ICSE 2013 Commercial Studies Question Paper Solved for Class 10

Solving ICSE Class 10 Commercial Studies Previous Year Question Papers ICSE Class 10 Commercial Studies Question Paper 2013 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Studies Question Paper 2013 Solved

Section – A
(Attempt All Questions)

Question 1.
Distinguish between:
(a) Variable Cost and Semi- Variable Cost. (2)
(b) Savings Account and Current Account. (2)
(c) A Private Warehouse and a Public Warehouse. (2)
(d) A Production Budget and a Sales Budget. (2)
(e) A Brand and a Grade. (2)
Answer:
(a) Difference between Variable Cost and Semi-Variable Cost:

Variable Cost	Semi-Variable Cost
1. Variable costs are those costs which vary in amount that changes in the level of output or activity. Such costs increase and decrease in same proportion in which the level of output increases or decreases.	1. Semi-variable costs are those costs which vary but not in direct proportion to changes in the volume of production. They are a combination of fixed and variable costs.
e.g., Direct material cost and Direct labour cost.	e.g., Telephone charges – Rent remains fixed upto a limited no. of calls and variable with calls made thereafter.

(b) Difference between Savings Account and Current Account:

Saving Account

Current Account

1. To develop habit of saving.

2. Restrictions on number of withdrawals.

1. To carry on business dealings.

2. No restrictions on number of withdrawals.

Private Warehouse	Public Warehouse
1. Private warehouses are owned by manufacturers and traders to store the goods produced or purchased by them until they are sold out.	1. Public warehouses may be owned by Government, Public trusts and other public authorities.
Private warehouses are generally located in rural and suburban areas where space is available at low cost.	Public warehouses are located in places which are well connected by roads, railways, waterways and airways.

(d) Difference between Production Budget and Sales Budget:

Production Budget	Sales Budget
1. It contains an estimate of the total production of a specific period of time.	1. It is a forecast of sales to be achieved during a specific period of time.
Production budget ensures sufficient stock for sales and to manufacture goods in the most economical manner.	Sales budget shows the breakup of total sales productive, territorywise and monthwise.

(e)
Difference between Brand and Grade:

Brand	Grade
It is a process of giving a different name to a particular product by which it is to be known and differentiated from the other similar products.	It is a process of sorting products according to their physical attributes. (i.e., shape, colour, size, quantity, etc.)

Question 2.
(a) Give any two methods used for On-the-Job training. (2)
(b) Explain indirect Cost’. (2)
(c) Why is gratuity given by an employer to an employee? (2)
(d) What is Trademark? (2)
(e) Give two examples of efficient and eco-friendly technology. (2)
Answer:
(a) Two methods of On-the-Job training are:

Coaching : Under this method the employee is trained on-the-job by his immediate superior.
Job Rotation : Under this method the employee is moved from one job to another at planned period of time. This exposure at different levels, makes the employee multi dimensional.

(b) Indirect Cost : It refers to those expenses which are not directly absorbed or chargeable in the process of production, e.g., rent of a factory building.

(c) Gratuity is a time based benefit given to an employee when he leaves his employment after having worked under a specific employer for certain number of years. It is a voluntary payment made by an employer to his employees as a loyalty bonus who retires or leaves the service after a long period of time with a dedicated service record. It grants security to the employees against the risk of old age.

(d) Trade Mark : A trademark must be

distinctive instead of descriptive
affixed to the item sold
registered with the appropriate authority to obtain legal ownership and protection rights. When a Brand name, mark or a symbol is legally registered it becomes a trade mark. Trade mark gives sellers exclusive rights to use the brand name or mark.

(e) Two examples of efficient and eco-friendly technology

Energy efficient technology is a form of eco-friendly technology because with increasing amount of coal or oil being used, not only will exhaust them but also increases the rate of green house gases. This is one main reason for adopting fuel efficient technology in almost all sectors of industry, which results in savings the natural resources for a longer time, providing alternate choice other than them.
Recycling is reusing substances or products. It is an efficient and environment friendly measures to conserve raw materials and nature, e.g., paper industry which turns waste paper into new paper products.

Question 3.
(a) State two expectations of Competitors or Associates from a business concern/enterprise. (2)
(b) Give any two suggestions to draw the attention of viewers to an advertisement ofa product/service marketed by your company. (2)
(c) Briefly explain the concept ‘Marketing Research ’. (2)
(d) What is meant by ‘the Clearing House Function’ of the Reserve Bank of India ? (2)
(e) Explain the term Brand Equity. (2)
Answer:
(a) Two expectations of competitors from a business concern :

To adopt fair trade practices regarding price, quality and service.
To promote co-operation and healthy competition.

