Sample Paper -2 (2024-25)

CLASS-12-BUSINESS STUDIES

TIME: 3 HOURS M.M. – 80

 This question paper contains 34 questions.

 Marks are indicated against each question.
 Answers should be brief and to the point.
 Answers to the questions carrying 3 marks may be from 50 to 75 words.
 Answers to the questions carrying 4 marks may be about 150 words.
 Answers to the questions carrying 6 marks may be about 200 words.

1. Keeping in view the changes in the consumer demands and preferences ‘Taste Maker Bakery’
has reduced the sugar and fat content in its products. This approach of business shows that
management.
a) A multidimensional activity
b) An intangible force
c) A dynamic function
d) A group activity

2. Adarsh joined a food processing unit as a factory worker. Since he was expected to work on
sophisticated machinery, he was asked to undergo a special training. Identify the training
method with reference to above lines.
a) Apprenticeship Training
b) Internship Training
c) Vestibule training
d) Induction Training

3. Assertion: A company having easy access to the capital market follow a strict dividend policy
Reasons: Such a company can raise capital by approaching the capital market

In the following questions, a statement of Assertion (A) is followed by a statement of Reason

(R). Mark the correct choice as:
a) Both (A) and (R) are true, and (R) is the correct explanation of (A).
b) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
c) (A) is true, but (R) is false
d) (A) is false, but (R) is true.

4. Given below are two statements marked as I and II respectively. Read both statements and
choose the correct option.
 Statement I: Demutualisation refers to the legal structure of an exchange whereby the
ownership, the management and the trading rights at the exchange are segregated from one
another.
Statement II: Demutualisation refers to the process by which a public share company converts
into a mutual company.
Choose the correct option from the following:
a) I is true and II is false
b) II is true and I is false
c) Both I and II are true
d) Both I and II are false

5. In order to promote the habit of health and hygiene among weaker sections of the society,
Karan Limited has launched low cost packs of hand wash. Identify the type of marketing
philosophy being adopted by the company.
a) Product Concept
b) Production concept
c) Social Marketing concept
d) Marketing concept

6. In order to boost and double India’s export of goods and services to over USD 1,000 billion by
2025, it is important to lower effective corporate tax rate, bring down cost of capital and
simplify regulatory and tax framework. Identify the related dimension of business
environment.
a) Technological dimension and Political dimension
b) Social dimension and legal dimension
c) Economic dimension and legal dimension
d) Political dimension and social dimension

7. Identify the responsibility of consumers being highlighted in the picture given below

Select one of the following:

a) Ask for cash memo
b) Buy only standardized goods
c) Be aware
d) Be honest in dealing
8. Assertion (A): Directing takes place at every level of management.
Reason (R): There may be change in managers but the directing process continues as
organizational activities cannot continue further without direction.

In the following questions, a statement of Assertion (A) is followed by a statement of Reason

(R). Mark the correct choice as:
a) Both (A) and (R) are true, and (R) is the correct explanation of (A).
b) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
c) (A) is true, but (R) is false
d) (A) is false, but (R) is true.

9. Which plan is used for activities that occur regularly over a period of time?
a) Standing Plan
b) Collaborative Plan
c) Single use Plan
d) Follow up action plan

10. Which of the following statements is not true with regard to Commercial paper?
a) It is sold at a discount and redeemed at par
b) It usually has a maturity period of 15 days to one year
c) Is a long-term unsecured promissory note with a fixed maturity period
d) Companies use this instrument for bridge financing

11. The application of the principles of management has to be changed as per the requirements of
the prevailing situation at a particular point of time. Which feature of the principles of
management is being described in the given statement?
a) General guidelines
b) Cause and effect relationship
c) Contingent
d) Mainly behavioural

12. Which of the following is not a demerit of divisional structure?

a) All functions related to a particular product are integrated in one department
b) Conflict may arise among different divisional heads due to different interests
c) It is an expensive structure to maintain, since there may be a duplication of activities
across products
d) Authority provided to the managers to supervise all activities related to a particular
division may lead to undesirable consequences

