HSSLiVE

Kerala Plus One Business Studies Previous Year Question Paper March 2018 with Answers

Time Allowed: 2^1/2 hours
Cool off time: 15 Minutes
Maximum Marks: 80

General Instructions to Candidates

• There is a ‘cool off time of 15 minutes in addition to the writing time.
• You are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read questions carefully before you answering.
• All questions are compulsory and the only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures, and graphs should be shown in the answer sheet itself.
• Malayalam version of the questions is also provided.
• Give equations wherever necessary.
• Electronic devices except non-programmable calculators are not allowed in the Examination Hall.

Answer all questions from question numbers 1 to 9. Each carries one score. (9 × 1 = 9)

Question 1.
The broad classification of business activities include ………. and ……….
a) Trade and Auxiliaries to trade
b) Industry and Commerce
c) Industry and Trade
d) Internal Trade and External Trade
Answer:
Industry and commerce

Question 2.
Which among the following is the main characteristic of Hindu Undivided Family Business?
a) Single ownership
b) Transfer of membership
c) Membership by birth
d) Registration is compulsory
Answer:
Membership by birth

Question 3.
VSAT (Very Small Aperture Terminal) is satellite based ………..
a) Rail transport service
b) Communication service
c) Banking service
d) Airtransport service
Answer:
Communication service

Question 4.
An apex bank set up in India to provide financial assistance to small business organizations is
a) SIDBI
b) RSBDC
c) IDBI
d) IBRD
Answer:
a) SIDBI

Question 5.
Identify the document issued by public companies to invite public to subscribe its shares.
a) Prospectus
b) Memorandum of Association
c) Table A
d) Articles of Association
Answer:
a) Prospectus

Question 6.
Fill in the series as per hint given :
a) Equity Shares – Owned Capital
b) Debentures – ……….?………..
Answer:
Borrowed capital

Question 7.
Which among the following is against business ethics?
a) Using fair weights and measures
b) Fair treatment to workers
c) Earning reasonable profits
d) Charging unfair price
Answer:
d) Charging unfair price

Question 8.
Find the odd one from the following :
a) Supermarkets
b) Multiple shops
c) Market traders
d) Mail order houses
Answer:
c) Market traders

Question 9.
Which one of the following is NOT an export document?
a) Letter of credit
b) Bill of Lading
c) Bill of entry
d) Certificate of origin
Answer:
a) Letter of credit

Answer any five from question numbers 10 to 15. Each carries two scores. (5 × 2 = 10)

Question 10.
Write any two social responsibilities of business towards consumers.
Answer:

1. Supply right quality and quantity of goods and services at reasonable prices.
2. Avoiding unfair trade practices like adulteration, poor quality, misleading advertisement etc.

Question 11.
Suggest any two payment mechanism used in e-Business.
Answer:

1. Cash on delivery
2. Cheques
3. Debit/Credit cards
4. Digital currency

Question 12.
‘A public sector undertaking formed by passing an Act in the Parliament’. Identify it. Give an example.
Answer:

1. Statutory corporations or public corporations
2. Examples: LIC, RBI, SBI

Question 13.
Write any two merits of retained earnings as a source of finance.
Answer:

1. It is a permanent source of funds available to an organization
2. No costs in the form of interest, dividend or flotation cost.

Question 14.
Differentiate the terms Licensing and Franchising in connection with international business.
Answer:
Difference between Licensing and Franchising:
Licensing:

• The term Licensing is used in connection with production and marketing of goods
• Licenser does not have control over licensee
• Rules and regulations are flexible

Franchising:

• The term franchising is used in connection with production and marketing of services
• Franchiser excercise control over franchise
• Rules and regulations are rigid

Question 15.
List any two services rendered by retailers to consumers.
Answer:

1. A retailer collects different varieties of goods. So he can satisfy different types of customers.
2. A retailer provides market information to wholesalers and manufacturers.

Answer any six from question numbers 16 to 22. Each carries three scores. (6 × 3 = 18)

Question 16.
Write any three differences between Profession and Employment.
Answer:

Question 17.
There are persons who assemble resources and undertake the necessary steps to form a company. Name such persons. Explain their legal position in the company.
Answer:
a) Promoter
b) The promoter is neither an agent nor a trustee of the company. The promoter stands in the fiduciary relationship with the company. He should not make any secret profits out of the dealings. Any such gains are to be disclosed. The promoter must act honestly, in good faith and in the best interest of the company. The promoter is personally liable for all the preliminary contracts with the other parties before incorporation. The promoter is also liable for any omission of facts or false statements in the prospectus.

Question 18.
Write any three differences between departmental undertakings and statutory corporations.
Answer:

Question 19.
List out any three features of cottage industries.
Answer:
Features of Cottage Industries:
Cottage industries: Cottage industries are characterised by certain features –

• These are organised by individuals, with private resources
• Normally use family labour and locally available talent
• The equipment use,d is simple
• Capital investment is small

Question 20.
A large retailing unit, selling a wide variety of consumer goods on low price and with self-service concept. Identify it and mention any two advantages.
Answer:
a) Supermarkets/Super Bazars
b) 1. Consumers can purchase everything from supermarket
2. There is no bad debt as sales are on cash basis only.
3. They are located at the centre of a town.

Question 21.
From the items given in brackets, choose the suitable mode of entry into international business for the following cases. (Joint venture, Contract manufacturing, Licensing)
a) Agreement with a manufacturer of foreign country to get the products produced.
b) A contractual arrangement to access the patent ortechnology of a firm for producing goods in foreign country.
c) Establishing a firm jointly with a foreign partner.
Answer:
a) Contract manufacturing
b) Licensing
c) Joint venture

Question 22.
Briefly explain the objectives of International Monetary Fund.
Answer:
Objectives of International monetory fund (IMF)

• To provide international monetary cooperation through a permanent institution.
• To facilitate expansion of balanced growth of international trade and to promote and maintain high levels of employment.

Answer the following question which carries four scores. (4 × 1 = 4)

Question 23.
Match the following

Answer:

Answer any two from question numbers 24 to 26. Each carries four scores. (2 × 4 = 8)

Question 24.
A Business Organization join hands with anotherone for mutuaf benefits.
a) Name the type of a business referred here.
b) Describe any three benefits of it.
Answer:
a) Joint ventures
b) Benefits of joint ventures

• Since the local partner also contributes to the equity capital, the international firm has less fi¬nancial burden to expand the business globally.
• It helps to execute large projects requiring huge capital outlays and manpower.
• The foreign business firm benefits from local partner’s knowledge of the host countries.
• The foreign business firm shares cost and risks with local partner. So they can enter into foreign market very easily and without high risk.

Question 25.
Distinguish between goods and services.
Answer:

Question 26.
Mithra opines that e-Business and e-Commerce are the same. Do you agree with her? Justify your answer.
Answer:
a) No, I do not agree with the statement
b)

Answer any three from question numbers 27 to 30. Each carries five scores. (3 × 5 = 15)

Question 27.
Explain briefly the multiple objectives of a business.
Answer:
Multiple Objectives of Business:
The main objectives of a business are:
a) Market standing:-A business firm can succeed only when it has a good market standing. Market standing refers to the position of an enterprise in relation to its competitors.
b) Innovation: Innovation means developing new product or services or finding new ideas and new methods of production and distribution. Innovation accelerates the growth of an enterprise.
c) Productivity: Productivity is ascertained by comparing the value of output with the value of input. Every enterprise must aim at greater productivity through the best use of available resources.
d) Physical and financial resources: The business must aim at maximum utilization of available physical and financial resources, i.e. men, material, money and machine in the best possible manner.
e) Earning Profit: Earning maximum profit is the primary objective of every business. Profit is required for survival and growth of a business.

Question 28.
Write notes on different kinds of social responsibilities of a business.
Answer:

1. Economic responsibility: The primary social responsibility of a business is to produce goods and services that society wants and sell them at a profit.
2. Legal responsibility: Every business has a responsibility to operate within the laws of the land.
3. Ethical responsibility: This includes the behavior of the firm that is expected by the society but not included in law. Eg. Respect religious sentiment and dignity of people while advertising.
4. Discretionary responsibility: This refers to voluntary obligation that an enterprise assumes.
   Eg. Giving charitable contributions to educational institutions, helping the people in natural calamities etc.

Question 29.
What is meant by Memorandum of Association? Explain any four clauses.
Answer:
Memorandum of Association: It is the charter or Magna Carta of the company. It defines the objects of the company and provides the framework beyond which the company cannot operate. It lays down the relationship of the company with outside world.

Memorandum of Association must be printed, divided into paragraphs, numbered consecutively. The Memorandum of Association must be signed by at least seven persons in case of a public company and by two persons in case of a private company.

Contents of Memorandum of Association

• Name clause
• Situation Clause
• Objective Clause
• Liability Clause
• Capital Clause
• Association Clause

Question 30.
Describe the services rendered by wholesalers to the manufacturers.
Answer:
Services of Wholesalers to Manufacturers:
1. Facilitating large scale production: As the wholesalers place bulk orders, the producers are able to undertake production on a large scale and take advantages of economies of scale.
2. Risk bearing: Wholesaler deals in goods in their own name and bear variety of risks such as the risk of fall in prices, theft, pilferage spoilage, fire etc.
3. Financial assistance: Wholesalers provide financial assistance to the manufacturers by making cash payment for the purchased goods.
4. Expert advice: Wholesaler provide various useful information regarding the customer preference, market conditions etc to the manufacturer.
5. Help in marketing function: As the wholesalers place bulk orders, it relieves the producer from many marketing activities and he can concentrate on production.

