Class XI

Business studies
Time Allowed: 3 hours. Maximum Marks: 80
General Instructions:
1. This question paper contains 34 questions.
2. Marks are indicated against each question.
3. Answers should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
5. Answers to the questions carrying 4 marks may be about 150 words.
6. Answers to the questions carrying 6 marks may be about 200 words.
7. Attempt all parts of the questions together.

1.Which of the following document is prepared by the the exporter and

includes details of the cargo in terms shippers name, the number of
packages , the shipping bill ,port of destination, name of the vehicle carrying
the cargo?
(a) Shipping bill
(b) Packaging list
© Mate’s receipt
(d) Bill of exchange. (1)
2. As per MSMED Act, 2006, manufacturing enterprises are defined in terms
of investment__________ in while service enterprises are defined in terms of
their investment in_____________.
(a) Equipment, Plant and Machinery
(b) Plant and Machinery, Equipment
© Current Assets, Fixed Assets
(d) Fixed Assets, Current Assets. (1)

3.Wholesalers serve as an important link between the manufacturers and

retailers. Which of the following statements is true about wholesalers?

(a) The wholesaler buys goods in bigger lots.

(b) The wholesaler usually specialise in one particular line of goods.
© Wholesalers undertake additional activities like grading of products,
storage, promotion of goods, etc.
(d) All of the above. (1)

4. Stages in the formation of a public company are in the following order:

A. Promotion, Incorporation, capital subscription, commencement of business

B. Incorporation, Capital of Business, Capital Subscription Commencement of
Business, Promotion
C. Promotion, Commencement of business
D. Capital Subscription, Promotion, Incorporation, Commencement of
Business
a) D is correct
b) C is correct
c) B is correct
d) A is correct. (1)

5. In which case of manufacturing enterprise, investment in plant and

machinery is more than 10 crore but does not exceed 50 crores?

(a) Micro Enterprise

(b) Small Enterprise
© Medium Enterprise
(d) None of these. (1)

6.Prajakta has been recently promoted to Class XII. She sold her books of
Class XI on www.buynsellbooks.com. It is an example of:

(a) B2C Commerce

© Intra B Commerce
(b) C2C Commerce
(d) B2B Commerce. (1)

7. Application for approval of name of a company is to be made to:

a) Government of India
b) Government of the State in which Company is to be registered
c) Registrar of Companies
d) SEBI. (1)

8.Which of the following statement is incorrect?

(a) Ethical behaviour is above the behaviour required by law

(b) Top management plays a crucial role in guiding the entire organisation
towards ethical behaviour.
© Employees should not be involved in the process of developing ethical
programmes.
(d) Ethics are essential for every business and for the progress of any
society. (1)

9. Preference Shares are referred to as Hybrid Securities because they have

features of both__________and___________.

(a) Equity Shares, Debentures

(b) Retained Earnings, Debentures
© Equity Shares, Public Deposits
(d) Retained Earnings, Equity Shares. (1)
10. Assertion (A): A Company has Perpetual Existence.

Reason ®: The existence of a company is not affected by the death,

retirement, resignation, insolvency or insanity of its members.

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. (1)

11. Which of the following statements is correct for wholesalers:

a) They undertake additional activities.

b) They generally take the title of the goods and bear the business risks in
their own name
c) They engage in buying and selling of goods
d) All of these. (1)

12. To sell ready-made garments for children, men, women, etc. is the
example of:

a) General Store
b) Single-line shop
c) Departmental Store
d) Single-product shop. (1)

13. The company form of organization is governed by which of the following

Acts:

a) The Companies Act, 1866

b) The Companies Act, 1913
c) The Companies Act, 2013
d) The Companies Act, 1956. (1)

14. Read the following statements carefully and choose the correct
alternative from the following:
Statement 1: Entrepreneurs improve the standard of living of many people,
directly and indirectly.
Statement 2: Entrepreneurship involves bigger risk as compared to career in
employment or practice of a profession.
Alternatives:-
(a) Both the statements are true.
(b) Both the statements are false.
© Statement 1 is true and statement 2 is false.
(d) Statement 2 is true and Statement 1 is
false. (1)
15.Machinery imported from China was further sold to Nepal. It is:

(a) Entrepot
(b) Import
© Export
(d) None of these. (1)

16. Assertion (A): Rate of Interest on Savings account is lower than Fixed
Deposit account.

Reason ®: Savings account is most suitable for small households’ savings.

