an

organised system for the exchange of goods and services.
It involves not only the functions of buying and selling but several other activities required
to facilitate buying and selling such as transportation, communication, etc.
The purpose of commerce is to provide the right goods to the right persons at the right
time and at the right place by removing various hindrances of trade. Therefore, we can
say that business depends on commerce.

2. Dalda Oil Mills produce refined oil. The entire production of oil produced by Dalda Oil
Mills is purchased by Raga Oil Depot, who in turn sells it to various retailers. Mrs Aashi
purchased 3kg of Dalda oil from Balaji Groceries.
Name the following.
i. Manufacturer ________
ii. Wholesaler ________
iii. Retailer ________
iv. Consumer ________

Ans. :
i. Manufacturer Dalda Oil Mills.
ii. Wholesaler Raga Oil Depot.
iii. Retailer Balaji Groceries.
iv. Consumer Mrs Aashi.
3. What do you understand by statement in lieu of prospectus?

Ans. : When the promoters of a public company do not want to approach the public for
securing the capital and they are in a position to get the subscriptions for shares and
debentures from financial institutions or investors, then no prospectus is required to be
filed and issued. In such a case, they have to file "statement in lieu of prospectus" atleast
three days before they allot the shares. The statement must be duly signed by all the
persons named therein as directors. It contains practically similar information as required
in the prospectus. The statement is required for the purpose of filing only.

4. Give the distinct features of general partnership.

Ans. : The distinct features of general partnership are:

i. General partnership is one in which liability of every partner is unlimited and joint.
ii. Every partner is entitled to take active part in management.
iii. Registration of the firm is optional.
iv. Existence of the firm is affected by death, insanity, insolvency or retirement of the
partners.
5. Which value is of utmost importance when partnership form of business is used?

Ans. : Maintaining trust and confidentiality of information is of utmost importance in a

partnership business. It is also important to use mutual agency in utmost good faith
keeping in mind the interests of all partners.

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 6. Mohan and Radha want to start a shop to sell Rajasthani Sweets. They did not know how
to develop the agreement for this purpose. So, they approached a Chartered Accountant
who advised them to prepare a document which may stipulate the terms and conditions
of the agreement.
On the basis of given information, answer the following questions:
(a) Name the document about which the chartered accountant advised Mohan and Radha.
(b) State any four important items they should include in the agreement besides the name,
nature and place of business.

Ans. : (a) The chartered accountant advised Mohan and Radha about the
Partnership Deed
(b) The Contents of the agreement besides the name, nature and place of business
are .
.
(i) Amount of capital to be contributed by each partner.
(ii) Profit sharing ratio between the partners.
(iii) Duties, powers and obligations of partners.
(iv) Maintenance of accounts and arrangement for their audit.

SECTION C () Given Section consists of questions of 4 marks each. ( Write Any 4 [16]
)
1. Tarun is engaged in lumbering. He thinks of diversifying his business and decides to
import a new cattle breed from abroad. For the movement of cattle he appoints Fast n
Quick Ltd. that deals in transportation of live stock. Once his goods are ready, the
consumers are made aware by advertisements and other sales promotion techniques.
On the basis of the given information about business done by Tarun, answer the following
questions:
(a) Identify the types of industry and the category of industry in which Tarun is dealing.
(b) Identify and explain industry in which Fast n Quick Ltd. is dealing.
(c) Identify the values portrayed above.

Ans. : (a) Primary Industry, Genetic Industry.

(b) Tertiary Industry.
(c) Value: Concern for organisational objectives.
2. "Risk is the element which makes the business different from other economic activities."
Do you agree? Justify your answer.

Ans. : All economic activities are divided into three categories.

i. Employment is a contract between employer and employee whereby the
employee agrees to work on pre-fixed terms and conditions for an employer for a
fixed wage or salary. There is no risk associated with employment as wages or
salary is pre-fixed.
ii. Profession includes those activities, which are requiring special knowledge and
skill to be applied by individuals in their occupation to earn fees. A professional
also takes a minimal risk of whether he will get clients or not.

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 iii. Business refers to those economic activities, which are connected with production,
purchase and sale of goods or supply of services with the main object of earning
profit. Since there is no pre-determined contract, return which is profit, is not
fixed. There may be profits in millions or there may be a heavy loss.
Therefore, business as an economic activity is different from other economic
activities mainly due to profit. However, there are other differences as well. For
example, a business man does not need specific qualifications as required in a
profession. A businessman has relative more freedom than a person who is
employed or is a professional.

3. If you need to start doing an economic activity to earn livelihood for your family, which
one would you like and why?

Ans. : Economic activities can be grouped under business, profession and employment. All
the three have their own merits and demerits. Therefore, one will decide according to the
conditions, he/ she is facing.
i. If one has enough funds to invest and he/ she is a person who has an ability to
take initiative and decision making then he/ she will prefer business.
ii. If one has a professional degree and minimum funds to start their own practice,
he/ she will prefer to be a professional.
iii. If one has no such degree and no funds to start any venture of their own, but some
qualification to suit the requirement of a job, he/ she will prefer employment.
4. Give two examples for each of the following non-economic activities:
i. Activities undertaken for personal satisfaction.
ii. Activities undertaken to fulfil social obligations.
iii. Activities undertaken to fulfil religious obligations.
iv. Activities undertaken out of love and affection.