13. Match the items given under A with the suitable statements under B.

Column-I Column-II
i. Divisional Structure a. Downward transfer of authority
from a superior to a subordinate.
ii. Delegation of Authority b. Jobs related to one product are
grouped under one department.
iii. Informal Organisation c. Delegation of all decision making
functions to the lower level of the
 hierarchy
iv. Decentralisation d. Network of social relationships
among employees

a) i) – b, ii) – a, iii) – d, iv) – c

b) i) – a, ii) – b, iii) – c, iv) – d
c) i) – c, ii) – b, iii) – a, iv) – d
d) i) – d, ii) – c, iii) – b, iv) – a

14. _____ means any person who buys any goods for personal use or hires or avails of any services
for a consideration.
a) Trader
b) Manufacturer
c) Service Provider
d) Consumer

15. Identify the correct sequence of the steps involved in the controlling process.
a) Taking corrective action, Measurement of actual performance, Comparison of actual
performance with standards, Analysing deviations, Setting performance standards
b) Setting performance standards, Measurement of actual performance, Comparison of
actual performance with standards, Analysing deviations, Taking corrective action
c) Measurement of actual performance, Taking corrective action, Setting performance
standards, Comparison of actual performance with standards, Analysing deviations
d) Comparison of actual performance with standards, Setting performance standards.
Measurement of actual performance, Analysing deviations, Taking corrective action

16. ___ is the integration of world economy into a single market through removal of trade barriers
between countries
a) Liberalisation
b) Globalisation
c) Both a and b
d) Privatisation

17. The function of management relating to laying down the foundation for carrying out the other
functions of management successfully is called __________.
a) Staffing
b) Planning
c) Organising
d) Controlling

18. According to Henri Fayol, if this principle of general management is violated, “authority is
undermined, discipline is in jeopardy, order disturbed and stability threatened.” Identify the
principle.
a) Unity of Command
b) Equity
c) Discipline
d) Authority and responsibility
19. Dev has two projects A and B in hand. The same amount of risk is involved in both the
projects. If the rate of return of project A and B is 20% and 15% respectively, then under
normal circumstances, which of the two projects is likely to be selected?
a) Project B
b) Both project A and project B
c) Project A
d) None of these

20. Statement I: Channel of distribution is important as goods are produced at one place and
customers are scattered all over in the nook and corner of the country, so the producer needs
to distribute the goods through middlemen.
Statement II: Physical movement of goods is transportation of goods from place of production
to place of ultimate consumption.

Choose the correct option from the following:

a) Statement I is true and II is false
b) Statement II is true and I is false
c) Both the statements are true
d) Both the statements are false

21. Explain the role of political environment in shaping the business.?

Or
Enumerate the benefits of understanding business environment.

22. Why is planning a pointless endeavour in the absence of a controlling function?

Or
What should be done during the ‘corrective action’ phase of the control process when
deviations exceed the permissible range, particularly in critical areas?

23. ’Demand for wood will be derived from demand for furniture and other wooden items in the
market.’ This is an example stating the characteristic of one of the categories of products.
Name the category and state two other characteristic of this category of products.

24. Rakesh Garments Ltd. are the manufacturers of ‘Ladies Designer Suits’ with their own trade
mark. During the year 2024-25 the company employed 30 senior technicians to work on
machines imported from France for manufacturing of ‘Ladies Designer Suits’. The technicians
were employed on a probation of one year and were put on their respective jobs after 10 days
of on-the-job training. Because of the faulty selection process they could not perform well. Ten
of them left the job on their own and 12 had to be removed by the company during the
probation period. Now the company is in the process of selecting new technicians. Advice the
company about any three types of selection tests, describing each in about 20 words, that may
be used for selecting the desired technicians.

25. Krishna Hotels is a disciplined organisation. It has many branches. The organisation tries to
apply discipline in all its branches with equal effectiveness. However, it knows that the nature
and location of different branches are different. They work under the impact of different
cultures and work environments. Even then discipline as an important management principle
is applied to all its branches —big or small, within the country or at foreign locations. Recently
 it formed a special body of five members to do research on cross functional expertise. The
organisation has learnt through the experience of the competitors that understanding among
various functional departments is important for increasing the productivity of the
organisation. So broadly it can be understood how such body is going to affect the organisation
through others’ experience. When it comes to remuneration of employees the organisation
adopts payment of different salaries for the same post. The logic given by the organisation is
that remuneration is based on situations and depends upon the employee’s capacity and the
expenses involved in a particular city. Which natures of principles of management have been
highlighted in the above case?
26. Give an example each of any three limitations of planning which are beyond the control of an
organization.
Or
Piyush is the CEO of a company. He in accordance with the other board members decides to
formulate a general statement which will be guiding the thinking of the employees. He further
goes on to formulate many such statements in the next six months. These statements could be
divided into two categories. Which type of plan is indicated above? What are the two types of
this plan? Also give one example of this plan.