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. (1)

17. Which of the following is part of Village and Small Industries Sector?

a) Handlooms
b) All of these
c) Sericulture
d) Handicrafts. (1)

18. Since the main objective of the business is to earn profits, which of the
following is not an appropriate method of earning profits:

A) All of these
b) Inflating the prices
c) Selling a good quality product at reasonable prices
d) Selling low-quality product at low
prices. (1)

19.According to___________ the insurer gets all the rights against the third
party with respect to the subject- matter insured, after compensating the
loss of the insured.

(a) Principle of Subrogation

© Principle of Mitigation
(b) Principle of Contribution
(d) Principle of Indemnity. (1)

20. A Government Company may be formed as which of the following:

a) Public Company
b) Private Company
c) Either Public or Private Company
d) Neither Public nor Private Company. (1)

21. Explain in brief why nations are involved in foreign

trade? (3)

22. Charu and Renuka are childhood friends. Charu is a consultant while
Renuka is an architect. They contributed equal amounts and purchased a
building for 2 crores. After a year, they sold it for 3 crores and shared the
profits equally. Are they doing the business? Give reason in support of your
answer. State the feature of business which is being highlighted in the given
example. (3)

OR

Explain any two business activities which are auxiliaries to

trade. (3)

23. A thread manufacturing company open shop at different locations in

India. He sells goods on cash basis only. The shops have identical
decorations. The prices of goods are fixed. In this way they eliminate
unnecessary middlemen thus benefiting the consumers.

i. Identify the type of shop referred to.

ii. State any of its two merits. (3)

24. After reading an advertisement in the newspaper about an upcoming

public issue of preference shares of a pharmaceutical company, Tushar made
up his mind to invest money in that issue. Later on, he discussed his plan
with his friend Vikesh who he is a stock broker. Vikesh, on the contrary,
advised him to invest in equity instead.

Give any three possible reasons because of which Vikesh wants Tushar to
invest in equity and not in preference shares. (3)
OR
After completing the studies, Priyanka decided to start her own business of
hand made chocolates. After analyzing all the pros and cons, she came to
the conclusion that the total funds required are Rs. 12,00,000. She had Rs.
2,00,000 in her savings bank account. As these funds were insufficient to
start the business, she approached Axis Bank for obtaining a loan of Rs.
10,00,000. The loan was approved within a month. On the basis of the given
case, answer the following questions:
i. Categorize the two types of funds on the basis of ownership.
 ii. Out of the two sources of funds, which one is a permanent source of
finance?

iii. Which source of funds requires a legal obligation to pay interest at a fixed
rate at regular intervals? (3)
25. Identify the type of Bank Account in each of the following cases:

(i) This account interlinks the savings account with a deposit account
and any amount in excess of a pre-determined amount is
automatically transferred to a fixed deposit.

(ii) Under this account, individuals can keep their surplus money safe in
the banks and also earn interest on their deposits.

(iii) In this account, certain fixed amount is deposited every month for a
specified period and the total amount is repaid with interest at the
end of the particular fixed period.

(iv) The main objective of this account is to enable the businessmen to

conduct their business transactions smoothly. (4)

OR
Write a note on the Automatic Vending
Machine. (4)
26. Anubhav took a fire insurance policy for his property worth 5,00,000 with
two insurers: ICICI Lombard General Insurance Co. Ltd. For 4,00,000 and
Bajaj Allianz General Insurance Co. Ltd. For 2,00,000. An electric short circuit
in his property caused fire and it resulted in a loss of 1,50,000. He filed a
claim for 1,50,000 against each of the two insurance companies.

(i) Can Anubhav recover 1,50,000 each from the two insurers.
(ii) Which principle of insurance has been highlighted in the given case?
(iii) Determine the liability of each of the two
insurers. (4)
OR

Give any three points of difference between business and

employment. (4)

27. Discuss the various types of e-business

transaction. (4)
OR
Discuss the scope of e-business. (4)

28. Name the various principles of contract of insurance.Discuss briefly any

four. (4)

29. Some years ago, the Tata group suffered a set back, when one five star
property in Mumbai was caught in the terrorist attack. The Government
stepped in and the militants were shot dead. However, the damage to the
property ran into several thousands of crores. Ratan Tata, the then Chairman,
did something that is totally out of the world. Every single person who was
affected, including those like the pav bhaji vendor outside the hotel, was
offered compensation running into several lakhs of rupees. The education of
children of those affected, free medical facilities for those survivors and
dependents at Tata hospitals for the rest of their lives. Ratan Tata himself
visited the families of each of the 80 employees affected by the bomb blast,
and offered compensation running into several lakhs of rupees.