Ans. :
i. Two examples of activities undertaken for personal satisfaction.
Going for a morning walk.

Pursuing gardening as a hobby.

ii. Two examples of activities undertaken to fulfil social obligations.
Attending the marriage of a cousin.

Attending the birthday party of neighbour's son.

iii. Two examples of activities undertaken to fulfil religious obligations.
Visiting the temple of Hanuman Ji on Tuesday.

Celebrating the festival of Diwali.

iv. Two activities undertaken out of love and affection.
To give gifts to your loved ones on special occasions.
A mother singing lullaby to put her baby to sleep.
5. JawaharLal prepares ‘Ghujiya’ for customers during Holi season every year. He prepared
more ‘Ghujiya’ than he could sell this year. He employed women and children also and
paid them less salary manufacturing on the packages. This way he generated profit for
himself.
(a) Do you think he is fulfilling all the objectives of business ?

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 (b) If not which aspects of this objective are not being fulfilled ?
(c) Write any two values lacking in JawaharLal.

Ans. : a) No, he is not fulfilling all the objectives of the business. Business is
concentrating on the objective of profit earning. Business is an integral part of
society. It makes use of resources of society. It earns profit by selling its products
or services to members of society. So it becomes obligatory on the part of the
businessman to do something for the society.
b) Social objectives of business are not fulfilled. Business has two aspect of
objectives. One is economic which means profit earning, productivity, innovation,
market standing etc. Other aspect is social objective which consist of Quality
goods, avoid unfair trade practices, employee welfare, community service,
generation of employment etc.
c) Two values lacking in Jawaharlal are as follows :

1. Ethical practices: Jawarharlal has appointed women and children for

manufacturing to generate profit. This behavior is unethical as Child labour is
unethical practice in India. Business should not indulge in unfair, unethical trade
practices. Anti-Social practices include hoarding, black marketing and adulteration.
Making false claims in advertisements to mislead and exploit people is an example
of unfair trade practice

2. Employee welfare: Employees are a valuable asset and they make significant
contributions towards the success of business. Objective of business is to ensure
welfare of employees by providing good working conditions, fair wages and
facilities such as housing, medical and entertainment etc. such welfare facilities
help to improve physical and mental health of employees. Jawaharlal paid less
wages to manufacture ghujiya. Fair wages are not paid so, employee welfare
objective is not met.
6. Monica Khanna is a jewellery designer. She started her career from the scratch and took
advanced designing course at Jewellry Product Development Center. On the completion of
the course she got a job at Gitanjali Gems. Being an experienced jewellery designer,
Monica Khanna focuses on maintaining the originality and creativity of the ornaments that
are custom designed and developed by her.
On the basis of the given information about Monica Khanna, answer the following
questions:
(a) Identify the type of economic activity that Monica Khanna is engaged in.
(b) State any three features of the type of economic activity as identified in part (a).

Ans. : (a) The occupation of Monica Khanna is Employment.

(b) The features of employment are:
(i) The employee is required to perform work as per service contract or rules of
service.

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 (ii) The employee is required to possess qualification and training as prescribed by
the employer.
(iii) The employee gets salary or wages as reward.
7. Saurabh and Gaurav felt that there was an opportunity of business in providing a service
of online grocery stores to working people residing in Mumbai. They analysed the idea in
terms of technical, financial and economic feasibility. Once they found all the aspects to be
satisfactory they decided to start a company called 'Grocery At Home Private Ltd'. They
got the name registered with the registrar of companies.
On the basis of the given information about Saurabh and Gaurav, answer the following
questions:
(a) Identify the step in the formation of company highlighted in above case?
(b) Enumerate the next three stages to be followed after the conclusion of aforesaid stage
in the step identified in part (a).

Ans. : (a) The step in formation of a company is Promotion.

(b) The next three stages to be followed after the conclusion of aforesaid stage of
promotion are:
(i) Fixing up Signatories to the Memorandum of Association: Promoters have to
decide about the members who will be signing the Memorandum of Association of
the proposed company. Usually the people signing memorandum are also the first
Directors of the Company. Their written consent to act as Directors and to take up
the qualification shares in the company is necessary.
(ii) Appointment of Professionals: Certain professionals such as mercantile
bankers, auditors etc., are appointed by the promoters to assist them in the
preparation of necessary documents which are required to be with the Registrar of
Companies.
(iii) Preparation of Necessary Documents: The promoter takes up steps to prepare
certain legal documents, which have to be submitted under the law, to the
Registrar of the Companies for getting the company registered. These documents
are Memorandum of Association, Articles of Association and Consent of Directors.
8. If registration is optional, why do partnership firms willingly go through this legal
formality and get themselves registered? Explain.

Ans. : Registration of partnership firm means recording of the firm's name and its relevant
prescribed particulars, in the Register of firms kept with the Registrar of firms. It provides
conclusive proof of the existence of a partnership firm. It is optional for a partnership firm
to get registered still most of the partnership firms voluntarily get themselves registered as
in case of non-registration, the firm has to face the following consequences.
i. A partner of an unregistered firm cannot file a suit against the firm or other
partners.
ii. The firm cannot file a suit against third parties.
iii. The firm cannot file a case against the partners. Hence, to avoid these
disadvantages, partnership firms register themselves.
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