Students must start practicing the questions from CBSE Sample Papers for Class 11 Business Studies with Solutions Set 8 are designed as per the revised syllabus.
CBSE Sample Papers for Class 11 Business Studies Set 8 with Solutions
Time Allowed: 3 Hours
Maximum Marks: 80
General Instructions:
This Question paper contains five Sections- A, B, C, D & E.
- Section – A contains Questions 1 to 20 carrying 1 mark each.
- Section – B contains Questions 21 to 25 carrying 3 marks each. Answers to these Questions may be in about 50 to 75 words.
- Section – C contains Questions 26 to 28 carrying 4 marks each. Answers to these Questions may be in about 120 words.
- Section – D contains Questions 29 to 31 carrying 5 marks each. Answers to these Questions may be in about 150 words.
- 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.
“Risk is an essential part of every business.” [1]
(A) The statement is true.
(B) The statement is false
(C) Depends on the business activity
(D) None of these
Answer:
(A) The statement is true.
Explanation: No business can avoid risk although the degree of risk may vary. Risk can be reduced but cannot be eliminated.
Question 2.
Which of the following cannot be classified as an objective of business? [1]
(A) Investment
(B) Productivity
(C) Innovation
(D) Profit earning
Answer:
(A) Investment
Explanation: It is the profit motive that serves as the sole objective of every business activity. Business enterprises need to improve their productivity and engage in research and development activities for new product innovations to sustain themselves in the market. The goal of business is thus increasing productivity, innovation and achieving profit. However, investment cannot be considered a business objective.
Question 3.
Name the law which governs the HUF business. [1]
Answer:
Hindu Succession Act, 1956.
Question 4.
Statutory Corporation falls under which of the following categories? [1]
(A) Private Sector
(B) Public Limited Company
(C) Public Sector
(D) Private Limited Company
Answer:
(C) Public Sector
Explanation: Statutory corporations are public enterprises brought into existence by a Special Act of the Parliament. The Act defines its powers and functions, rules and regulations governing its employees and its relationship with government departments.
Question 5.
The principle of indemnity is not applicable to which of the following? [1]
(A) Fire Insurance
(B) Life Insurance
(C) Marine Insurance
(D) All of these
Answer:
(B) Life Insurance
Explanation: Indemnity principle doesn’t apply to life insurance since the value of human life cannot be ascertained.
Question 6.
That an enterprise must behave as a good citizen is an example of its responsibilities towards: [1]
(A) Owners
(B) Workers
(C) Consumers
(D) Community
Answer:
(D) Community
Explanation: The responsibilities of business towards community are as follows:
(i) To adopt socially desirable behaviour and standard of living, avoiding ostentation and wasteful expenditure.
(ii) To play a fair role in civic affairs.
(iii) To provide and promote general amenities and help in creating better living conditions in general.
(iv) To preserve and promote social and culture values.
(v) To undertake socially desirable projects relevant for the community as a whole.
(vi) To take steps for developing backward areas.
Question 7.
Name the modern means of retailing which has replaced mail order business. [1]
Answer:
Internet Selling
Question 8.
Name the principle of insurance where it is the right of the insurer to stand in the place of the insured after settlement of a claim as far as the right of insured in respect of recovery from an alternative source is involved. [1]
Answer:
Subrogation
Question 9.
E-commerce includes all the information related to the firm in electronic form. (True/False) [1]
Answer:
False
Question 10.
Name any one type of good which is not suitable for mail order business house. [1]
Answer:
Perishable good
Question 11.
______ refers to sending of goods and services from the home country to a foreign country and ______ refers to purchase of foreign products and bringing them into one’s home country. [1]
Answer:
Exporting, Importing
Question 12.
Which of the following is incorrect regarding the limitations of e-business? [1]
(A) Economical in nature
(B) Difficulty in acceptance by people as they hesitate to adjust to new technology
(C) Low personal touch as it lacks interpersonal interactions.
(D) All statements are correct
Answer:
(A) Economical in nature
Question 13.
Whose involvement is necessary in order to implement the ethics policies in the firm so as to make ethical business a reality? [1]
Answer:
Employees
Question 14.
After the death of the Karta, the Joint Hindu Family business comes to an end. [1]
(A) The statement is true
(B) The statement is false
(C) Depends on the nature of business
(D) Depends on the mutual decision of the members
Answer:
(D) Depends on the mutual decision of the members
Explanation: The business continues to run in case of death of Karta or any other member of the family. The next eldest member takes up the position of Karta, making the business stable. The business can, however, be terminated with the mutual consent of the members on their declaration that they are no longer a part of Joint Hindu family business.