(b) Two suggestions to draw attention of viewers to an advertisement:

It should have an conviction value to attract the attention of the viewers, otherwise without being noticed it would be a wasteful expenditure.
A good advertisement should educate the people by providing adequate knowledge about the product or service, which could help the potential customers to reach a buying decision and ease the usage after buying it.

(c) Marketing Research : May be defined as systematic gathering, recording and analysing all facts about marketing problems to facilitate decision making. It involves a careful and objective study of all aspects of marketing. Marketing research is wider term than market research which is a study of only those who
buy and distribute the products. Marketing research includes products study, consumer study, price study and distribution channels study.

(d) Clearing House Function of RBI: RBI settles the claims of commercial banks through a process of book entry in their respective accounts with RBI. It reduces the chances of financial crisis due to cash withdrawal when it is needed more.

(e) Brand Equity : It means the economic value associated with a brand strength to gain more and more brand loyalty. It gives an opportunity to capture and maintain a consistent market share. It provides stability to an organisation’s sales volume and stands for a certain level of quality in a customer’s mind.

Question 4.
(a) Distinguish between a Debit Card and a Credit Card. (2)
(b) State any two rights of a Consumer. (2)
(c) Write a short note on the Chipko Movement. (2)
(d) What do you understand by Audio-visual Communication? (2)
(e) State two advantages of Road Transport over Air Transport. (2)
Answer:

Debit Card	Credit Card
1. The amount holder must have money in his account.	1. The balance in the account is not necessary.
2. As the card holder uses his own money.	2. As the card holder is granted credit by the bank up to a specific limit, on which interest is payable.

(b) Rights of Consumer

Right to Safety : This right protects the customers against the sale of goods which are hazardous to life and property, e.g., electrical equipments, gas cylinders, etc.
Right to be heard: The consumer is free to register his complaint regarding the product at appropriate forums.

(c) Chipko Movement: It is a tree-embracing movement started in April 1973 in Mandal Village in Uttrakhand against felling of trees by forest contractors. It is a spontaneous peoples movement started by the village women based upon non violent resistance reflecting awareness of the local people against environmental degradation. Mr. Chandi Prasad Bhatt and Mr. Sunderlal Bahuguna led the movement from the front.

(d) Audio-Visual Communication : Audio visual communication combine both sound and visual effects the information presented through this mean gives an interesting and attractive form to it, with a greater memorising value.

(e) Advantages of Road Transport over Air Transport:

Door-to-Door Service : Road transport provides complete service by loading the goods at consignor’s place and unloading them at the consignee’s place. There is also no need to wait for fall load shipment.
Feeder Service: Motor vehicles carry goods to terminal points e.g., air ports, railway station, sea ports. They are also used for carrying goods to outlying villages which are not connected by airways or railways.

Section – B (40 Marks)
(Attempt any four questions from this section)

Question 5.
(a) Differentiate between Shareholders and Creditors as Stakeholders of a commercial organisation. (5)
(b) Distinguish between oral communication and written communication. (5)
Answer:
(a)

Shareholders	Creditors
1. Take part in policy decisions.	1. Do not take part in policy decisions.
2. Receives share in the profits as dividend.	2. Receives only interest on their loan.
3. They are internal stake-holders.	3. They are external stake-holders.
4. They share the risk of loss.	4. They do not or are share less risk of loss.
5. They invest capital in the form of share capital in the company.	5. They only give loan to the company for a specific period of time.

(b)

Oral Communication	Written Communication
1. It is a transmission of message through spoken words.	1. It is a transmission of message through written words.
2. It is appropriate during emergent situations as it takes less time in transmitting.	2. It is inappropriate for urgent messages as it takes more time for transmission.
3. It is economical as no use of stationery is there.	3. Usage of stationery makes it costlier.
4. Use of body language facial expressions makes it more impressive.	4. Use of body language is not possible.
5. It is more flexible as changes can be made anytime and immediate feedback is possible.	5. To make changes it takes time which makes it less flexible and immediate feedback is not possible.

Question 6.
(a) How can environment values and ethics be protected? Give reasons to support your answer. (5)
(b) Explain the different sources of Internal Recruitment. (5)
Answer :
(a) Moral principles guiding environmental affairs are called environmental values or ethics. It is concerned with our duty towards our planet.

Environmental ethics and values can be developed in children by parents, teachers and social activities.

Awareness and education about the importance of ecology and its conservation should be taught to the students.
Values are developed more through example and influence than through classroom teaching. The biographies of great men and women can inspire students to become value oriented.
Short stories, film shows and other audio-visual material for students and teachers are also useful.
Suitable training programmes for teachers and parents can be held to enable them to provide value education to young men and women.
All school teachers must be considered as teachers of value education. All subjects must be used to inculcate right values in students.

