Students must start practicing the questions from CBSE Sample Papers for Class 11 Business Studies with Solutions Set 6 are designed as per the revised syllabus.

CBSE Sample Papers for Class 11 Business Studies Set 6 with Solutions

Time Allowed: 3 Hours
Maximum Marks: 80

General Instructions:

This Question paper contains five Sections- A, B, C, D & E.

  1. Section – A contains Questions 1 to 20 carrying 1 mark each.
  2. Section – B contains Questions 21 to 25 carrying 3 marks each. Answers to these Questions may be in about 50 to 75 words.
  3. Section – C contains Questions 26 to 28 carrying 4 marks each. Answers to these Questions may be in about 120 words.
  4. Section – D contains Questions 29 to 31 carrying 5 marks each. Answers to these Questions may be in about 150 words.
  5. Section – E contains Questions 32 to 34 carrying 6 marks each. Answers to these Questions may be in about 200 words

Section – A (20 Marks)

Question 1.
Which service helps to remove the hindrance of place? [1]

Question 2.
Which of the following statements regarding reasons for international business is correct? [1]
(A) Unequal distribution of natural resources among nations or differences in their productivity levels
(B) Availability of various factors of production differs among nations
(C) Labour productivity and production costs differ among nations due to various socio-economic, geographical and political reasons
(D) All of these
(D) All of these

Question 3.
The government generally does not interfere in the functions of private enterprises as it has no control over it. (True/False) [1]

CBSE Sample Papers for Class 11 Business Studies Set 6 with Solutions

Question 4.
What percent of share the government must have for a government company? [1]
51 percent

Question 5.
In order to meet the social goals like improving the standard of living for weaker sections of the society, providing health care and hygienic conditions in slum areas, etc. which services are provided? [1]
(A) Personal services
(B) Business services
(C) Social services
(D) None of these
(C) Social services

Explanation: Social services are generally provided voluntarily in pursuit of certain goals

Question 6.
Which of the following statements is true regarding the benefits of e-commerce to the business organisation? [1]
(A) Small firms are not able to coexist with big firms
(B) Poor time management
(C) Expands the marketplace to national and international markets
(D) Does not support business processes
(C) Expands the marketplace to national and international markets

Question 7.
________ responsibility is the type of social responsibility which is responsible for production of goods and services. [1]

Question 8.
“Participation at the time of services delivery is must.” What feature of service is being explained here? [1]
Involvement of Customers

Question 9.
“Business risk” is not likely to arise due to: [1]
(A) Change in government policy
(B) Good management
(C) Employee dishonesty
(D) Power failure
(B) Good management

Explanation: Good management reduces business risk.

Question 10.
The death, insolvency, retirement or insanity of any member of a company does not affect the working of a company. What characteristic is being explained about a company in the above lines? [1]
Perpetual existence.

Question 11.
Which of the following statements is false? [1]
(A) Verticals Third Party Service Provider specialize in a number of processes including both non-core and core activities
(B) Horizontals Third Party Service Provider specialize in a number of processes including both non-core and core activities
(C) Horizontals Third Party Service Provider specialize in only one or two processes
(D) All the statements are true
(B) Horizontals Third Party Service Provider specialize in a number of processes including both non-core and core activities

Question 12.
Name any one environment problem which the world is facing today. [1]
Global warming

Question 13.
Permitting another party in a foreign country to produce and sell goods under the owner’s trademarks, patents or copyrights in lieu of some fee is known as ________. [1]

Question 14.
SFURTT was set up by the Central Government in which year? [1]
(A) 2002
(B) 2003
(C) 2004
(D) 2005
(D) 2005

Explanation: SFURTI is an initiative started by the Indian government’s Ministry of MSME to promote clusters of rural-based industries in different parts of the country.