Question 15.
Which among the following is not a feature of Globed Enterprises? [1]
(A) Support huge finance
(B) Enter into foreign collaborations
(C) Decentralized control
(D) Possess technological superiorities
Answer:
(C) Decentralized control
Explanation: MNCs have a centralised control system. All the decisions for subsidiaries or branches are taken by the headquarters of MNCs. Headquarter of MNCs exercise control over their foreign subsidiaries.
Question 16.
Which of the following forms supplied by the customs office is filled by the importer for assessment of customs import duty? [1]
(A) Bill of lading
(B) Bill of entry
(C) Commercial invoice
(D) Dock Challan
Answer:
(B) Bill of entry
Explanation: Bill of entry is a form supplied by the customs office to the importer. It is to be filled in by the importer at the time of receiving the goods. It has to be in triplicate and is to be submitted to the customs office.
The bill of entry contains information such as name and address of the importer, name of the ship, number of packages, marks on the package, description of goods, quantity and value of goods, name and address of the exporter, port of destination, and customs duty payable.
Read the given text and answer Q.17-20 on the basis of the same
Sensing the business opportunities in Food industry, Sagar Bagada after completing his graduation in Agriculture engineering, decided to open his own enterprise. His dream turned into reality when his enterprise, “Swaad Food Industries” set up its food and beverages processing plant in ‘Mitrapura”, one of the rural areas of Rajasthan, under Start-up India Scheme launched on16th January, 2016. The enterprise opted for labour-intensive technique, due to easy availability of labour at lower cost. Within no time, he came in the list of successful entrepreneurs.
Question 17.
What is the process of creation of an enterprise known as? [1]
(A) Venture
(B) Project
(C) Entrepreneurship
(D) Business idea
Answer:
(C) Entrepreneurship
Explanation: Entrepreneurship refers to the process of creating a new enterprise and bearing any of its risks, with the view of making the profit.
Question 18.
Start-up India Scheme was launched on ______ in the year ______. [1]
(A) 16th Jan. 2016
(B) 2nd Oct. 2016
(C) 17th Sep. 2006
(D) 2nd Oct. 2006
Answer:
(A) 16th Jan. 2016
Explanation: Startup India scheme is an important government scheme that was launched on 16th January 2016 with an aim to promote and support the start-ups in India by providing bank finances.
Question 19.
As a successful entrepreneur, identify Sagar’s contribution to the economy is: [1]
(A) Contribution to GDP
(B) Generation of employment
(C) Capital formation
(D) All of these
Answer:
Option (D) is correct.
Question 20.
“The enterprise opted for labour intensive technique, due to easy availability of labour at lower cost.” Identify the need for entrepreneurship satisfied in the given statement. [1]
(A) Organisation of production
(B) Generation of employment
(C) Economic efficiency
(D) Generation of business opportunities for others
Answer:
(C) Economic efficiency
Section – B (15 Marks)
Question 21.
What are the various types of Industries? [3]
OR
“The objective of business should not always be economic. No doubt economic object is indispensable for existence and development, but economic objectives can be achieved only when a business has social standing.” In the context of above discussion, state any three social objectives of business.
Answer:
The various types of Industries are:
(i) Primary Industry: Includes all activities related to
(a) Extraction and production of natural resources,
(b) Reproduction and development of living organisms, plants, etc.
(ii) Secondary Industry: These industries process raw material supplied by primary industries to produce goods for further processing by other industries or for final consumption.
(iii) Tertiary Industry: Tertiary industries provide supporting services to primary industries, secondary industries and to all activities related to trade, removing hindrances arising during the process of production and distribution of goods.
OR
Social objectives are:
(i) Supply of desired quality of products
(ii) Avoidance of unfair trade practices
(iii) Employment generation
Question 22.
What are the different types of bank accounts that can be opened easily in a commercial bank? [3]
Answer:
Types of Bank Accounts are:
(i) Saving Deposit Account: A person can open a savings deposit account by depositing a small sum of money. He can deposit money and withdraw money from his account whenever required.
(ii) Current Deposit Account: The account holder can deposit and withdraw money whenever desired. This account is generally opened by the businessman.
(iii) Fixed Deposit Account: A fixed deposit is repayable after the expiry of the specified period of time. The period may vary from 6 months to 5 years.
Question 23.