27. Saurabh is running a real estate construction company. He has to meet clients on a regular
basis in order to make deals. For every decision he makes he has to be really cautious as he
knows once he has made a decision he can’t go back which will mean abandoning of the
project. So, he evaluates every decision before he makes it. That is why he pays a lot of
attention to what his clients are saying and figures out which portion of the deal is in his
capacity and favour. Recently his company pumped an amount of Rs.50 crores in a project and
he knows this project can affect the returns of the firms in the long run both positively as well
as negatively. All this is a part of the business in which he has established himself. He knows
that the funds invested are only likely to give returns in the future and impact the future
prospects of his business. The chances of success in any business are more when one does a lot
of research. He has to involve a considerable portion of his funds and block them in long term
projects. A thorough research is required in order to grow funds at the lowest cost possible. He
is a very stable minded entrepreneur.
i. Which concept of management has been highlighted in the above case?
ii. Identify its types highlighted in the above case.

28. “Management attempts to attain particular objectives, which must result from the
fundamental goal of the firm.” Give an explanation of the organizational and social goals of
management in light of the aforementioned statement.
Or
What does the term “management” mean? Describe the three characteristics that make it an
art.

29. Mr. Rohan is an exceptional team leader. He knows that for a team to achieve its goals and
progress nicely communicative effectiveness is required. He always maintains what he says,
focuses on future goals of the organisation and never goes against his commitments. You can
find him most of the times busy communicating with his superiors or subordinates. When he
once delivers the message he always checks whether his team is able to understand the
concept he is trying to communicate and he does it through proper questioning. He has a very
pleasing personality. Whenever he delivers a speech he focuses on his language, his voice and
 the sentiments of his listeners. He is a real team leader. He gives members of his team
opportunities to express themselves. Whenever he is about to make a speech he consults his
team members for developing a plan of communication by their participation and
involvement. He always says that whatever is useless should be rejected and whatever is
useful should be accepted. His purpose of speaking is to help others. He believes that a speech
should be such which takes into consideration interests and needs of the listeners. There is a
lot one can learn from Mr. Rohan’s personality. In the above case which measures of
communicative effectiveness have been adopted by Mr. Rohan? Identify them.

30. "Recently, Hindenburg Research released a statement highlighting significant irregularities in

India, which led to a downturn in the Indian stock market, resulting in substantial losses."

Identify Dimensions of Business Environment reflected in this case: (Application Based with

higher order thinking)

31. A business firm issues a money market instrument to finance its working capital requirements.
In order to finance the credit sales of the firm it issues this instrument. A textile firm which is
taking goods on credit from this firm promises to buy on the 25th of the next month. The
selling business firm makes use of this instrument when the’ date arrives.
i. Which money market instrument is highlighted in the above case?
ii. What is the role of commercial bank in the above process?
iii. Explain the above process in detail.

32. Prakash Electricals is a company which has in recent years adopted the decentralized method
of running the organisation. The company has grown dynamically and the decisions taken by
the lower level management are implemented which saves time as people taking decisions are
near the point of action. However, recently chairman of another manufacturing firm who is
also a good friend of Prakash, chairman of Prakash Electricals, met him and asked him how he
could evaluate performance of employees in case he goes for a decentralized approach. A few
hours later Prakash’s secretary calls him and asks for the list of works to be done the next day.
He narrates him all the important tasks to be executed.
i. Which importance of decentralisation has been highlighted in the above case?
ii. What advice do you think Prakash should give to have better control in a decentralized
organisation?
iii. Which concept of organizing is taking place between Prakash and his secretary?
iv. Which type of scope does this concept have?
Or
Describe, using three justifications, why organizing is a crucial managerial function.