Answer any two from question numbers 31 to 33. Each carries eight scores.(2 × 8 = 16)

Question 31.
Mr. Mohammed and Mr. Sajan entered into an agreement to start a business to share profits. Identify the form of business they decided to start. Explain its four merits and three limitations.
Answer:
a) It is a partnership business

b) Merits of Partnership

• Easy formation and closure: A partnership firm can be formed and closed easily without any legal formalities.
• Balanced decision making: In partnership, decisions are taken by ail partners. So they can take better decisions regarding their business.
• Division of labor: Division of labor is possible .in partnership firm. Duties can be assigned to different partners according to their ability.
• Large funds: In a partnership, the capital is contributed by a number of partners. So they can start business on a large scale.

c) Limitations of Partnership

• Unlimited liability: The partners of a firm have unlimited liability. The partners are jointly and individually liable for payment of debts!
• Limited resources: There is a restriction on the number of partners. Hence capital contributed by them is also limited.
• Possibility of conflicts: Lack of mutual understanding and co-operation among partners may affect the smooth working of the partnership business.

Question 32.
Explain the major functions of Commercial Banks in India.
Answer:
Functions of Commercial Banks
1. Acceptance of deposits: A commercial bank accepts following types of deposits. They are

• Current deposit: This type of account is usually opened by busjness men. It carries no interest. There are no restrictions on number of deposits or withdrawals.
• Savings deposit: Savings accounts are for encouraging savings by individuals. Banks pay rate of interest as decided by RBI on these deposits. Withdrawal from these accounts has some restrictions.
• Fixed deposit: Fixed accounts are time deposits with higher rate of interest. They cannot be withdrawn before the maturity period.

2. Lending of funds: The second important function of a commercial bank is to grant loans and advances out of the money received through deposits. These advances can be made in the form of overdrafts, cash credits, discounting trade bills, term loans, consumer credits and other miscellaneous advances.

• Cash Credit: Under this arrangement, the bank advances loan up to a specified limit against current assets. The bank opens an account in the name of the borrower and allows him to withdraw the money up to the sanctioned limit. Interest is charged on the amount actually withdrawn.
• bank Overdraft: Overdraft is an arrangement where customers are allowed to withdraw up to a level over and above their deposits in the current account. Interest is to be paid only on the actual amount of overdraft availed by him. OD is granted to businessmen against their current account.
• Discounting of bill of exchange: Under this, a bank gives money to its customers on the security of a bill of exchange before the expiry of the bill after deducting a small amount of discount.
• Term Loans: These loans are provided by the banks to their customers for a fixed period. Interest will be charged to the entire amount of loan.

3. Secondary Functions: The secondary functions of commercial banks are as under:
a) Agency Functions:

• Cheque facility: Bank collects customers cheque drawn on other bank. There are two types of cheques mainly
  Bearer cheques, which are encashable immediately at bank counters Crossed cheques which are to be deposited only in the payees account.
• Payment of insurance premium, telephone charges, collection of dividend etc.
• Purchase and sale of shares and debentures
• Acting as trustees or executors
• Providing credit information

b) General utility services:

• Providing lockers for safe custody of jewellery and others valuables of customers
• Issuing letter of credit, pay orders, bank draft, credit cards, traveller’s cheques to customers.
• Underwriting issues of shares and debentures
• Providing foreign exchange to importers and traveller’s going abroad.

Bank Draft: It is a financial instrument with the help of which money can be remitted from one place to another. The payee can present the draft on the drawee bank at his place and collect the money. Bank charges some commission for issuing a bank draft.

Pay Order: It is almost like a bank draft. Banks issue pay order for local purpose and issue bank draft for outstations.

Question 33.
Explain the various external sources of finance available for Joint Stock Companies in our country.
Answer:
SOURCES OF FINANCE:
Issue of shares – (Equity and Preference Shares):
Ploughing Back of Profit
Issue of debentures
Loan from Commercial bank
Loan from Financial institutions
Public deposits
Lease Financing

Long Term and Medium Term Sources of Finance:

• Short Term Sources of Finance
• International Sources of Finance

A business can raise funds from various sources. They are:
Issue of shares: The capital of a company is divided into smaller units called share. Those who subscribe the shares of a company are known as ‘shareholders’. Two types shares may be issued by a company to raise capital. They are:
a. Equity Shares
b. Preference Shares

a) Equity Shares: Equity shares represents the ownership capital of a company. They do not enjoy any preferential right in the matter of claim of dividend or repayment of capital. Equity shareholders do not get a fixed dividend but are paid on the basis of earnings by the company. They bear the maximum risk. Equity shareholders are the owners of the company. They have right to vote and participate in the management.

b) Preference Share: The capital raised by issue of preference shares is called preference share capital.

Retained Earnings (Ploughing Back of Profit): A company generally does not distribute all its earnings amongst the shareholders as dividends. A portion of the net earnings may be retained in the business for use in the future. This is known as retained earnings. It is a source of internal financing or self-financing or ’ploughing back of profits’.

Debentures: A debenture is a document issued by a company under its seal to acknowledge its debt. Debenture holders are, therefore, termed as creditors of the company. Debenture holders are paid a fixed rate of interest.

Public Deposits: The deposits that are raised by organisations directly from the public are known as public deposits. Rates of interest offered on public deposits are usually higher than those allowed by commercial banks. Companies generally invite public deposits for a period up to three years. This is regulated by the R.B.I. and can not exceed 25% of its paid up share capital and reserves.

Commercial Banks: Commercial Banks give loan and advances to business in the form of cash credit, overdraft, term loans, discounting of bills, letter of credit etc. Rate of interest on loan is fixed.

Financial Institutions: The state and central government have established many financial institutions to provide finance to companies. These institutions aim at promoting the industrial development of a country, these are also called ‘development Bank’. These are IFCI, ICICI, IDBI and LIC, UTI. This source of financing is considered suitable when large funds for longer duration are required for expansion, reorganization and modernization of an enterprise.

Trade Credit: Trade credit is a short term source of financing. The credit extended by one trader to another for purchasing goods or services is known as trade credit. The terms of trade credit vary from one industry to another and are specified on the invoice. Trade credit facilitates the traders to purchase goods without immediate payment.

Factoring: Factoring is a method of raising short-term finance for the business in which the business can take advance money from the bank against the amount to be realised from the debtors. By this method, the firm shifts the responsibility of collecting the outstanding amount from the debtors on payment of a specified charge.

Lease Financing: A lease is a contractual agreement whereby the owner of an asset (lessor) grants the right to use the asset to the other party (lessee). The lessor charges a periodic payment for renting of an asset for some specified period called lease rent.

Commercial Paper (CP): It is an unsecured promissory note issued by a firm to raise funds for a short period. The maturity period of commercial paper usually ranges from 90 days to 364 days. Being unsecured, only firms having good credit rating can issue the CP and its regulation comes under the purview of the Reserve Bank of India.

Plus One Business Studies Previous Year Question Papers and Answers

Kerala Plus One Economics Improvement Question Paper say 2018 with Answers

Time Allowed: 2^1/2 hours
Cool off time: 15 Minutes
Maximum Marks: 80

General Instructions to Candidates :

• There is a ‘cool off time’ of 15 minutes in addition to the writing time of 2^1/2 hrs.
• You are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read questions carefully before you answering.
• All questions are compulsory and only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures and graphs should be shown in the answer sheet itself.
• Malayalam version of the questions is also provided.
• Give equations wherever necessary.
• Electronic devices except non-programmable calculators are not allowed in the Examination Hall.

Answer Question Number 1, which carries 5 scores. (1 × 5 = 5)

Question 1.
Match the columns ‘B’ and ‘C’ with column ‘A’.

Answer:

Answer all questions from question numbers 2 to 6. Each carry 1 score. (5 × 1 = 5)

Question 2.
The stage of demographic transition prevailed in India before 1921 was ………….
a) First stage
b) Second stage
c) Third stage
d) None of these
Answer:
a) First stage

Question 3.
Operation flood is connected with ………….
a) Fish production
b) Food grains production
c) Milk production
d) Vegetables production
Answer:
c) Milk production

Question 4.
Non-sampling error can be minimized by taking …………
a) Small sample
b) large sample
c) medium sample
d) none of these
Answer:
Any answer

Question 5.
Frequency distribution of two variables is known as ………….
a) Univariate distribution
b) Bivariate distribution
c) Multivariate distribution
d) None of these
Answer:
b) Bivariate distribution

Question 6.
The index number is used in India to measure the changes in retail prices.
a) Consumer price index
b) Wholesale price index
c) Producer price index
d) None of these
Answer:
a) Consumer price index

Answer all questions from question numbers 7 to 11. Each carry 2 scores. (5 × 2 = 10)

Question 7.
Now India is one of the industrially growing economies in the world. In the light of this, analyze the state of industrial sector during the British Period in India. Answer:
Answer:
During the British period, the condition of industrial sector was very poor because they tried.

• To turn India into a market of finished products of those industries which were established in Britain.
• To reduce India to a status of a mere exporter of important raw materials for the industries in Britain.

Question 8.
Unemployment is one of the major hurdles in India’s growth path. In this context, differentiate the concepts of open unemployment and disguised unemployment.
Answer:
Open unemployment: It refers to that situation in which the worker is willing to do work yet he does not get work.

Disguised unemployment: In this case the number of people engaged in a work is more than what is needed for the work. They do not contribute to productive work and even if withdrawn do not result in a fall in output.

Question 9.
National Sample Survey Office (NSSO) is a national level agency to collect process and tabulate the statistical data. Find the other two national level agencies.
Answer:
CSO, RGI, Labour bureau, DGCIS (Any two)

Question 10.
Statistics is an indispensable tool for an economist. It helps him to understand an economic problem. List the other two uses.
Answer:

1. Statistics helps an economist to present economic facts in a precise and definite form.
2. It plays a major role in the formulation plans and policies of the government.