CBSE Sample Papers for Class 11 Business Studies Set 6 with Solutions

Question 15.
GST has been implemented in India with the idea of ‘One Nation and One Tax’. When was it implemented? [1]
(A) Jan 1, 2016
(B) Jan 1, 2017
(C) July 1, 2016
(D) July 1, 2017
(D) July 1, 2017

Question 16.
Fixed-shop retailers are classified into small shopkeepers and large retailers on what basis? [1]
(A) Type of ownership
(B) Merchandise handled
(C) Place of business
(D) Size of their operations
(D) Size of their operations

Read the following text and answer Q.17-20 on the basis of the same:

Faulad Steel Ltd. is a multi-product company, manufacturing steel pipes in wide range for wide spectrum of application. Recently the company received a big order from an MNC for which it requires additional funds. The finance manager reported that the company is not in a position to bear extra burden of explicit cost and equity shareholders insisted not to issue more shares as it can affect their control consideration. Now, the company has only one option, i.e., ploughing back of profit.

Question 17.
‘Company is not in a position to bear extra burden of explicit cost.’ Identify the meaning of explicit cost in the context of equity shares. [1]
(A) Dividend
(B) Interest
(C) Market value of shares
(D) Operating expenses
(A) Dividend

Explanation: Explicit cost refers to all accounting costs which the business incurred in actual in production and selling of its output and is deducted from total revenue to derive the accounting profit.

Question 18.
________ can affect their control consideration. What is the meaning of control consideration in this context? [1]
(A) Control over funds
(B) Control over management
(C) Control over risks
(D) Control over the activities of the company
(D) Control over the activities of the company

Question 19.
Right to control is enjoyed by which of the following sources of finance? [1]
(A) Debentures
(B) Equity shares
(C) Retained earnings
(D) Preference shares
(B) Equity shares

Question 20.
In the above case, which of the following sources of finance is most suitable? [1]
(A) Shares
(B) Debentures
(C) Retained earnings
(D) Bank loans
(C) Retained earnings

Explanation: 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’.

Section – B (15 Marks)

Question 21.
Identify the following activities into economic and non-economic activities, and also mention which type of economic activities are they :
(i) Ravi is working in sales department and getting paid in the form of salaries.
(ii) Shankar provides food to the people living in slums.
(iii) A lawyer filing a case in the court for his client.
Identify the economic activities in the following case and classify them into Primary, Secondary and Tertiary industries.
(i) Mohan, a farmer producing wheat.
(ii) Raj, the owner of a cotton textile firm.
(iii) Ramesh, is working as a peon in an oil refinery. [3]
(i) Economic activity – employment.
(ii) Non–economic activity.
(iii) Economic activity – profession.


(i) Farmer – Business – Primary industry.
(ii) Owner of a cotton textile firm – Business secondary industry.
(iii) Peon – Employment – Secondary industry.

Question 22.
State any three agency functions of a Commercial Bank. [3]
Agency functions of a Commercial Banks are as follows:
(i) Collection and payment of cheques.
(ii) Purchase and sale of securities.
(iii) Advise customers on financial matters.

Question 23.
Why are banks called debtors as well as creditors? [3]
Debtor is a person who owes some amount of money to a person and creditor is a person who has to collect money from a person or to whom a person owes money.

A bank owes money to its depositors that is why it is called debtor. On the other hand, a bank grants loan also and all those who have taken loan owe money to banks. That is why a bank is also called creditor. A bank is a debtor for its depositors and creditor for its loan holders.

Question 24.
It refers to creations of mind such as inventions; literacy and artistic works, designs and symbols names and images used in commerce. Name and explain the term mentioned in the above lines. [3]
Intellectual Property: It means providing property rights through patents, copyrights and trademarks. Holders of intellectual property rights have a monopoly on the usage of property or items for a specified time period.

Question 25.
State any two preferential rights which are enjoyed by preference shareholders? [3]
Preferential rights that are enjoyed by preference shareholders are as follows:
(i) Receiving a fixed rate of dividend out of the net profits of the company before any dividend is declared for equity shareholders.
(ii) Receiving their capital after the claims of the company’s creditors have been settled at the time of liquidation.