33. Sohan is a production manager in a tyre manufacturing company. Recently he noticed that his
team could not achieve the target production of 80 units per day. Instead on an average the
production touched the target of only 65 units. On thorough analysis he found out that the
deviation between standard production and actual production is far beyond acceptable range,
on overall analysis he also found out that there has been a marginal increase in office
stationery expenses. Moreover, he detected that the machine installed for the purpose of
manufacturing was not able to perform at its best Being a management expert suggest Sohan
how he should deal with the existing problem.
34. Amit purchased an ISI mark electric iron from Bharat Electricals. While using, he found that it
was not working properly. He approached the seller and complained for the same. The seller
satisfies Amit by saying that he will ask the manufacturer to replace this iron. The
manufacturer refused to replace and Bharat Electricals decided to file a complaint in the
consumer court. Can Bharat Electricals do this. Why? Also explain who is a consumer as per
Consumer Protection Act, 1986.

Or
What is meant by consumer protection? State any three points of importance of the consumer
protection from the consumers’ point of view.
ANSWER

1. C
2. C
3. D
4. A
5. B
6. C
7. B
8. A
9. A
10. C
11. C
12. A
13. A
14. D
15. B
16. B
17. B
18. C
19. C
20. C
21. Business functions within the framework of political environment. Generally, government’s
policies change with the change of guard in power. Business is required to understand and
follow such changes and also respect the orders that judiciary gives from time to time.
For example, after globalization, Government of India allowed many companies to enter the
Indian market for giving boost to the different industries like food processing industry etc. That
paved the way for entry of multinationals in India on a large scale.
Or
The benefits of understanding business environment are:
i. Enabling the identification of opportunities and getting the first mover
advantage.
ii. Helping in the identification of threats and early
iii. Tapping useful resources
iv. Coping with the rapid changes
v. Assisting in planning and policy
vi. Improvement in performance
22. Without the function of controlling, planning is a pointless activity because the successful
implementation and monitoring of plans are dependent on the level of control.
Or
When variances in critical areas exceed acceptable limits, rapid managerial action is essential.
In this regard, a manager can train, educate, and develop employees to control deviations. This
will result in zero or very few deviations.

23. Industrial products.

The two main characteristics of industrial products are:
i. Few buyers: Buyers of industrial products are limited as compared to consumer
products, e.g. buyers of sugarcane are few as compared to buyers of sugar.
ii. Complex products: These products are complex. Therefore, technical consideration
assumes greater significance in their purchase decision.

24. Three types of selection tests:

 Intelligence tests. Such tests are designed to check the level of intelligence of the
candidates. It reflects the learning ability of an individual along with his ability to make
judgments and decisions.
 Aptitude test. Aptitude test is designed to measure the potential of an individual for
learning new skills. It reflects the candidate’s capacity to develop in the future.
 Personality test. Such tests help in judging the overall personality of an individual.
These indicate about the person’s reactions to emotions, maturity level and value
system.

25. The natures of principles of management highlighted above are:

 Universal Applicability. The principles of management can be applied to all types of
organisations and their branches regardless of their sizes and nature. However, they
should be applied with some change. Even then discipline as an important
management principle is applied to all its branches—big or small, within the country or
at foreign locations.
 Cause and Effect relationships. A cause and effect relationship is established by the
management principles. However, this cause and effect is exact as conditions are not
same and differ. So broadly it can be understood how such body is going to affect the
organisation through others’ experience.
 Contingent. A principle of management is applied according to a given situation. The
logic given by the organisation is that remuneration is based on situations and depends
upon the employee’s capacity and the expenses involved in a particular city.

26. Limitations of planning on which the organization does not have a significant control are as
follows:

Limitations Examples
Planning may not work in dynamic Frequent changes in the political or
environment. economic environment may upset in the
financial plans.
Planning leads to rigidity Following a pre-decided plan when
circumstances have changed.
Planning involves huge costs Incidental expenses such as expenses on
 boardroom meetings and discussions
with professional experts involve huge cost.
Or
Piyush is the CEO of a company. He in accordance with the other board members decides to
formulate a general statement which will be guiding the thinking of the employees. He further
goes on to formulate many such statements in the next six months. These statements could be
divided into two categories.
The type of plan highlighted in the above case is ‘Policy’ (He decides to formulate a general
statement which will be guiding the thinking of the employees).
The two types of policies are major policies and minor policies.
One example of Policy is ‘Recruitment Policy’.