Question 11.
India and Pakistan followed similar development strategies in many areas. Identify any four.
Answer:
Development strategies of India and Pakistan are similar which are given below.
India:

• Mixed economy
• Five year plan
• Encourage FDI
• Direct tax reduced

Pakistan:

• Mixed economy
• Five year plan
• Encourage FDI
• Direct tax reduced

Answer any 6 questions from question numbers 12 to 18. Each carries 3 scores. (6 × 3 = 18)

Question 12.
The Government of India has replaced planning commission with a new institution named NITI Aayog (National Institution for Transforming India). Economic planning should have some clearly specific goals. Briefly analyze any three major goals of economic planning.
Answer:
NITI Aayog should have some goals which are:

• Growth
• Equity
• Modernisation
• Self-reliance

Growth:
It refers to an increase in the productive capacity of a country. GDP is the generally used indicator of growth. In India the share of agriculture has been declining over the years and that of service sector has been rising.

Equity:
Growth, modernisation and self-reliance can be meaningful only if the fruits of development are equitably shared between all the sections of the population.

Modernisation:
Modernisation means adoption of modern technologies with the view to increase production and productivity.

Self-reliance:
Self-reliance means ability to depend on one self. India adopted the policy of import substitution.

Question 13.
Census method and sampling survey are generally used to collect the data. Being an economics student, point out the three merits of census method.
Answer:
Census method generally used to collect the data. The important merits are given below:

• More reliable and accurate
• Useful for further study
• Each unit is studied

Question 14.
Draw a pie diagram based on the following data.

Answer:

Question 15.
Calculate the simple aggregative price index.

Answer:

Question 16.
The following are the steps towards making a project. Arrange them orderly.
Choice of target group, conclusion, organization and presentation of data, analysis and interpretation, Collection of data. Identifying a problem on an area of study.
Answer:
Identifying the problem

• Choice of target group
• Collection of data
• Organisation and presentation of data analysis and interpretation
• Conclusion

Question 17.
The Government of India adopted three-dimensional approach to attack the poverty in the country. Briefly analyze the third approach of “Provide minimum basic facilities to the people.”
Answer:
The third approach adopted in India to address the issue of poverty was through provision of minimum basic amenities to the people. The approach was adopted from the fifth plan onwards. It involves making public expenditure in areas like education, health, sanitation etc. with a view to improve the standard of living of the poor.

Under this approach there are three programmes to improve nutritional status of poor households. 1 PDS, 2 CDS and 3 Mid-day meal Scheme (MDMS). Many social security programmes were also launched to provide financial security to elderly people, poor women and widows.

Question 18.
Majority of the workers in India are in informal economy, also referred to as an unorganized sector. Specify the workers under organized and unorganized sectors and also point out the social security benefits under organized sector.
Answer:
All the public sector astablishments and these private sector establishments which employ 10 hired workers or more called formal sector establishments and those who work in such establishments are formal sector workers. All other enterprises and workers working in those enterprises form the informal sector, eg: Informal sector: Agricultural laboures.

There are benefits in the formal sector. Some of them are:

• Those who are working in the formal sector enjoy social security benefits.
• They earn more than those in the informal sector.
• Developmental planning envisaged that the economy grows. More and more workers would become formal sector workers and the proportion of workers engaged in the informal sector would dwindle.

Answer any 4 questions from 19 to 23. Each carries 4 scores. (4 × 4 = 16)

Question 19.
Poverty means not having enough money for basic needs such as food, drinking water, shelter or toilets.
Briefly explain the major causes of poverty in India. How do you measure it?
Answer:
Causes of poverty:
Poverty in India can be attributed to a number of socio-economic and political factors.

• Rapid growth of population
• Over dependence on agriculture sector
• Low productivity in agriculture sector
• Stagnation in Industrial sector
• Backwardness in health care sector
• Less growth in infrastructure
• Inequalities in the distribution of wealth and income
• Inefficiencies in the implementation of poverty eradication programmes

Measures of poverty:

• Jail cost of living method
• Head count poverty ratio
• Sen Index
• Squared poverty Gap

Question 20.
Under the various articles of the Indian Constitution, free and compulsory education is provided as a fundamental right to children between the ages of 6 and 14. On this context, analyze the education sector in India.
Answer:
In December 2002. the Government of India through the 86th Amendment of the constitution, education included in fundamental rights. Accordingly the state shall provide free and compulsory education to all children of the ageof6-14years. In 2009, Government also passed a law on education rights.

There is a need to step up expenditure at all the levels of education to bring about a balance at various levels. Moreover government has also introduced many loan schemes for promotion of higher education.

Large scale achievements made in the education sector in India after independence.

Question 21.
Rural development is the process of improving the quality of life and economic well being of people living in rural areas. Specify the areas which are challenging and need fresh motives for rural development. Elucidate.
Answer:
There are some areas challenging for rural development so we have to improve the following areas. Agriculture diversification is a system of farming that encourages production of a variety of plant and animals and their products. Non-farm employment

provides greater income stability. Majority of small and marginal farmers cultivate mainly low value subsistence crops. Commercialisation and diversification of small farmers within and outside agriculture with local and global markets.

This is helpful not only in liberating the small and marginal farmers from the poverty trap, but also to meet the country’s growing demands for fruits, vegetables, milk and milk products, meat, fishes, eggs etc. which generally show rising trends with increasing levels of per capita income in the economy.

Question 22.
Convert the inclusive method into exclusive method in the table given below and fill up the other columns based on the exclusive classes.

Answer:

Question 23.
The following table shows the scores obtained by 5 dancers in a dance competition. Find the rank correlation coefficient.

Answer:

Answer any 2 questions from 24 to 26. Each carries 5 scores. (2 × 5 = 10)

Question 24.
Draw a multiple bar diagram.

Answer:
Multiple Bar Diagram:

Question 25.
The Government of India started an economic reform in 1991. After 25 years of its inception, being a student of Economics analyze the impact of economic reforms in the sectors of agriculture and industry in India.
Answer:
The impact of economic reforms in the sectors of agriculture and industry in India are given below: Agricultural sector appears to be adversely affected by the reform process. The agricultural sector has not been able to be benefited by the reform process rather the growth rate has decelerated. Public investment in agriculture sector has been reduced during the reform period further the removal of fertilizer subsidy severely affected the small and marginal farmers.

Due to commencement of WTO a lot of policies have changed which have adversely affected the Indian farmers. Moreover because of export-oriented policy in agriculture there has been a shift from production for the domestic market towards production for export mark focusing on cash crops instead of food grains. This has resulted in the price rise of food grains.

In short India’s agricultural sector is badly affected by the reform process.
The industrial sector has performed poorly during reform period due to the reasons are:

1. Shortage of electricity and raw materials affect the duality of goods produced.
2. New economic policy has seriously affected the local industrial production.

However the government has also made attempts to improve the efficiency of PSUS by giving them autonomy in taking managerial decisions.

Question 26.
Energy is one of the major inputs for economic development. Prepare a note on the conventional and non-conventional sources of energy and their consumption in India.
Answer:
There are mainly two types of energy. Commercial source of energy and Non-commercial energy. The energy used for commercial purpose – this is known as commercial source of energy, eg. coal, petroleum and electricity. Non commercial sources of energy are firewood, agricultural waste and dried dung. Commercial sources of energy are generally exhaustible. Non commercial sources are generally renewable.

Non-conventional sources of Energy:
Both commercial and non commercial sources of energy are known as conventional sources of energy. There are three other sources of energy which are commonly termed as non-conventional sources – solar energy, wind energy and tidal power.

Power / Electricity:
The most visible form of energy whcih is often identified with progress in modern civilization, is power, commonly called electricity. It determines the economic development of a country.

Answer any 2 questions from 27 to 29. Each carries 8 scores. (2 × 8 = 16)

Question 27.
Environment and sustainable development are inter-connected. The environmental issues arise due to the developmental activities in the country which directly threatens India’s environment. Explain.
(Hints: Sustainable development, India’s environment, Global warming, Ozone, Depletion, Pollutions etc.)
Answer:
The concept of sustainable development was emphasized by the United Nations Conference on Environment and Development (UNCED), which define it as: ‘Development that meets the need of the present generation without compromising the ability of the future generation to meet their own needs.’

State of India’s Environment:
India has abundant natural resources in terms of rich quality of soil, hundreds of rivers and tributaries, lush green forests, plenty of mineral deposits beneath the land surface, vast stretch of the Indian ocean, ranges of mountains etc. However, the developmental activities in India have resulted in pressure on its finite natural resources. Besides creating impacts on human health and well-being.

Global Warming:
Global warming is the gradual increase in the average temperature of the earth’s lower atmosphere as a result of the increase in greenhouse gases.

Pollution:
There are different types of pollutions existing in environment which are given.
1. Air pollution:
Increase in number of vehicles and industrialisation are the major contributors of air pollution. The gases like Carbon dioxide, Carbon monoxide, Sulphur dioxide etc. emitted from factories and motor vehicles and dust particles directly contributes air pollution. This is caused by over population.

2. Water Pollution:
Both population growth and urbanisation causes not only less availability of fresh water but also it is a cause for water pollution. Waste disposal from factories to water bodies due to large scale industrialisation pollutes water. Similarly, overuse of chemical fertilizers and pesticides in the agriculture sector also causes water pollution.

The main reason for global warming is carbon dioxide. It is being released into the atmosphere through the burning of fossils, fuels, methane, nitrous oxide, chloro fluro carbon etc. are greenhouse gases. Nitrous oxide is spread into the atmosphere through the smoke released from vehicles.

Ozone Depletion:
The protective covering of earth lies above 12 miles altitude from the surface of earth is called ozone layer. This layer protects the biosphere from harmful ultra violet radiation from the sun. The ozone depletion is mainly caused by high levels of atomic chlorine and atomic bromine found in the atmospheric layer.

The origin of these compounds are chlorofluro carbons. They are known as Freons. They are used in air conditioners, refrigerators, sprays, etc.

An agreement was signed at Montreal in Canada for the protection of ozone layer. This agreement discourage the use of CFC compounds which is harmful for the ozone layer.

Question 28.
Calculate the Arithmetic Mean, Median and Mode from the following data.