CBSE Sample Papers for Class 11 Business Studies Set 6 with Solutions

Section- C (12 Marks)

Question 26.
Write short note on Auxiliaries to trade?
Discuss the development of indigenous banking system in Indian sub-continent? [4]
Auxiliaries to trade: Includes all those activities which are meant for assisting trade. Following are the important auxiliaries to trade:

  • Transportation and communication: Production of goods generally takes place in particular location. But these goods are demanded for consumption in different parts of the country. This hindrance of place can be removed by transportation – road, rail or coastal shipping, etc. In the same way, the hindrance of information is removed by communication. Communication helps in exchange of information between producers, consumers and traders.
  • Banking and finance: Banks and financial institutions provide credit facility to provide finance for smooth flow of business activities. Other facilities like collection and deposit of cheques, issue of bank draft, discounting of bills of exchange, etc. are also provided by banking institutions.
  • Insurance: Risk is inherent with business. The insurance sector provides protection from some of the risks faced by business. These risks mainly include theft, burglary, fire, accident, etc.


Indigenous Banking system played a prominent role in the development of Indian trade. When people had little money they were not the participant of import and export because they usually fulfilled only their own needs but when they got credit from the indigenous, bankers they began to import and export goods, this enhanced the economic development of India sub-continent.

These intermediaries were not only providing them credit but also the security of trade this encouraged the merchants to trade overseas. The emergence of credit transactions and availability of loans and advances enhanced commercial operations. Indigenous Banking system not only developed the export and import but also enhanced the agriculture section.

Question 27.
Explain briefly the following features of global enterprises : [4]
(i) Huge capital resources
(ii) Foreign collaboration
(iii) Expansion of market territory
(iv) Centralised control
(i) Huge capital resources: These enterprises have huge financial resources and also possess the ability to raise funds from different sources. They can raise funds by issuing equity shares, debentures, etc. Because of their high credibility in the market, the investors of the host countries are always willing to invest in them.

(ii) Foreign collaboration: Usually, these enterprises enter into agreements with companies of the host countries. These agreements are made in respect of sale of technology, production of goods, patents, resources, etc.

(iii) Expansion of market territory: As the network of operations of these enterprises extends beyond their existing physical boundaries, they expand their market territory. They operate through their branches, subsidiaries in host countries and occupy dominant positions in various markets.

(iv) Centralised control: Despite the fact that branches of these enterprises are spread over in many countries, they are controlled and managed by their Head Office (H. O.) in their home countries only. All these branches have to work within the broad policy framework of the parent company. A common system for working of all the companies under their control is evolved.

Question 28.
Define Entrepreneurship Development. State the stages of entrepreneurship development program. [4]
Entrepreneurship development program is the process of improving the skills and knowledge of entrepreneurs through various training and programs.
An Entrepreneurial Development Programme consists of three broad stages:
(i) Pre-training Stage
(ii) Training or Development stage
(iii) Post-training or Follow-up stage

Section – D (15 Marks)

Question 29.
State the advantages of Joint Hindu Family Business. [5]
Advantages of Joint Hindu Family Business:

Easy Formation: It comes into existence under the Hindu Succession Act, 1956, but easy to form because no registration or legal formalities are required.

Effective control: The decision-making power lies only with the Karta and no other member has the right to interfere in his decision. Thus, the Karta can take prompt and flexible decisions that ensure effective control in the organisation.

Continued business existence: The operation of the business is not threatened by the death, insanity or imprisonment of the Karta because in the eventuality of any mishappening with the Karta, the next eldest member takes up his position.

Limited liability of members: Except the Karta, the liability of other members is limited to the extent of their share in the business.

Increased loyalty and cooperation: In a Joint Hindu Family Business, chances of great coordination among the members are more because they all belong to the same family. Hence, chances of loyalty towards business are more as compared to other forms of organisations.

Question 30.
“A wholesaler will sell his product in bulk quantities to retailers, allowing the retailer to take advantage of a lower price than if he were to buy single items.” In this statement explain the services provided by wholesalers to retailers.
Imagine your life without your local market. What difficulties would a consumer face if there is no retail shop. [5]
The services of wholesalers to retailers are as follows:

Availability of goods: The wholesaler provides a variety of same goods to the retailer and hence relieves him from the burden of collecting the goods from several manufacturers.