Sigma Ltd. took insurance cover of ₹3,00,000 from company A and ₹7,00,000 from company B, against the goods lying in godown. Later goods were damaged due to fire and the loss was estimated at ₹1,50,000.
(i) How much amount will be paid by Company A and B respectively to compensate Sigma Ltd.?
(ii) State and explain the underlying principle. [3]
Answer:
(i) Company A will give ₹45,000 and company B will give ₹1,05,000 as compensation to Sigma Ltd.
(ii) Fire Insurance is a contract, whereby insurer agrees to make goods the loss of insured, caused to good or property due to fire during the specified period of time and up to a specified amount, in return of a premium. The principle of contribution allows the insurer the right to call on other insurers liable for the cost to share the claim payment.
Question 24.
“Retained earnings are better than other sources of finance.” Do you agree with the statement? Give reasons to support your answer. [3]
Answer:
Retained earnings are better than other sources of finance due to the following reasons:
(i) Retained earnings are a permanent source of funds available to an organisation.
(ii) It does not involve any explicit cost in the form of interest, dividend or flotation cost.
(iii) As the funds are generated internally, there is a greater degree of operational freedom and flexibility.
Question 25.
“Equity shares are the best investment avenue for adventurous investors.” Justify the statement by giving your views. [3]
Answer:
Following points justify equity investment as the best investment:
(i) Equity shareholders do not get fixed rate of dividend as in the case of preference shares but they enjoy higher dividends during large profits to the companies. Higher dividends appreciates the market value of equity shares in the market, maximising the shareholder’s wealth.
(ii) It is a source of long-term investment as the equity capital is not redeemable during the lifetime of the company.
(iii) Equity shares provide the voting rights to the shareholders through which they can exercise control over management.
Section- C (12 Marks)
Question 26.
‘Business is an organised institution that operates to provide goods and services under the incentive of private gain’. Discuss. [4]
OR
Explain the following features of business risk :
(i) Business risks arise due to uncertainties.
(ii) Risk is an essential part of every business.
Answer:
Yes, it is right to call business as an institution that provides goods and services for earning profit because of certain characteristics of business.
Following are the main characteristics of business:
Sale or exchange of goods and services for the satisfaction of human needs: Business involves sale or exchange of goods and services. The production of goods or services for self-consumption is not business.
Deals in goods or services on a regular basis: Another important feature of business is that it must sell or exchange goods or services on a regular basis.
Profit motive: The main purpose of business is to earn profit. If the profit motive is missing in a transaction, then it cannot be considered as business transaction.
Risk: Another important feature of business is the presence of risk factor in the transaction.
OR
(i) Business risks arise due to uncertainties: A business can’t have any control over future happenings due to uncertainty about future. Change in demand, change in govt. policy etc. are some of the examples of uncertainty which create risks for business because the happening of these future events is not known in advance.
(ii) Risk is an essential part of every business: Every business is subject to one or the other kind of risk. No business can avoid risk. Though risk can be minimised but can’t be eliminated.
Question 27.
State the different areas where you find Government company to be the most suitable form of public enterprise? [4]
Answer:
Government Company is a suitable form of organisation in public sector where:
- Government wants to promote and develop certain industrial and commercial enterprises in national interest.
- Government wants to control a company in the private sector without nationalisation.
- Government wants to go for collaboration with domestic and foreign enterprises of private sector.
- The business projects require government planning and funds.
Question 28.
A flagship initiative of the Government of India intended to build a strong ecosystem for nurturing innovation and to generate large-scale employment opportunities. Name and explain the scheme that is being mentioned in the above lines. [4]
Answer:
Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and startups in the country that will drive sustainable economic growth and generate large-scale employment opportunities. The Government through this initiative aims to empower startups to grow through innovation and design.
Section – D (15 Marks)
Question 29.
Explain the following terms in brief: [5]
(i) Perpetual succession
(ii) Common seal
Answer:
(i) Perpetual succession: A company being a creation of the law, can be brought to an end only by law. It will only cease to exist when a specific procedure for its closure, called winding up, is completed. Members may come and go out, but the company continues to exist.
(ii) Common seal: The company being an artificial person acts through its Board of Directors. The Board of Directors enters into an agreement with others by indicating the company’s approval through a common seal.
Question 30.
If retail shops are eliminated, what difficulties do you think consumers will face?
OR
“Retailer is an important link in the channel of distribution.” Explain the services he provides to the consumer. [5]
Answer:
If there is no retail shop, a consumer will face a number of difficulties which are stated below:
(i) Without a retail shop, a consumer cannot get continuous supply of commodities.