Answer:


Median = Value of 20th item
Since 20 is not there in c.f. we take 21. Hence median is value of 21st item. i.e., Median = 60
So Median = 21

iii) Mode:
Here 15 is the highest frequency. The variable equivalent to the frequency is 50. So 50 is the mode.

Question 29.
Calculate the standard deviation and coefficient of variation from the following data.

Answer:

Plus One Economics Previous Year Question Papers and Answers

Plus One Business Studies Model Question Papers Paper 3 are part of Plus One English Previous Year Question Papers and Answers. Here we have given Plus One Business Studies Model Question Papers Paper 3.

Plus One Business Studies Model Question Papers Paper 3

General Instructions

• There is a ‘cool off time’ of 15 minutes in addition to the writing time of 2 hrs.
• You are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read questions carefully before you answering.
• All questions are compulsory and the only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures, and graphs should be shown in the answer sheet itself.
• Malayalam version of the questions is also provided.
• Give provided wherever necessary.
• Electronic devices except non-programmable calculators are not allowed in the Examination Hall.

Answer the following questions from 1 to 9. Each carries 1 score.

Question 1.
Business activities are undertaken primarily to …………..

a. Earn profit

b. Have recognition

c. Fulfill social obligation

Question 2.
Provision of residential accommodation to the member at a reasonable rate is the objective

a. Producers cooperative

b. Consumers cooperative

c. Housing cooperative

d. Credit cooperative

Question 3.
Which of the following cannot be classified as an auxiliary to trade’?

a. Mining

b. Insurance

c. Warehousing

d. Transport

Question 4.
Mortality is to be enforced in an establishment by the ………………

a. Top level management

b. Middle-level management

c. Low-level management

d. Employees at all levels

Question 5.
Preliminary contracts are signed

a. before the incorporation

b. after incorporation but before the capital subscription

c. after incorporation but before the commencement of business
d. after the commencement of business

Question 6.
……………….. is the last link in the channel of distribution of goods and services

a. Wholesale

b. Retailer

c. Producer

d. Customer

Question 7.
Public deposits are the deposits that are raised directly from

a. The public

b. The director

c. The auditors

d. The owner’s

Question 8.
An arrangement to acquire the right use an asset without owing is called

a. Factoring
b. Leasing
c. Financing
d. Warehousing

Question 9.
ADRs are issued in

a. Canada
കാനഡ
b.China again

c. India

d. USA

Answer any 6 questions from 10 to 16. Each carries 2 scores.

Question 10.
Write any two merits of lease financing.

Question 11.
Explain the concept of discretionary responsibility.

Question 12.
Name the following partners.
a. A partnership firm informs its customers that Mr. Ramesh is its partner. From the customers, Mr. Ramesh comes to know about it. But he does not deny it.
b. Vinod is a partner who hasn’t invested any money and does not take part in any activity.

Question 13.
Write a short note on NABARD.

Question 14.
Certain retailers do not have any fixed place of business to conduct the trade. State any two characteristics of them.

Question 15.
Find the business models from the following.

a. Customers making toll free calls through call centers to inquire about the product of a company

b. CIAL Tech Ltd. .uses a network of computers for monitoring delivery of components to the suppliers

Question 16.
A cooperative society is a voluntary association of persons who join together with the motive of the welfare of the members. State any two merits of a cooperative society.

Answer any 4 questions from 17 to 21. Each carries 3 scores.

Question 17.
How does a cooperative society exemplify democracy and secularism? Explain.

Question 18.
Compare the status of minor in joint Hindu family business with that in a partnership firm.

Question 19.
Write any two limitations of business.

Question 20.
The management of Thottam Plantation decided to set apart 10% of their profits for the education of students belonging to weaker sections. Identify the type of social responsibility referred here. Also, write three points of arguments for social responsibility.

Question 21.
For buying and selling of goods within the boundaries of a country mainly two intermediaries are involved. Write two services each provided by these intermediaries to the producers.

Answer the following questions which carry 4 scores.

Question 22.
Match the following:

Answer any 3 questions from 23 to 26. Each carries 4 scores.

Question 23.
Kochi Metro rail corporation Ltd. Engaged in the construction of Kochi metro by joining together with the government of Kerala What are the advantages of such venture?

Question 24.
Modern means of communication helps in making the exchange of ideas and information faster. Explain the modern means of communication.

Question 25.
Miss Lindzy approaches you with the intention of subscribing to shares in a private limited company. She wants to know the privileges enjoyed by a private limited company. Can you help her?

Question 26.
“ High profit-making institutions are beneficial not only to the businessmen but also to the society”. Comment on the above statement both from the point of view of the businessman and the society.

Answer any 3 questions from 27 to 30. Each carries 5 scores.

Question 27.
Explain the term marine insurance and also explain the types of marine insurance.

Question 28.
A commerce teacher, while going through the topic, “ Internal Trade”. Cites the examples of ‘Bata Shoe Company’ having its headquarters in Mumbai where if it has its showrooms at different locations of the city as well as in various cities all over India. The products of the company carry the same price in all these showrooms. Identify the type of shop cited in the example. List any five features of such shops.

Question 29.
Do you welcome the opening of the Indian retail market to multinationals like Walmart, McDonald’s etc?

Question 30.
Suppose, a public enterprise is established in your district. As an e-commerce student, can you compare the various features of the three forms of public enterprises?

Answer any 2 questions from 31 to 33. Each carries 8 scores.

Question 31.
Mr. Manoj is running a ladies store. As he has no business partners in the shop, he appointed two more ladies to assist him in trading activities for a salary of Rs. 2,000 per month. Identify this business organization State any four advantages and three disadvantages of the organization.

Question 32.
The newly established Eastern valley Ltd., require a huge volume of finance for establishing their business. A wide variety of sources of funds are available for them. Advice the finance department about the factors to be considered before selecting the suitable sources.

Question 33.
Seetharam & sons Pvt.Ltd and Krishna Sagar Ltd. are two companies incorporated in India. Identify the types of companies. Differentiate between the two types of companies

Answers

Answer 1.
a. Earn profit
ലാഭം നേടുക

Answer 2.
c. Housing cooperative

Answer 3.
Mining

Answer 4.
Employees at all levels

Answer 5.
before the incorporation

Answer 6.
b.Retailer

Answer 7.
The public

Answer 8.
Leasing

Answer 9.
USA

Answer 10.

• It provides finance without diluting the ownership or control of a business
  
• It does not affect the debtor raising of an enterprise.
  

Answer 11.
Discretionary Responsibility

This refers to purely voluntary obligation that an enterprise assumes for instance providing charitable contribution to educational institutions or helping the affected people during floods or earthquakes.

Answer 12.
a. Partner by holding out
b. Nominal partner

Answer 13.
National Bank for Agriculture and Rural Development (NABARD)
NABARD was set up in 1982 to promote integrated rural development. It has been adopting a multipronged, multipurpose strategy for the promotion of rural business enterprises in the country.

Answer 14.
Characteristics of if itinerant retailers
a. Deals in daily use consumer products.
b. Supply of products of doorsteps etc.

Answer 15.
a. C2B
b. B2B.

Answer 16.
a. Large funds
b. Share of risk

Answer 17.
AH, a feature of the cooperative society lends it to a democratic character. Further, the membership of a cooperative society is open to all, irrespective of their religion, caste, and gender. The cooperative society through its purpose lays emphasis on the values of mutual help and welfare. These features prove the secular nature of cooperative societies.

Answer 18.
A person becomes a member of a joint Hindu family business when he takes birth in such a family. All minors the family are coparceners in the family business. A partnership is based on a legal contract between partners. Since the minor is incompetent for entering to a valid contract, minor cannot be a partner of a partnership firm, but minor can be appointed as a beneficiary of a partnership firm.

Answer 19.

1. It lacks a personal touch with customers.
   
2. Incongruence between order taking and order fulfillment speed.
   

Answer 20.
Discretionary Responsibility

This refers to purely voluntary obligation that an enterprise assumes, for instance, providing a charitable contribution to an educational institute or helping the affected people during floods or earthquakes,

Arguments for Social Responsibility.

1. The justification for existence and growth

Business exists for providing goods and services to satisfy human needs. Though profit motive is an important justification for undertaking a business activity,

2. The long-term interest of the firm

A firm and its image stand to gain maximum profits in the long run when it has its highest goal as service to society. When an increasing number of members of society, including workers, consumers, shareholders, government official feel that business enterprise is not serving its best interest, they will tend to withdraw their cooperation to the enterprise concerned.

Answer 21.
Services of wholesalers

1. Services to manufacturers:

a. Facilitate large-scale production;

Bulk orders from wholesalers enable the producers to take the production on a large scale and take advantages of economies of scale.

b. Bearing risk

The wholesaler deals in goods in its own name and takes the risk of loss or damage in storage and transit.

c. Financial assistance

Wholesalers provide financial assistance to manufacturers means they make ready cash payment for purchases and even advance money to producers.

Services to retailers :

a. Availability of goods

The wholesalers make the products Real owner Fixed percentage of interest No voting rights International source of finance various manufacturers readily available to the retailers.

b. Marketing support

The wholesalers perform various marketing functions and provide support to retailers.

C. Grant of credit

Answer 22.

Answer 23.
Government company

A government company is established under the Indian Companies Act, 1956 and is registered and governed by the provisions of the Indian Companies Act. According to the Indian Companies Act 1956, a government company means any company in which not less than 51 percent of the paid up capital is held by the central government, or partly by central government and partly by one or more state governments.



Features

1. It is an organization created by the Indian companies act,
   
2. It can obtain funds from government shareholdings
   
3. It can enter into a contract.
   
4. It can acquire property in its own name.
   
5. Its management is regulated by the provisions of the companies act.
   

Answer 24.
1. Fax

The printed, a message is converted into electronic signals as the paper rolls through the fax machine. This message is received in the same format the other end on the paper roll that is attached to the machine.