This was business ethics at its best. Ratan Tata had clearly spelt what the
Tata group stands for, to this day. Out of the various elements of business
ethics, which element is highlighted in the given case? Also discuss other
elements of business ethics.
(4)

30. Discuss any five incentives provided by the Indian Government for
industries in backward and hilly areas. (4)

31.Identify the document highlighted in the following statements:

(1) This certificate specifies the origin of goods exported.

(ii) This document is issued by the commanding officer of the ship to the
exporter after the cargo is loaded on the ship.

(iv) This document is prepared by shipping company to acknowledge

the receipt of goods on ship and gives an undertaking to carry them
to port of destination.

iv) This document is the most appropriate and secure method of payment to
settle international transactions.

(v) This document is prepared by the importer and it shows the details
of goods imported and is used by custom authorities to determine
import duty.

(vi) On the basis of this document, imported goods are unloaded from
the carrier. (6)
 OR

Rekha Garments has received an order to export 2000 men’s trousers to

Swift Imports Ltd, located in Australia. Discuss the procedure that Rekha
Garments would need to go through for executing the export order.
(6)

32. Rakesh, Sudhir, and Mohit have mutually decided to set up a new small
scale handicraft factory in a remote rural area in Haryana. As it will not only
help to meet the growing demand for their products but also generate
different kinds of employment opportunities in the village and foster its
economic development. They have decided to promote their business in the
form of partnership. Sudhir’s association with the firm will be hidden from the
general public. Mohit will not take part in the day to day activities of the
business due to health issues. However, Rakesh will take actual part in
carrying out the business of the firm
Partnership. Sudhir’s association with the firm will be hidden from the
general public. Mohit will not take part in the day to day activities of the
business due to health issues. However, Rakesh will take actual part in
carrying out the business of the firm on behalf of other partners. In the
context of this case answer the following questions:

A. Briefly explain the various types of partner which are being mentioned
in the above paragraph.

b. Identify any two values which are being fulfilled by the

firm. (6)

OR

A syndicate of three persons namely, Akanksha, Ann, and Devesh was

formed to purchase the Tech Solutions Company and to promote and register
a company to which the Tech Solutions Company property was to be resold.
At that time the Tech Solutions Company was in a bad shape. The syndicate
first bought the debentures of the Tech Solutions Company at a discount.
Then they brought the company for Rs. 44,00,000. Out of this
Money, provided by them, the debentures were repaid in full and a profit of
Rs. 40,000 was made thereon. They promoted a new company and sold Tech
Solutions Company to it for Rs. 54,00,000. The profit of Rs. 10,00,000 was
revealed in the prospectus, but not the profit of Rs. 40,000. It was held that
the profit of Rs. 40,000 was a secret profit made by the syndicate as
promoters of the company.

In the context of the above case answer the following questions:

 a. ‘Promoters of a company enjoy a fiduciary position with the company,
which they must not misuse.’ Explain with reference to the above case.

b. What course of action can the company take in the event of non-
disclosure of any secret profits made by the promoters? (6)

33.Identify the appropriate ‘Clause of Memorandum of Association’

highlighted in the given statements

(i) It defines the purpose for which the company is formed.

(ii) According to this clause, members of the company are liable

for the amount unpaid on the shares owned by them.

(iii) It contains the name of the company with which the company
will be known.

(iv) This clause is also known as ‘Domicile Clause.

(v) This clause specifies the authorised capital.

(vi)In this clause, signatories to the memorandum state their intention to be

associated with the company and give their consent to purchase qualification
shares.
(6)

OR

Rakesh plans to set up an environmentally- friendly textile factory. He plans

to use fossil fuels to make paint, plastics, and polymers. Since the
wastewater from textile processing and dyeing contain residues, he has also
decided to ensure its appropriate treatment before it is released into the
environment. He is planning to approach a Special Financial Institution to
raise loans for his business. In the context of the above case answer the
following questions:

a. Describe briefly any two Special Financial Institutions in India.

b. State any two merits of raising loans from financial institutions.

c. List any two values that Rakesh wants to communicate to

society. (6)
34.Identify the various types of Postal Services and telecom services
highlighted in the following situations:

(i) It is a service in which mail is registered by the post office at

the time of sending, in order to assure safe delivery.

(ii) It’s a service which provides time-bound and express delivery

of letters, documents and parcels across the nation and
around the world.

(iii) It is a service for sending articles from one place to another

through the post.

(iv) It is a certificate issued by the post office on payment of

prescribed fee, when the sender wants to have a proof that he
has actually posted the letters.

(v) It enables a broadcasting company to directly beam the signal

to the TV set through a receiver that is installed in the house.
There is no need for a separate cable connection.

(vi) It is a two-way satellite based communication service, which

is commonly used to transmit narrowband data or broadband
data. (6)