(ii) It will be difficult to have a wide choice to purchase variety of goods manufactured by various manufacturers.
(iii) A consumer will miss the personalised services and credit facilities provided by retailers.
(iv) A consumer will miss the after-sale services provided by the retail shops.
OR
Services provided by the retailer to the customers are as follows:
Regular availability of the goods: Retailers maintain regular availability of variety of products from different manufacturers. This helps the customers to buy the products of their choice as and when they require.
Information about the goods: By effectively displaying the goods and through personal selling efforts; retailers provide important information about the arrival of the new goods, their special features etc. thus helps them in making their purchase decision.
Convenience in buying: Firstly, retailers are situated very nearer to the residential areas and remain open for long hours. Secondly, retailers sell the goods of desired variety in small quantity according to customers requirement therefore, providing convenience to customers.
Wider choice: Retailers generally keep stock of wide variety of goods, produced by different manufacturers. This enables the customers to make their choice out of the wide variety available to select the best good.
Question 31.
Discuss first five steps of export procedure along with the documents involved in brief.
OR
Write short notes on the following: [5]
(1) Airway bill
(2) Certificate of inspection
(3) Certificate of origin
Answer:
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.
OR
(i) Airway bill: This document is the same as bill of lading with the only difference that it is issued by the airway company and not by the shipping company when goods are transported through airways, then instead of Bill of Lading the exporter gets Airway Bill.
(ii) Certificate of inspection: This certificate is issued by the export inspection agency. This certifies that export consignment has been inspected as per the specification of Export (Quality Control and Inspection) Act.
(iii) Certificate of origin: This certificate is issued by the Chamber of Commerce or by Export Promotion Council or by a government department. This document certifies that the goods to be exported are originally from the home country only or exporter’s country only.
Section – E (18 Marks)
Question 32.
Explain the types of pollution.
OR
What steps can an enterprise take to protect the environment from dangers of pollution? [6]
Answer:
Types of Pollution:
Air Pollution: Air Pollution occurs when air contains harmful substances such as gases, fumes, dust and odour in harmful amount which causes damage to living organisms.
Water pollution: It may be defined as presence of chemicals, industrial waste and other contaminants in such amount that lowers the water quality, which is harmful to living organisms or impairs the beneficial use of water.
Land pollution: It is caused by dumping of toxic wastes on land which damages the quality of land, making it unfit for agriculture or plantation.
OR
The environment is the sum total of all the surroundings both natural and man-made. The quality of the environment is deteriorating fast 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.
(i) State the main objective of DIC.
(ii) How DIC has contributed towards the establishment and development of Small business units?
(iii) Name the organisation which helps to promote rural and women entrepreneurship. [6]
Answer:
(i) The main objective of DIC is to make all necessary services that are required to start and manage rural industries at one place available.
(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.
What are the functions of WTO.
OR
Explain the following documents related to shipment
(i) Shipping bill
(ii) Mate’s receipt
(iii) Marine insurance policy [6]
Answer:
Functions of WTO are:
- Promoting an environment that is encouraging to its member countries to come forward to WTO in mitigating their grievances.
- Laying down a commonly accepted code of conduct with a view to reducing trade barriers including tariffs and eliminating discrimination in international trade relations.
- Acting as a dispute settlement body.
- Ensuring that all the rules and regulations prescribed in the Act are duly followed by the member countries for the settlement of their disputes.
- Holding consultations with IMF and IBRD and its affiliated agencies so as to bring better understanding and cooperation in global economic policy-making.
- Supervising on a regular basis the operations of the Revised Agreements and Ministerial Declarations relating to goods, services and Trade Related Intellectual Property Rights (TRIPS).
OR
(i) Shipping bill: It is the main document on the basis of which permission is granted for the export of goods by the customs office. It contains full details regarding the goods being exported, name of the vessel, exporter’s name and address, country of final destination, etc.
(ii) Mate’s receipt: This receipt is issued by the captain or mate of the ship to the exporter after the goods are loaded on board. It contains the name of the vessel, description of packages, marks, conditions of the cargo at the time of receipt, on board the ship, etc. The bill of lading is not issued by the shipping company unless it receives the mate’s receipt.
(iii) Marine insurance policy: It is a document containing a contract between the exporter and the insurance company to indemnify the insured against the loss incurred by the insured in respect of goods exposed to the perils of the sea transit in consideration of a payment called premium.