2. Internet & E-mail

The Internet is an international computer network that links computers from sectors such as government agencies business houses, educational institution, stores it and allows it to be read on satisfying certain conditions.

3. Video conferencing and Teleconferencing
This mode of communication begins in Teleconferencing. A number of telephones are simultaneously connected to one another. Teleconferencing is a facility enabling people in different parts of the world to have an audio meeting, saving on transit time and hotel stay.

4. Video conferencing

It is the closest it gets to seeing and hearing one another without being present together technologies used in a video conference area monitor, screen, microphone, camera etc.

5. Voicemail

Voicemail is a form of email only. Here, a message, instead of being communicated in a written is sent in the form of voice of the caller.

Answer 25.
Privileges of a private company

1. A private company can be formed by only two members. Andiamo.
   
2. There is no need to issue a prospectus.
   
3. Allotment of shares can be done without receiving the minimum subscription,
   
4. It can start a business as soon as it receives the certificate of incorporation.
   
5. It needs to have only two directors
   
6. It is not required to keep an index of members
   
7. There is no restriction on the amount of loan to the directors of a private company.
   

Answer 26.
From the viewpoint of business

1. Profit is necessary for the survival of the business.
2. Profit increases the efficiency of a business.
3. Profit accelerates the pace of growth.
4. Profit builds a good image of the business.
5. Profit brings prosperity to the business.
6. Profit is a reward for the risk borne by the businessman.

From the viewpoint of society

1. Society gets quality products at reasonable prices.
2. Employees will get better remuneration, good working condition etc
3. A profitable business enterprise generates more employment opportunities
4. A profitable business concern can undertake various community development programmes.

Answer 27.
Classification of marine insurance

1. Ship or hull insurance
   
   When a ship is insured against marine hazards it is known as hull insurance.
   
2. Cargo insurance
   
   Marine insurance that covers the risk of loss of cargo is known as cargo insurance.
   
3. Freight insurance
   
   Insurance of the risk of loss of freight is known as freight insurance,
   

Answer 28.
Chain stores or multiple shops:

It is a system of branch shop operating under centralized management and dealing in a similar line of products. The central office is called head office. Branches are located all over the world.

Features of multiple shops

• As there is centralized procurement they enjoy economies of scale
  
• By selling directly to the consumers they eliminate unnecessary middlemen on the sale of goods and services
  
• Since sales are made in cash basis no bad debts occurred
  
• It reduces the chance of dead stock by transferring the same to branch in another locality where it is in demand
  

Answer 29.
Global enterprises or Multi-National Corporations (MNCs)

Global enterprises are huge industrial organizations which extend their industrial and marketing operations through a net VDC of their branches in several countries. They are characterized by their huge size, a large number of products, advanced technology etc.

Features:

1. Huge capital resources

These enterprises are characterized by ‘ possessing huge financial resources and the ability to raise funds from different sources.

2. Foreign collaboration

Global enterprises can collaborate with companies in the public and private sector

3. Advanced technology

These enterprises possess technological superiorities in their methods of production.

4. Product innovation

They are continuously engaged in developing new products, better quality an superior design of an existing product.

5. Marketing strategies

The marketing strategies of global companies are far more effective than other companies.

6. Expansion of market territory

Their operations and activities extend beyond the physical boundaries of their own country.

7. Centralized control

They have their headquarters in their home country and exercise control over all branches and subsidiaries,

Answer 30.
Public sector enterprises can be organized in the following three forms

1. Departmental undertaking
   
2. Statutory corporations
   
3. Government company
   

1. Departmental undertaking

This is the oldest form of organizing public sector enterprises. It may be run either by the central government or by the state government. They are managed by the government employees and works under the center of a minister.
Eg: Railway, Post and Telegraph etc.

Features:

1. They are financed from the government Treasury.
   
2. They are subject to accounting and audit controls applicable other government activities.
   
3. The employees of the enterprise are government servants.
   

2. Statutory corporations

Statutory corporations are public enterprises brought into existence by a special act of the government. The act defines its powers and functions, rules and regulations governing its employees and its relationship with the government departments.
Eg. LIC, RBI, SBI etc.

Features:

1. Statutory corporations are set up under an act of parliament.
   
2. This type of organization is wholly owned by the state.
   
3. It is a body corporate and can sue and be sued.
   

3 ……. Government company

A government company is established under the Indian Companies Act, 1956 and is registered and governed by the provisions of the Indian Companies Act. According to the Indian Companies Act 1956, a government company means any company in which not less than 51 percent of the paid up capital is held by the central government, or partly by central government and partly by one or more state governments.

Features:

1. It is an organization created by the In. Indian companies act, 1956.
   
2. The company can sue and be sued.
3. It can enter into a contract.
   

Answer 31.
Sole Proprietorship

Sole proprietorship refers to a form of business organization which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risk. A sole proprietor is the one who is the only owner of a business.

Merits:

• Quick decision
  
  A sole trader has full control over affairs of business, so he enjoys a considerable degree of freedom in decision making.
  
• Confidentiality of information
  
  A sole trader can keep all information related to business operations confidential and maintain secrecy.
  
• Direct incentive
  
  A sole trader is the only recipient of all the profit. The need to share profits does not arise as he is the single owner.
  
• It instills Sense of accomplishment and confidence in one’s abilities.
  
• There is ease information as well as the closure of the business
  

Demerits:

• Limited resources
  
  Resources of a sole trader limited to his personal savings and borrowings from others
  
• Limited life of a business concern
  
  The death, insanity, of a sole proprietor, causes discontinuity of business
  
• The owner has unlimited liability
• Limited managerial ability
  
  A sole trader may not be an expert in every aspect of management.
  

Answer 32.
Sources of finance

A company would choose from among various sources of finance depending on the amount . of capital required and the term for which it is needed.

Factors affecting the choice of source of funds

1. Cost of procurement and utilization of funds.
   
2. Financial strength and stability of operation.
   
3. A form of organization and legal status.
   
4. Purpose and time period for which funds are required.
   
5. The risk profile of source of finance.
   
6. Control
   
7. Effect on creditworthiness
   
8. Flexibility and ease of obtaining funds.
   
9. Tax benefit.
   

Answer 33.
Types of companies

1. Private company A private company means a company which

• Restrict the right of members to transfer its share.
  
• Has a minimum of 2 and a maximum of 50 members.
  
• Does not invite the public to subscribe to its share capital
  
• Must have minimum up paid capital of Rs.llakh
  

Public company

A public company means a company which is not a private company. As per Indian companies act a public company is one which

• Has a minimum paid-up capital of Rs. 5 lakhs
  
• Has a minimum of 7members and no limit on maximum member
  
• Has no restriction on transfer of share
  
• Is not prohibited from inviting the public to subscribe to its share capital or public deposits.
  

We hope the Plus One Business Studies Model Question Papers Paper 3 help you. If you have any query regarding Plus One Business Studies Model Question Papers Paper 3, drop a comment below and we will get back to you at the earliest.

Plus One Business Studies Model Question Papers Paper 2 are part of Plus One Business Studies Previous Year Question Papers and Answers. Here we have given Plus One Business Studies Model Question Papers Paper 2.

Plus One Business Studies Model Question Papers Paper 2

General Instructions

• There is a ‘cool off time’ of 15 minutes in addition to the writing time of 2 hrs.
• You are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read questions carefully before you answering.
• All questions are compulsory and the only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures, and graphs should be shown in the answer sheet itself.
• Malayalam version of the questions is also provided.
• Give provided wherever necessary.
• Electronic devices except non-programmable calculators are not allowed in the Examination Hall.

Answer the following questions from 1 to 9. Each carries 1 score.

Question 1.
Which of the following does not characteristics of business activity?

a. Production of goods

b. Presence of risk
c. Sale or exchange of goods and services

d. Salary or wages

Question 2.
Place utility is created by ………..

a. Transportation
ഗതാഗതം
b. Insurance

c. persons

d. warehousing
വെയർഹൗസിംഗ്

Question 3.
Social responsibility is

a. Same as legal responsibility

b. Broader than legal responsibility

c. Narrower than legal responsibility

d. None of them

Question 4.
Which among the following banks provide financial assistance, particularly to small business?

a. IDBI
b. ICICI
c. SIDBI
d.IFC

Question 5.
Which of the following documents is not required in connection with an import transaction?

a. Bill of lading

b. shipping bill

c. Certificate of origin
d. Shipment advice

Question 6.
Find the odd one from the following?

a. Huge financial resources

b. Limited liability

c. Compulsory registration

d. Voluntary membership

Question 7.
Which of the form of public sector enterprises is most suitable when national security is concerned?

Question 8.
Which plastic card enables you to buy things even if there is no balance in your account?

a. ATM card
b. Credit card
c. Debit card
d. Kisan card

Question 9.
ADRs are issued in

a. Canada
b. China
c. India
d. USA

Answer any 6 questions from 10 to 16. Each carries 2 scores.

Question 10.
What preferential rights are enjoyed by preference shareholders, explain?

Question 11.
a. Adv. Paul is practicing in the high court.
b. Adv. Rajeev Menon is working as the legal advisor of Karthikaconsultancy Ltd. in which economic activities these two are engaged in explaining both activities with the help of one example.

Question 12.
Compare the status of minor in joint Hindu family business with that in a partnership firm.

Question 13.
This service helps to reduce the impact of loss likely to be caused by uncertain events in business.
a. Identify the name of the service.
b. Write any two principles related to such services.

Question 14.
Explain the concept of outsourcing with the help of an example.

Question 15.
Explain the meaning of mate’s receipt.

Question 16.
“Look after your customers and the rest will follow”. In the light of the above statement, mention any two responsibility of a business firm towards its customers.

Answer any 4 questions from 17 to 21. Each carries 3 scores.

Question 17.
“Social responsibility and business ethics are the two sides of the same coin.” Being a commerce student as well as a citizen, how will you comment on this statement?