(b) Internal Sources of Recruitment:

Promotion : This means upgrading an employee to a position of greater responsibility and more salary on the basis of employee’s seniority, merit, job knowledge and career record.
Transfer : This involves shifting of an employee from one job or branch to another without changing the profile and salary. It is used to fill the vacancy at the place to which the employee is transferred.
The employment : This refers to employing the employees who served the organisation in the past but have retired or have quit voluntarily.
Apprentices : Persons working as apprentices in the company may also be hired whenever a vacancy exists.
The existing employees can recommend their relatives or friends about the existing vacancy.

Question 7.
(a) Explain the Experimentation Method of Marketing Research. (5)
(b) ‘Budgets are very useful in Management’. Justify. (5)
Answer :
(a) Experimentation Method of Marketing Research: Under this method consumer’s behaviour, their characteristics, facts on market condition, various forces operating in the market and market trends is analysed. Under this experimentation method, a control market is established in which all forces except those being tested are kept under check and reactions are recorded under controlled conditions to test a theory. It is based on an assumption that small scale experiment will furnish valuable information about a large scale marketing programme.

(b) Importance of Budgets in management: Budgets are prepared on the basis of forecasts, so it gives a sound foundation to the management to think about future. It is based on the objectives to be achieved and a detailed plan of future action which makes the daily operation of a firm easy and smooth. Budgets bring efficiency and economy in the working of a business firm, by making optimum use of the available resources. It promotes the sense of responsibility among the managers, as everybody has a fixed plan of future action to be accomplished. Budgeting inculcates the team spirit which leads to uniformity of policies and united action. It is an important tool of management control, as the output can always be compared to the standards.

Question 8.
(a) Distinguish between the Principle of Indemnity and the Principle of Insurable Interest. (5)
(b) Explain the role of Commercial Banks in the Economic Development of a country. (5)
Answer:
(a)

Principle of Indemnity	Principle of Insurable Interest
The word indemnity means security against loss. It implies a promise to compensate in case of a loss, except life insurance. The-insured will be compensated only upto the amount of loss suffered by him. The insured party cannot make a profit out of this insurance contract.	Every insured person must have a monetary interest, without which no insurance contract is valid legally. A person is said to have an insurable interest in the subject matter insured, if he is benefitted by its existence and suffers a loss by its destruction.

(b)
Role of Commercial Banks in the Economic Development of a Country : Banks mobilise small savings of the public and channelise those savings into productive purpose. This increases the flow of money in any economy, which is the life good of its growth. The role of commercial banks in economic development rests chiefly on their role as financial intermediaries. In this capacity, commercial banks help drive the flow of investment through out the market place through several forms of lending.

Commencal banks can be subdivided into:

(a) Public Sector banks : Public sector banks are managed and controlled by government as the major shareholding in them is of the government. These banks make policies by keeping in view the welfare of people e.g., State Bank of India, Punjab National Bank, Corporation Bank.
(b) Private sector banks : There are managed and controlled by private individuals as a majority of shareholders are from private concern. These work on profit basis. HDFC Bank, ICICI Bank.

It helps an individual to start his business by providing capital and necessary information and then helps in running the business and expanding it by supplying credit as and when required. The aggregate effect of business activity generates employment around the country and promotes self dependency or financial independence. It also helps in transfer of funds from one place to another and help in the settlement of debts which in result promotes trade. Thus banks are the life blood of commerce and holds a significant position in the modern economy of any nation.

Question 9.
(a) Briefly explain any five factors a business person would consider while selecting an appropriate media to advertise his/her product. (5)
(b) What do you understand by ‘Group Insurance ‘? State any three features of Group insurance. (5)
Answer:
(a)

Nature of the Product : The advertisement media should be in accordance with the nature of the product i.e., consumer goods or industrial goods.
Target Customers: Selection of media depends upon the type of target customers to be approached. The target customers are rural, urban or illiterate, males or females, etc.
Duration of Advertisement : Availability of space in print media and time in audio and visual media affect the selection of advertising media.
Cost of Advertisement: If the cost of advertising is lower, it may be adopted by small business enterprises. Costly advertising media will be suitable for enterprises of bigger size.
Popularity of Media : The media should be popular among the concerned class of people for whom the product is meant.

(b) Group Insurance : It is a scheme which provides insurance to many people under one insurance policy. It is generally provided to the employees working under one employer. It is very economical for the employees, it terms of premium payable, as it is very less, due to the government support which encourages it as a strong tool of social security.

The three main features of it are as follows :

Insurance provides risk coverage to the employees as long as they remain in the service of the employer.
It is a contract between the insurance company and the employer.
The premium is generally paid jointly by the employee and the employer.

Question 10.
From the following Trial Balance of Shri Rai Bahadur, prepare Trading, Profit & Loss Account for the year ending 31st March, 2012 and Balance Sheet as on that date. (10)
Trial Balance as on 31,03.2012

Answer:
Trading, Profit and Loss A/c for the year ending 31st March, 2012