Risk sharing: A retailer does not have to bother about risk of storage, reduction in price, fluctuation in demand, etc. All these risks are borne by the wholesaler.

Grant of credit: The wholesaler grants credit facility to the retailer, thus enabling him to manage his business with a small amount of working capital.

Marketing support: The wholesalers undertake advertisements and other sales promotional activities in order to induce the consumers to purchase the goods. Thus, they provide marketing support to the retailers.

Specialised knowledge: The wholesalers provide useful information to the retailers about the new products, their benefits, quality, etc. They also advise the retailers regarding the decoration of their shops, allocation of shelf space and demonstration of certain products.

Retailer acts as a link between wholesalers/manufacturers and consumers. Without any local market, the life of consumers will become hard.

  1. Without a retail shop, a consumer cannot get continuous supply of commodities.
  2. It will be difficult to have a wide choice to purchase variety of goods manufactured by various manufacturers.
  3. A consumer will miss the personalised services and credit facilities provided by retailers.
  4. A consumer will miss the after-sale services provided by the retail shops.
  5. Consumers will miss the information about new products, their features, prices, etc.

CBSE Sample Papers for Class 11 Business Studies Set 6 with Solutions

Question 31.
Fashionista is a footwear manufacturing company in India. The company has received an order to export 5,000 pair of shoes to Stylebazar located in New York. Discuss the five following steps of export procedure along with the documents involved in brief.
Differentiate between the following:
(i) Sight and usance drafts.
(ii) Bill of lading and airway bill. [5]
Steps of export procedure are:

Receiving trade enquiry and sending Quotation: Trade procedure starts when an exporter receives trade enquiry in written form from the intending importer. In response to the trade enquiry the exporter sends the quotation or a proforma invoice containing necessary details regarding the detailed condition of sale as delivery schedule, mode of delivery, mode of packing, terms of payment, etc.

Receiving Indent and sending confirmation: After receiving the quotation from the exporter, the importer sends indent which contains all the important particulars of the transaction such as description of goods, their price, quantity, quality, instructions regarding packing, marking, insurance, mode of payment, date and method of delivery, etc. for buying goods and the exporter confirms its receipt.

Obtaining letter of credit: Before despatching the goods, the exporter assesses the creditworthiness of the importer. For this, the importer is requested to send a ‘letter of credit’ in favour of exporter. It contains an undertaking of importer’s bank that bills drawn by the exporter up to a specified amount shall be honoured by the importer.

Obtaining export license and completing other formalities: For exporting goods from India, exporters are required to obtain export license, Import Export Code Number, registration membership certificate, RBI code number and registering with ECGC.

Obtaining pre-shipment finance and production or procurement of goods: After receiving a letter of credit, the exporter obtains pre-shipment finance from his banker and starts manufacturing/ procuring goods as per the specifications of the export order.


(i) Sight and usance drafts: In the case of sight draft, the drawer instructs the bank to hand over the relevant documents to the importer only against payment. But in case of usance drafts, the drawer instructs the bank to hand over the relevant documents to the importer against acceptance of the bill of exchange.
(ii) Bill of lading and airway bill: Bill of lading is a document prepared and signed by the master of the ship acknowledging the receipt of goods on board. It contains terms and conditions on which the goods are to be taken to the port of destination.

On the other hand, an airway bill is a document wherein an airline/shipping company gives its official receipt of the goods on board its aircraft and at the same time, gives an undertaking to carry them to the port of destination. It is also a document of title to the goods and as such is freely transferable by the endorsement and delivery.

Section – E (18 Marks)

Question 32.
‘Profit earning is not the only objective of the business’? Give any four reasons to justify the statement.
Why is there a need to control environment pollution? Give some measures that a business can take to protect environment. [6]
The sole aim of earning profit has the following effects on a business:

Ignores the interest of workers: Labour is one of the most important factors of production. Profit maximisation bypasses the interest of workers in the way that they do not get fair remuneration and hence are not motivated. In the absence of motivation, they will not work up to their full potential. Resultantly, quality and standards of the products and services will deteriorate and will ultimately lead to losses.