Question 18.
Classify the following into public bank, a private bank and foreign bank IDBI, HDFC, HSFC, CITI Bank, AXIS Bank, Canara Bank.

Question 19.
Write any three online payment mechanisms.

Question 20.
Prepare a short note on a different type of promoters.

Question 21.
An Indian company can now raise funds not only from India but also through foreign equity participation. How is it possible? Explain.

Answer the following questions which carry 4 scores.

Question 22.
Match the following:

Answer any 3 questions from 23 to 26. Each carries 4 scores.

Question 23.
What you mean by plowing back of profit. Explain its merits and demerits.

Question 24.
Identify the forms of business organization on the basis of the following definitions.

a. It refers to a form of business organization which is owned, managed and controlled by an individual who is the recipient of all profits and bearer of all risk.

b. It is a voluntary association of persons, who join together with the motive of the welfare of the members.

c. The management and control of the affairs of the company are undertaken by the board of directors.

d. It is the relation between persons who have agreed to share the profits of the business carried on by all or any one of them acting for all.

Question 25.
Mr.George is a planter and trader of spices in Idukki. In the global spices meet held at Kochi, he got an order to export spices to the UK. But he is not aware of the export formalities. Support Mr. George by listing any four steps of the export procedure.

Question 26.
Distinguish between:

1. Equity shares & Preference shares
   
2. Shares & debentures
   

Answer any 3 questions from 27 to 30. Each carries 5 scores.

Question 27.
Explain the scope of international business.

Question 28.
For the smooth conducting of insurance, the insurer and the insured should know the relevant principles underlying the insurance contracts. In light of this statement, can you explain these principles?

Question 29.
A group discussion is scheduled in your class on “ Environmental Pollution and Business.” As a group leader, explain any four major causes of environmental pollution.

Question 30.
Nowadays banking activities can be done even after or before the banking hours. Name the type of service offered by banks in the above context. What are its advantages,

Answer any 2 questions from 31 to 33. Each carries 8 scores.

Question 31.
Explain the merits and demerits of a joint stock company.

Question 32.
Ethical business behavior improves public image, earns public confidence and leads to a greater volume of business. Discuss how a business enterprise can attain their benefits by fostering ethics in their day to day functioning.

Question 33.
These types of shares do not enjoy any preferential rights. The owners of such type of shares the real masters.” Identify these type of shares and explain their merits and demerits.

Answers

Answer 1.
d. Salary or wages

Answer 2.
Transportation

Answer 3.
Broader than legal responsibility

Answer 5.
b. Shipping bill

Answer 6.
a. Huge financial resources

Answer 7.
Departmental undertaking

Answer 8.
Credit card

Answer 9.
USA

Answer 10.
The preference shareholders enjoy a preferential right over equity shareholders in two ways:

• Right to get a fixed rate of dividend,
• Right to claim repayment of capital in the event of winding up of the company.
  

Answer 11.
Adv. Paul- profession
Eg; CA. a sinker is practicing in a CA firm Adv. Rajeev Menon- employment.
Eg; CA. panicker is working as the tax consultant of Samconsultancy ltd.

Answer 12.
A person becomes a member of a joint Hindu family business when he takes birth in such a family. All minors in the family are co-parceners in the family business. A partnership is based on a legal contract between partners. Since the minor is incompetent for entering to a valid contract, minor cannot be a partner of a partnership firm, but minor can be appointed as a beneficiary of the partnership firm.

Answer 13.
a. Insurance
b. Proximate causes
When the loss is the result of two or more causes, the proximate cause for the loss alone will be considered by the insurance company for admitting the claim.


Subrogation
After the insured is compensated for the loss or damage to the property in­sured, the right of ownership of such property passes on to the insurer.

Answer 14.
Outsourcing
BPO (Business Process Outsourcing) is a system of getting business task accom­plished through an outside agency. Eg, transportation of raw materials into the fac­tory may be entrusted to a transport com­pany.

Answer 15.
A mate receipt issued by the commanding officer of the ship when the cargo is loaded on board, and contains the information about the name of the vessel, birth, date of shipment, description of packages, make and numbers, a condition of the cargo at the time of receipt on boar the ship, etc.

Answer 16.
Supply of right quality and quality of goods and services to consume are reasonable prices.

(b) They have the right of information about the product, price, the company etc.

Answer 17.
Business ethics and social responsibilities are closely related. When a business is ethical, it naturally meets its social responsibilities. It is doing justice to all concerned and protecting the business value system. As a socially responsible organization, a business has to follow ethical values towards employees, consumers, government, society etc. Thus social responsibility and business ethics are the two sides of the same coin.

Answer 18.

Answer 19.
a. Cash on Delivery here the payment is made at the time of physical delivery of goods.

b. Cheque here cheque is received and upon realization, the delivery of goods is made.

C. Net-banking transfer modern banking system provides the facility of electronic transfer of funds over the net to the customers.

Answer 20.
a. Professional promoters

They promote a company and hand it over to the shareholders.

b. Occasional promoters

They do promotional work as part of their business.

C. Entrepreneur promoter

They are promoters who conceive the idea of the business enterprise, perform professional activities and finally become part of management.

Answer 21.
Global Depository Receipts (GDR’s)

It is a negotiable instrument issued abroad by an Indian company to rais funds in foreign currency and it is traded on a foreign stock exchange. The local currency shares of a company delivered to depository bank the rafter depository bank issue depository receipts against these shares. Such depository receipts denominated in US dollars are known as GDRs. The holder of GDR can at any time convert it into number of shares it represents. They are entitled to dividend but do not carry any voting rights.

Answer 22.
Payment at the time of delivery – Cash on delivery
Exists in the space – Digital cash
Plastic Money – Credit/Debit card
Out Sourcing – Non core activities

Answer 23.
Ploughing back of profit is also known as retained earnings. A portion of net earnings which are not distributed to shareholders but are retained in the business for use in the future, known as retained earnings

Merits

It is a permanent source of funds available to an organization.

• No cost in the form of interest, dividend.
  
• Greater degree of operational freedom and flexibility
  
• It may lead to increase in the market price of the equity shares of a company.
  

Demerits

• It may cause dissatisfaction, among the shareholders as they would get a lower dividend.
  
• It is an uncertain source of funds as the profits of a business are fluctuating,
  
• It may attract government regulation.
  

Answer 24.
a. Sole proprietorship
b. Co-Operative Societies
c. Joint Stock Company
d. Partnership

Answer 25.
1. Obtaining importer’s, exporters code (IEC) Number

Importers exporters code number should be obtained first. This number should be shown in all export-import documents. Regional Import-Export Licensing Authority issues this number when applied for in the prescribed form.

2. Obtaining registration-cum-membership certificate (RCMC)

This certificate is issued by the Export Promotion Council / Commodity Boards / Federation of Indians Export Organisation / Marine Products Export Development Agency etc. This is needed to obtain facilities, benefits or concessions offered under the Export-Import policy (EXIM Policy). Application in the prescribed form along with the IEC should be submitted for obtaining this certificate.

3. Market Research :
The exporter tries to explore foreign markets by conducting surveys and market research to produce export order.

4. Receiving and confirming the export order

After receiving the export order the exporter gives the confirmation to the importer after careful scrutiny.

5. Manufacturing Goods :
The exporter then manufactures or procures the goods required by the importer. He should adhere to the specifications given by the importer of goods.

Answer 26.

Answer 27.
1. Merchandise exports and imports

Merchandise means goods which are tangible, i.e., those that can be seen and touched. Merchandise exports and imports involve tangible goods and exclude services (intangibles).

2. Service exports and imports

By service exports and imports we mean trade in intangibles, i.e., those that cannot be seen or touched. Because of this intangible nature, trade in services is also known as invisible trade.

3. Licensing and franchising
Permitting a person/ firm in a foreign country to produce and sell goods under your trademarks, patents or copyrights for a fee is another way of operating an international business. Franchising is somewhat similar to licensing with the difference that it is connected with the provision of services.

4. Foreign investments
Foreign investments mean investment abroad in exchange for financial return. Foreign investments can be Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)

Answer 28.
Insurance

Insurance is an agreement between two parties whereby one party undertakes, in exchange for a consideration, to pay the other party an agreed sum of money to compensate the loss, damage or injury caused as a result of some unforeseen events.

A fundamental principle of insurance

The basic principle of insurance is that an individual or business concern chooses to spend a definitely huge amount involved in an indefinite future.

Principles of insurance

1. Utmost good faith

Both the insurer and the insured should display good faith towards each other in ..regard to the contract.

2. Insurable interest

The insured should have an insurable interest in the subject matter of insurance.

3. Indemnity

All the insurance contract except life insurance are a contract of indemnity.

4. Proximate causes

When the loss is the result of two or more causes, the proximate cause for the loss alone will be considered by the insurance company for admitting the claim,

5. Subrogation

After the insured is compensated for the loss or damage to the property insured, the right of ownership of such property passes on to the insurer.

6. Contribution
If the same property is insured with one or more insurer, in case, there is a loss, the insured have no right to recover more than the full amount of his actual loss. The insurers together have to share the losses.

7. Mitigation

This principle states that it is the duty of the insured to take reasonable steps to minimize the loss to the insured property.

Answer 29.
Causes Of Pollution

It must be recognized that all sectors of our society, industry, government, agriculture, mining, energy, transportation, construction, and consumers generate waste. Wastes contain pollutant which are the materials of chemicals that have been discarded during the process of production or consumption.

1. Air Pollution

Air pollution is the result of a combination of factors which lowers the air quality. It is mainly due to carbon monoxide emitted by automobiles which contribute to air pollution.

2. Water Pollution
Water becomes polluted primarily from chemical and waste dumping. For years business enterprises have been dumping waste into rivers. Streams and lakes with little regard for the consequences.

3. Land pollution

Dumping of toxic waste on land causes- land pollution. This damages the quality of land making it unfit for agriculture or plantation. Resting the quality of the land that has already been damaged is a big problem.