27.
i. The concept of management highlighted in the above case is ‘Importance of fixed
capital investment’.
ii. The reasons for the importance of fixed capital decisions highlighted in the above case
are:
 Irreversible decisions: For every decision he makes he has to be really cautious
as he knows once he has made a decision he can’t go back which will mean
abandoning of the project.
 Risk involved: Recently his company pumped an amount of Rs.50 crores in a
project and he knows this project can affect the returns of the firms in the long
run both positively as well as negatively.
 Long-term growth: He knows that the funds invested are only likely to give
returns in the future and impact the future prospects of his business.
 Large amount of funds involved: He has to involve a considerable portion of his
funds and block them in long term projects.
28. Organizational objectives: The management is in charge of establishing and achieving the
organization’s goals. It aids in achieving the goals in a way that makes the most economical
and effective use of the available financial and human resources in their acquisition, usage,
and maintenance. The organization’s goals are as follows:
 Survival: Any business’s primary goal is to remain in operation, and in order to do so, it
must generate enough income to pay its bills.
 Profit: It serves as a motivator or reward for an entrepreneur’s efforts. Additionally, it
serves as the impetus for running a firm.
 Growth: A company must grow and diversify its operations if it wants to improve its
long-term prospects. Every company’s performance is determined by its growth rate,
which is determined by factors like sales, earnings, the number of goods produced and
sold, etc.
Social objectives: Since organizations are social constructs, their goals should be congruent
with societal norms. The following list includes a few of an organization’s social goals.
 The availability of high-quality goods at fair pricing.
 Making use of environmentally friendly production techniques.
 Should give underprivileged groups in society a chance to find jobs.
Or
The act of getting things done to successfully and efficiently achieve organizational goals is
referred to as management. The following are the three characteristics that make it an art
form:
  Presence of theoretical knowledge: The application of theoretical knowledge is part of
art. Management is the art of organizing tasks through people in order to achieve
desired outcomes by putting the available information into practice.
 Application of personalized approach: Since knowledge is applied differently by each
individual, management is really a personal talent. Even if two individuals undertake
the same type of task, their approaches will always be distinct. As an illustration, two
vocalists will never have the same performance.
 Using practice and imagination: Management is focused on outcomes and goals. Like
art, management likewise demands practice; consistent practice sharpens a person’s
abilities and originality.

29. The measures of communicative effectiveness which have been adopted by Mr. Rohan are:
 He communicates for present as well as future. He always maintains what he says,
focuses on future goals of the organisation and never goes against his commitments.
 After communication he ensures proper feedback. When he once delivers the message
he always checks whether his team is able to understand the concept he is trying to
communicate and he does it through proper questioning.
 He consults others before communicating. Whenever he is about to make a speech he
consults his team members for developing a plan of communication by their
participation and involvement.
 He conveys things of help and value to his listeners. He always says that whatever is
useless should be rejected and whatever is useful should be accepted. His purpose of
speaking is to help others.
 He is always aware of the language, tone and content of the message. He believes that
a speech should be such which takes into consideration interests and needs of the
listeners.

30.
1. Economic Dimension: The statement's impact on the stock market and
subsequent losses.

2. Political Dimension: Potential regulatory or government involvement in

addressing the alleged irregularities.

3. Social Dimension: Investor sentiment and potential consequences for the

broader economy.

4. Legal Dimension: Possible investigations or legal action related to the alleged

irregularities.

5. Technological Dimension: The role of research firms like Hindenburg in

uncovering and disseminating information.
31.
i. The money market instrument which is highlighted in the above case is ‘Commercial
Bill’.
ii. When the trade bill is accepted by a commercial bank it becomes a commercial bill.
 iii. When the goods are sold on credit the buyer has to make payment on a specific date in
the future. The seller now has an option either to make payment on the specified date
or make use of bill of exchange. Here the seller is known as the drawer (he draws the
bill) and the buyer is known as the drawee (he accepts the bill). As soon as the bill is
accepted it becomes a trade bill. These bills can be given to a bank or these bill could
be discounted with the bank which makes it a commercial bill as soon as it accepts it.
Here onwards the bank takes the responsibility of taking money from the buyer. The
seller gets a little less than the actual value. The bills receivable are handed over to the
bank.