Ignores the interest of customers: Customers are very important for every business in the sense that without their existence, even thinking about business is merely a dream. Profit maximisation bypasses their interest because goods/services are overpriced which ultimately leads to reduction in the number of customers, reduction in quantity of sales and thereby reduction in profits.

Ignores the interest of society: Profit maximisation overlooks the interest of the society in which it works. It may propel a businessman to indulge in unfair trade practices like hoarding, black marketing etc.

Ignores long-term interest of the business itself: Profit maximisation may be the objective for the short term, but in the long term it may lead the business to a dangerous position where it could become very difficult for the business to even survive.


The environment is the sum total of all the surroundings, both natural and man-made. The quality of the environment is fast deteriorating because of the business activities. The smoke, effluents and other wastes released from the industries pollute the environment and hence affect the health of the people. Therefore, it is essential that we should protect our environment.

Role of business in environmental protection:

Preventive role: It concentrates on preventing pollution from different activities.
This includes:
(a) Use of CNG vehicles.
(b) Recycling of industrial waste.
(c) Scientific treatment of emission before their release.
(d) Installation of pollution-resistant machinery.

Curative role: Steps must be taken to rectify the damage caused to the environment:
(a) Promoting afforestation.
(b) Assisting government agencies and other NGOs in cleaning polluted rivers and management of harmful substances.

Awareness role:
(a) Promoting awareness about ecological balance.
(b) Creating awareness about various causes and effects of environmental pollution.

Question 33.
Ram an engineer in ‘Alpha Ltd/ wants to run his own enterprise in his village. After getting 2 years of experience, he resigned from his job. He went to one of his friends working in ministry of small-scale industry to know about the Government institutions and schemes for development of SSIs.

The Government of India through the five year plans and the Industrial policy statements has emphasised on formulation and implementation of various policies, incentives to promote SSI especially in backward or lesser-developed areas. His friend suggested him to go to the District Industrial Centres of his district. He got the required help from DICs and is successfully running his small business in his village and also wants his village women to start small business based on their local skills.

(i) State the main objective of DIC.
(ii) How DIC was contributed towards the establishment and development of Small business units ?
(iii) Name the organisation through which Ram got required help to promote rural and women entrepreneurship. [6]
(i) The main objective of DIC is to make available all necessary services required to start and manage rural industries at one place.

(ii) DIC has helped Ram in the following ways:
(a)It identifies project for setting up SSI unit.
(b) It issues permanent registration certificate to SSI units.
(c)It provides marketing support to SSI units.
(d) It acts as a link between the entrepreneurs and the lead banks of district.
(e)Helps businessman in obtaining license from electricity board, water supply board, etc.

(iii) Rural and Women Entrepreneurship Development (RWED).

Question 34.
Which institution aimed at facilitating a system of international payments and taking care of the adjustments in exchange rates among national currencies. Also describe it’s objectives.
Which organisation replaced GATT? Give its four features. [6]
International Monetary Fund (IMF) is the second international organisation next to the World Bank which came into existence in 1945. It has its headquarters located in Washington, DC. It aimed at facilitating a system of international payments and taking care of the adjustments in exchange rates among national currencies.

The various objectives of IMF are:
(i) To promote international monetary cooperation through a permanent institution.
(ii) To facilitate expansion of balanced growth of international trade and to contribute thereby to the promotion and maintenance of high levels of employment and real income.
(iii) To promote exchange rate stability with a view to maintain orderly exchange arrangements among member countries.
(iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members.


WTO (World Trade Organisation) has replaced GATT.
Features of WTO are:
(i) WTO is a permanent organisation created by an international treaty ratified by the Government and legislatures of member states.
(ii) It governs trade not only in goods but also in services and intellectual property rights.
(iii) It is a member driven rule-based organisation in the sense that all the decisions are taken by common consensus of all the members.
(iv) It has global status similar to that of IMF and the World Bank.

CBSE Sample Papers for Class 11 Business Studies Set 6 with Solutions