4. Noise Pollution

Noise caused by the running of factories and vehicles is not merely a source of annoyance but is also a serious health hazard. Noise pollution can be responsible for many diseases like loss of heaping malfunctioning of the heart and meant cal disorder.

Answer 30.
e-Banking

e-banking is electronic banking or banking using electronic media, e-banking is a service provided bank that allows a customer to conduct t ranking transactions such as checking accounts, applying for loans, or paying b; ills over the internet using a personal computer or mobile phone, e-banking indulge the following services.

Benefits

1. e-banking provides 24 hours, 365 days a year services to the customers of the bank
   
   
2. It lowers the transaction cost.
   
3. Customers can make the transactions from the office., home or while traveling.
   
4. Greater customer satisfaction.
   
5. e-banking, provides a competitive advantage to the bank.
   

Answer 31.
Joint Stock Company
A company is an artificial person having a separate legal entity, perpetual succession, and a Common seal. The capital of the Company is divided into smaller parts called shares which can be transferred freely. The share holder; are the owners of the company. Boar of directors is the managing body elected by share holders.

Merits

a. Limited liability

The shareholders are liable to the extent amount unpaid on the shares held, by them.

b. transfer of interest

Shares of a public company is freely transferable.

c. Perpetual existence

A company will continue to exist even if all the members die. A company being a creation of the law, can be brought to an end only by law.

d. Scope of expansion

A company has large financial Thus there is a greater scope of expansion

e. Professional management

A company can afford to pay higher salaries to specialists and professionals. This leads to balanced decision making and efficiency in the company’s operation.

Limitations

a. Complexity information

Its formation requires greater time.

b. Lack of secrecy

Since the company requires to publish audited accounts and reports, it is difficult to maintain secrecy about the operation of the company.

c. Impersonal work environment
It is difficult for owners and management to maintain personal contact with employees, customers, and creditors.

d. Numerous regulations

The functioning of a company is subject to many legal provisions and compulsion.

e. Delay in decision making

It takes an important decision by holding a meeting. So it takes much time.

f. Oligarchic management the board of directors enjoys considerable freedom in exercising their power which they sometimes ignore the interest of shareholders.

g. Conflicts in interest, there may be conflicts of interest among various stakeholders of the com, pan and it affects the smooth functioning of the company.

Answer 32.
Business Ethics
Ethics is the belief is what is right proper and just. It is to the socially determined moral principle which should give business activities. Business is the code of conduct followed and performed by the businessmen. Ethical business is good business. Ethical business behavior improves public image, earn peoples confidence and trust, and leads to greater success.

The concept of Business Ethics

The word ethics’ has its origin in the Greek word ethics’ meaning character norms, ideals, or morals prevailing in a group or society. Ethics may be viewed as the entire body of moral values that society attaches to the actions of human beings. Ethics can also refer to codes or another system for controlling means so that they serve human ends.

Elements of Business Ethics Since ethical business behavior is good for both the business enterprise and society it makes sense to discuss how the enterprises can faster ethics in their day-to-day working.

1. Top management commitment

Top management must give continuous leadership for developing and upholding the values of the organization.
2. Publication of a codes

The enterprise must develop a code containing a definite ethical programme. This generally covers areas such as honesty and adherence to laws, product safety and quality health and safety in the workplace and financial reporting.

3. Establishment of compliance mechanisms

Answer 33.
Equity shares
The money raised by equity shares is called equity share capital. It represents the ownership of a company. Equity shareholders do not enjoy preferential right in the matter of the claim of dividend or repayment of capital. They do not get a fixed dividend. They have the right to vote,

Merit

a. It is suitable for investors who are willing to assume the risk for higher returns

b. Payment dividend is not compulsory

c. It serves as permanent capital as it is to be repaid only at the liquidation of a com-

d. Equity shares do not create any charge on the assets of the company.

e. They have the right to vote and participate in the management.

Demerit

a. Not attractive to investors who prefer safety and fixed income.

b. An issue of additional equity shares dilutes the voting power and earning of existing equity shareholders.

c. The cost of issue of equity shares is generally more as compared to the cost of raising funds through other sources.

d. It involves more formalities and procedural delays.

We hope the Plus One Business Studies Model Question Papers Paper 2 help you. If you have any query regarding Plus One Business Studies Model Question Papers Paper 2, drop a comment below and we will get back to you at the earliest.

Kerala Plus One Business Studies Model Question Paper 1 with Answers

Time Allowed: 2^1/2 hours
Cool off time: 15 Minutes
Maximum Marks: 80

General Instructions to Candidates

• There is a ‘cool off time of 15 minutes in addition to the writing time.
• You are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read questions carefully before you answering.
• All questions are compulsory and the only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures, and graphs should be shown in the answer sheet itself.
• Malayalam version of the questions is also provided.
• Give equations wherever necessary.
• Electronic devices except non-programmable calculators are not allowed in the Examination Hall.

Answer all questions from 1 to 9. Each carries 1 score. (9 × 1 = 9)

Question 1.
Identify the type of business organisation to which the registration is compulsory.
a) Sole proprietorship
b) Partnership business
c) Joint Stock Company
d) Hindu Undivided Family Business
Answer:
c) Joint Stock Company

Question 2.
Find the odd one from the following,
a) Banking
b) Mining
c) Warehousing
d) Advertising
Answer:
b) Mining

Question 3.
Identify the type of warehouse where the imported goods can be kept prior to the payment of duties and taxes.
a) Bonded warehouses
b) Government warehouses
c) Public warehouses
d) Private warehouses
Answer:
a) Bonded warehouses

Question 4.
A business firm decided to help the affected people in Okhi cyclone. It belongs to ………… responsibility of the business.
а) Discretionary
b) Legal
c) Economic
d) Ethical
Answer:
d) Ethical

Question 5.
Which of the following is known as the birth certificate of a Joint Stock Company?
a) Certificate of Incorporation
b) Memorandum of Association
c) Table A
d) Articles of Association
Answer:
a) Certificate of Incorporation

Question 6.
Fill up the series as per hint given:
a) Capital required for the day-to-day activities of the business – Working capital
b) Capital required for acquisition of fixed assets – ………?…………
Answer:
Fixed capital

Question 7.
The apex banking institution set up to promote
agriculture and rural development in India is
a) SIDBI
b) NABARD
c) BIFR
d) IBRD
Answer:
b) NABARD

Question 8.
Buying and selling of goods and services within the geographical boundaries of a nation is …………
a) External trade
b) Internal trade
c) Entrepot trade
d) International trade
Answer:
b) Internal trade

Question 9.
Identify the import document from the following
a) Letter of credit
b) Bill of lading
c) Bill of entry
d) Certificate of origin
Answer:
c) Bill of entry

Answer any 6 questions from 10 to 16. Each carries 2 scores. (6 × 2 = 12)

Question 10.
Write any two merits of Government Company.
Answer:

1. It has a separate legal entity, apart from the Government.
2. It enjoys flexibility and autonomy in all management decisions.

Question 11.
Identify the type of e-Business transaction referred in the following cases.
a) A dealer in Kerala places an order through e-mail to Maruti Udyog Ltd. for supply of 20 cars.
b) Ms. Anasooya placed an order for a smartphone through online.
Answer:
a) B2B Commerce
b) B2C Commerce

Question 12.
Explain the concept of business ethics with the help of an example.
Answer:
Ethics is concerned with what is right and what is wrong in human behavior. Business ethics refer to the socially determined moral principles which should govern business activities. Business ethics is the code of conduct followed and performed by every business. Ethical business behavior improves public image, earn’s public confidence and leads to greater success.

Examples of Business Ethics:

• Charging fair prices from customers
• Using fair weights for measurement of commodities

Question 13.
List out any two problems faced by small scale business in India.
Answer:

1. Small scale industries find it difficult to get adequate finance from banks and other financial in¬stitutions.
2. They are not able to get quality raw materials at reasonable prices.

Question 14.
Name any two products which are suitable for vending machine.
Answer:

1. Tea Or Coffee
2. Chocolate/Icecreams

Question 15.
Write a short note on Export Processing Zone.
Answer:
Export Processing Zones (EPZs): They are industrial estates, which form special enclaves separated from the domestic tariff areas. These are usually situated near seaports or airports. They are intended to provide an internationally competitive duty free environment for export production at low cost. They can import capital goods and raw materials for production of export goods without license.

Question 16.
State any two objectives of small scale business.
Answer:

1. Cottage and rural industries provide employment opportunities in the rural areas especially for the traditional artisans and the weaker sections of society.
2. It prevents migration of rural population to urban areas in search of employment.

Answer any 4 questions from 17 to 21. Each carries 3 scores. (4 × 3 = 12)

Question 17.
Identify the types of manufacturing industries mentioned below.
a) Production of cement by combining various ingredients like limestone, silicon etc.
b) Production of petrol, diesel and kerosene from crude oil.
c) Manufacturing of computers using different components.
Answer:
a) Synthetical Industry
b) Extrative Industries
c) Assembling Industry

Question 18.
Explain any three features of departmental undertakings,
Answer:
Features:

1. The enterprise is financed by annual appropriation from the budget of the Government and all revenue is paid to the treasury.
2. The enterprise is subject to accounting and audit control
3. It is subject to the direct control of the ministry.

Question 19.
List out any three differences between Memorandum of Association and Articles of Association.
Answer:

Question 20.
Write any three ways in which a business organisation can enter into International Business.
Answer:

1. Contract manufacturing
2. Licensing and franchising
3. Joint ventures

Question 21.
Explain any three schemes announced by the Government of India in Export-Import Policy (Exim Policy) for the promotion of foreign trade.
Answer:
Foreign Trade Promotion Measures and Schemes.
1. Duty drawback scheme: it refers to the refund of customs and excise duties paid on imported inputs used in the manufacture of export goods.