32.
i. The importance of decentralisation which is highlighted above is Quick decision
making. (The company has grown dynamically and the decisions taken by the lower
level management are implemented which saves time as people taking decisions are
near the point of action).
ii. The advice that Prakash should give in order to get a better control is to make the
departments answerable for the final outcomes. Better control systems like balance
score card, management information system and observation through CCTV cameras to
be adopted to keep track of the employees’ performance.
iii. The concept of organizing which is taking place between Prakash and his secretary is
‘Delegation’. As it is a superior subordinate relationship involving sharing of tasks of
Prakash, the manager, here.
iv. Delegation has a narrow scope as it is limited to superior and his immediate
subordinate.
Or
The vital significance that organization plays in any corporate venture is highlighted by the
following points:

i. Clarity in business partnerships: The development of working connections defines

“who will report to whom” and outlines communication channels. This clears up any
ambiguity in the transmission of knowledge and instructions.

ii. Efficient management: Clear descriptions of occupations and related responsibilities

are provided through organizing. By doing so, confusion and duplication are reduced.
In addition, effective work execution is made possible by transparent working
relationships. As a result, managing an enterprise becomes simple, which improves
administration.

iii. Development and expansion: By allowing a company to break from established

conventions and take on new challenges and by aiding its effective management,
organizing aids in the growth and diversification of an enterprise.

33. Peter should follow the following principles of managerial control while analysing deviations:
 Critical point control: According to this principle of managerial control a manager
should focus on Key Result Areas (KRAs) that are critical to the success of an
organisation. A manager should not waste his precious time on checking each and
every activity in the organisation. He should focus on those areas which are critical to
 the success of the enterprise. In the above case Peter should focus on improving the
performance of the machinery either by repairing it or by replacing it with the new
one. Marginal increase in stationery expenses can be dealt later by him.
 Management/Control by Exception: As per this principle of managerial control a
manager trying to control everything may end up controlling nothing. Therefore, only
significant deviations that go beyond the permissible limit should be brought to the
notice of management. In the above case poor performance of machinery needs
immediate managerial attention.

34. Bharat Electricals cannot file a complaint. This is because Bharat Electricals is not a consumer
as per Consumer Protection Act, 1986 because they bought the goods for resale or for
commercial purpose. Under the Consumer Protection Act, a consumer is defined as:
i. A person who buys goods for consideration which has been paid promised, or partly
paid and partly promised or under any scheme of deferred payment. It includes any
user of such goods, when such use is made with the approval of the buyer but does not
include a person who obtains goods for resale or any commercial purpose.
ii. Any person who hires or avails any service for consideration which has been paid or
promised or partly paid and partly promised or under any system of deferred payment.
It includes any beneficiary of services when such services are availed of with the
approval of the person concerned but does not include a person who avails of such
services for any commercial purpose.
Or
Consumer protection is a very wide term. It includes providing information to the consumers
about their rights and responsibilities and helps in getting their grievances redressed.
Consumer is treated as a king in the market, therefore, producers produce goods as per their
need and want.
Importance of consumer protection from consumer’s point of view are:
i. Consumer ignorance: Due to widespread ignorance of consumers about their rights
and reliefs available to them, they need to be made aware in this regard. Consumer
protection provides information to the ignorant consumers regarding their rights and
reliefs available to them.
ii. Unorganised consumers: Consumers need to be organised for safeguarding their
interests. In developing countries like India, consumers are not organised. There are
very few consumer organisations which are working to protect the interests of
consumers. Consumer protection encourages establishment of more consumer
organisations.
iii. Widespread exploitation of consumers: Consumers are exploited by unscrupulous,
exploitative and unfair trade practices of sellers. They might be exploited by unfair
trade practices like defective and unsafe products, adulteration, hoarding, black
marketing, etc. Consumers need protection, against such unfair trade practices.