2. Export manufacturing under bond scheme: Under this facility firms can produce goods without payment of excise and other duties. The firms can avail this facility after giving an undertaking (i.e. bond) that they are manufacturing goods for export purposes.

3. Exemption from payment of sales taxes: Goods meant for export purposes are not subject to sales tax. Income derived from export operations had been exempt from payment of income tax. Now this benefit of exemption from income tax is available only to 100 percent Export Oriented Units (100 percent EOUs) and units set up in Export Processing Zones (EPZs) or Special Economic Zones (SEZs) for selected years.

Answer the following question which carries 4 scores. (4 × 1 = 4)

Question 22.
Match the following:

Answer:

Answer any 3 questions from 23 to 26. Each carries 4 scores. (3 × 4 = 12)

Question 23.
Identify the type of partners in the following cases:
a) Mr. Nirmal contributed ₹ 1 lakh as capital in Maithri Traders but do not participate in day to day activities.
b) A well-known person allows Maithri Traders to use his name but doesn’t contribute capital or share profits.
c) Mr. Deepu pretends to be a partner in Maithri Traders, but actually he is not.
d) Mr. Rajesh contributed ₹ 1 lakh as capital in Maithri Traders and participates in the conduct of business.
Answer:
a) Sleeping partner
b) Nominal partner
c) Partner by estoppel
d) Active partner

Question 24.
Write any four benefits of e-Banking.
Answer:
Benefits of e-banking to customers:

1. e-banking provides 24 hours, 365 days a year services to the customers of the bank
2. Customers can make some of the permitted transactions from office or house or while travelling via mobile telephone
3. It creates a sense of financial discipline by recording each and every transaction
4. Greater customer satisfaction by offering unlimited access to the bank

Question 25.
Classify the following into long-term and short-term sources of finance.
a) Factoring
b) Retained earnings
c) Preference shares
d) Bank overdraft
e) Commercial papers
f) Debentures
g) Trade credits
h) Equity shares
Answer:

Question 26.
“Outsourcing of non-core activities are beneficial to business units.”
Do you agree? Comment on this statement by highlighting your views.
Answer:
a) Yes, I agree

b) Outsourcing or Business Process Outsourcing (BPO):
Outsourcing is a management strategy by which an organisation contracts out its major non-core functions to specialized service providers with a view to benefit from their expertise, efficiency and cost-effectiveness, and allow managers to concentrate on their core activities.

Merits of outsourcing:

• It provides an opportunity to the organisation to concentrate on areas in which it has core competency or strength.
• It helps better utilisation of its resources as the management can focus its attention on selected activities and attain higher efficiency.
• It helps the organisation to get an expert and specialised service at competitive prices. It helps in improved service and reduction in costs.
• It facilitates inter-organisational knowledge sharing and collaborative learning.

Answer any 3 questions from 27 to 30. Each carries 5 scores. (3 × 5 = 15)

Question 27.
“Risk is an essential part of every business.” Explain its causes.
Answer:
Causes of Business Risks:
Business risks arise due to a variety of causes. They are:

• Natural Causes: it includes natural calamities like flood, earthquake, lightning, heavy rains, famine, etc.
• Human Causes: Human causes include dishonesty, carelessness or negligence of employees, strikes, riots, management inefficiency, etc.
• Economic causes: These include change in demand, change in price, competition, technological changes etc.
• Political Causes: Change in Govt, policies, taxation; licensing policy etc.

Question 28.
State any three responsibilities of business towards employees and any two towards consumers.
Answer:
1. Responsibility Towards the workers:

• Providing fair wages
• Providing good working conditions and welfare amenities.
• Respect democratic rights of workers to form unions.

2. Responsibility toward consumers:

• Supply right quality and quantity of goods and services at reasonable prices.
• Averting unfair trade practices like adulteration, poor quality, misleading advertisement etc.
• Inform them about new products, its features, uses and other matters relating to the products.
• To handle the customers grievance promptly.

Question 29.
Who are promoters? Briefly explain any four functions performed by them.
Answer:
Functions of a Promoter:
1. Identification of business opportunity: The first and foremost activity of a promoter is to identify a business opportunity.

2. Feasibility studies: After identifying a business opportunity, the promoters undertake some feasibility studies to determine the viability and profitability of the proposed activity.

• Technical feasibility – To determine whether the raw materials or technology is easily available
• Financial feasibility – To determine the total estimated cost of the project
• Economic feasibility – To determine the profitability of the proposed project

3. Name approval: After selecting the name of company the promoters submit an application to the Registrar of companies for its approval. The selected name is not the same or identical to an existing company.

4. 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.

5. Appointment of professional: Promoters appoint merchant bankers, auditors etc. to assist them in the preparation of necessary documents.

6. Preparation of necessary documents: The promoters prepare certain legal documents which are to be submitted to the Registrar of companies. They are

• Memorandum of Association
• Articles of Association,
• Consent of proposed Directors
• Agreement, if any, with proposed managing or whole time director
• Statutory declaration

Question 30.
Write any five advantage of equity shares as a sources of finance.
Answer:
Merits:

1. Equity shares are suitable for investors who are willing to assume risk for higher returns
2. Payment of equity dividend is not compulsory.
3. Equity capital serves as permanent capital as it is to be repaid only at the time of liquidation of a company.
4. Equity shares do not carry any charge on the assets of the company.
5. They have right to vote and participate in the management.
6. Equity capital provides creditworthiness to the company

Answer any 2 questions from 31 to 33. Each carries 8 scores. (2× 8 = 16)

Question 31.
Identify the business organisations formed voluntarily by a group of people for mutual benefits, following the principle of ‘one man one vote’. Also explain its limitations.
Answer:
a) Co-operative Societies

b) Co-operative Society
The cooperative society is a voluntary association of persons, who join together with the motive of welfare of the members. The basis of cooperation is self help through mutual help, the motto is “each for all and all for each”. The cooperative society is compulsorily required to be registered under the Cooperative Societies Act 1912. At least ten persons are required to form a society. The capital of a society is raised from its members through issue of shares.

Merits:

• Equality in voting status: The principle of ‘one man one vote’ governs the cooperative society.
• Limited liability: The liability of members of a cooperative society is limited to the extent of their capital contribution.
• Stable existence: Death, insolvency or insanity of the members do not affect continuity of a cooperative society.
• Economy in operations: Co-operative society aims to eliminate middlemen. This helps in reducing cost.

Limitations:

• Limited resources: Resources of a cooperative society consists of limited capital contributions of the members.
• Inefficiency in management: Cooperative societies are unable to attract and employ expert managers because of their inability to pay them high salaries.
• Lack of secrecy: As a result of open discussions in the meetings of members it is difficult to maintain secrecy about the operations of a cooperative society.
• Government control: cooperative societies have to comply with several rules and regulations related to auditing of accounts, submission of accounts, etc. It affects its freedom of operations.

Question 32.
Explain the major principles of insurance.
Answer:
Principles of Insurance

1. Utmost good faith: The insured must disclose all material facts about the subject matter to the insured. Otherwise the insurer can cancel the contract. The insurer must disclose all the terms and conditions in the insurance contract to the insured.

2. Insurable interest: The insured must have an insurable interest in the subject matter of insurance. Insurable interest means the interest shown by the insured in the continued existence of the subject matter or the financial loss he is subjected to on the happening of an event against which it has been insured.

3. Indemnity: All insurance contracts, except life insurance are contracts of indemnity. According to the principle of indemnity, in the event of occurrence of loss, the insured will be indemnified to the extent of the actual value of his loss or the sum insured which ever is less. The objective behind this principle is nobody should treat insurance contract as the source of profit.

4. Subrogation: According to this principle, after the insured is compensated for the loss to the property insured by him the right of ownership of such property passes on to the insurer. This is because the insured should not be allowed to make any profit, by selling the damaged property.

5. Causa proxima: When the loss is the result of two or more causes, the proximate cause for the loss alone will be considered by the insurance company for admitting the claim.

6. Contribution: In certain cases, the same subject matter is insured with one or more insurer. In case there is a loss, the insured is eligible to receive a claim only up to the amount of actual loss suffered by him.

7. Mitigation of loss: This principle states that it is the duty of the insured to take reasonable steps to minimize the loss or damage to the insured property. If reasonable care is not taken then the claim from the insurance company may be rejected.

Question 33.
Explain any four services each rendered by wholesalers to manufacturers as well as to the retailers.
Answer:
Services of Wholesalers to Manufacturers:

• Facilitating large scale production: As the wholesalers place bulk orders, the producers are able to undertake production on a large scale and take advantages of economies of scale.
• Risk bearing: Wholesaler deals in goods in their own name and bear variety of risks such as the risk of fall in prices, theft, pilferage spoilage, fire etc.
• Financial assistance: Wholesalers provide financial assistance to the manufacturers by making cash payment for the purchased goods.
• Expert advice: Wholesaler provide various useful information regarding the customer preference, market conditions etc to the manufacturer.
• Help in marketing function: As the wholesalers place bulk orders, it relieves the producer from many marketing activities and he can concentrate on production.
• Storage facilities: Wholesalers hold the goods in their own warehouses. It reduces the burden of storage of goods by the manufacturers.
• Facilitate production continuity: The wholesalers facilitate continuity of production activity throughout the year by purchasing the goods as and when these are produced

Services of Wholesalers to Retailers:

• Availability of goods: The wholesalers make the products of various manufacturers readily available to the retailers.
• Marketing support: They undertake advertisements and other sales promotional activities to induce customers to purchase the goods.
• Grant of credit: The wholesalers generally provide credit facilities to the retailers.
• Specialised knowledge: Wholesalers know the pulse of the market. They inform the retailers about the new products, their uses, quality, prices, etc.
• Risk sharing: Wholesalers sell goods to retailers in small quantities and thus retailers do not face the risk of storage, pilferage, reduction in prices etc.

Plus One Business Studies Previous Year Question Papers and Answers