Solving ICSE Class 10 Commercial Studies Previous Year Question Papers ICSE Class 10 Commercial Studies Question Paper 2020 is the best way to boost your preparation for the board exams.

ICSE Class 10 Commercial Studies Question Paper 2020 Solved

(Two Hours)

General Instructions

  • Answers to this Paper must be written on the paper provided separately.
  • You will not be allowed to write during the first 15 minutes.
  • This time is to be spent in reading the question paper.
  • The time given at the head of this Paper is the time allowed for writing the answers.
  • Attempt all questions from Section A and any four questions from Section B.
  • The intended marks for questions or parts of questions are given in brackets [ ].

(Attempt All Questions)

Question 1.
Distinguish between:
(a) Advertising and Publicity (2)
(b) Capital and Revenue expenditure (2)
(c) Equity shares and Preference shà res (2)
(d) internal and External Stakeholders (2)
(e) Central Bank and Commercial Bank (2)



(i) It is paid by the sponsor who wants to advertise the product. (i) It is not a paid form of communication.
(ii) A large number of media are used. Based on various factors like cost, type of message, reliability, etc. media are selected. (ii) Mostly, publicity can be carried via newspapers, maga­zines, radio or tele­vision.
(iii) Company has a complete control over advertising. Company can design its adver­tising as per its needs (iii) Company has no control over public­ity in terms of mes­sage, time, frequen­cy and medium.
(iv) Advertising has less credibility. It is con­sidered as company’s efforts to increase sales. (iv) Publicity can be done at a much lower cost than advertising.


Capital Expenditure

Revenue Expenditure

(i) Capital Expenditure is the expenditure incurred for the purchase of fixed assets. (i) Revenue Expenditure is the expenditure incurred for day to day operations of the business and also for maintenance of fixed assets.
(ii) It results in the increase of earning capacity of the organization. (ii) It does not increase the earning capacity but helps maintains the existing capacity of the asset.
(iii) The items are recorded under assets side of the balance sheet. (iii) Items are recorded in trading and profit and loss accounts in the books of accounting.
(iv) The capital expe­nditure is non-recur­ring and one-time in nature. (iv) The revenue expen­diture is recurring and regular in nature.

ICSE 2020 Commercial Studies Question Paper Solved for Class 10


Equity Shares

Preference Shares

(i) Equity shares are the ordinary shares of the company representing the part ownership of the shareholders in the company. (i) Preference shares are the shares that carry preferential rights on the matters of payment of dividend and repayment of capital.
(ii) The dividend is paid after the payment of all liabilities. (ii) Priority in payment of dividend over equity shareholders.
(iii) In the event of winding up of the company, equity shares are repaid at the end. (iii) In the event of winding up of the company, preference shares are repaid before equity shares.
(iv) Equity shares can never be converted. (iv) Preference shares can be converted into equity shares.


Internal Stakeholders

External Stakeholders

(i) The individual and parties that are the part of the organization is known as Internal Stakeholders. (i) The parties or groups that are not a part of the organization, but gets affected by its activities is known as External Stakeholders,
(ii) They serve the organization. (ii) They get influen-ced by the organi- zation’s work.
(iii) Employees, Owners, Board of

Directors, Managers, Inventors etc.

(iii) Suppliers, Customers, Creditors, Clients, Intermediaries, Competitors, Society, Government etc.


Central Bank

Commercial Bank

(i) The bank which looks after the monetary system of the country is known as Central Bank. (i) The establishment, which provides banking services to the public is known as Commercial Bank.
(ii) It is a banker to the banks and the government of the country. (ii) It is the banker to the citizens of the nation.
(iii) It does not exist for making profit for its owners. (iii) It exists for making profit for its owners.
(iv) Public welfare and economic development. (iv) Main motive is earning profits.

ICSE 2020 Commercial Studies Question Paper Solved for Class 10

Question 2.
(a) What is E-tailing ? (2)
(b) What are Fixed Costs ? (2)
(c) What is a Budget ? (2)
(d) Briefly explain Provident Fund. (2)
(e) State two advantages of internal recruitment. (2)
(a) E-tailing is the selling of retail goods on the Internet. Short for “electronic retailing,” and used in Internet discussions as early as 1995, the term seems an almost inevitable addition to e-mail, e-business and e-commerce. E-tailing is synonymous with business-to-consumer (B2C) transaction.

(b) A fixed cost is a cost that does not change over the short term, even if a business experiences changes in its sales volume or other activity levels. This type of cost tends to instead be associated with a period of time, such as a rent payment in exchange for a month of occupancy or a salary payment in exchange for two weeks of services by an employee. It is of some importance to understand the extent and nature of the fixed costs in a business, since a high fixed-cost level requires a business to maintain a high revenue level in order to avoid generating losses. Depreciation, Insurance, interest expenses are some examples of fixed costs.

(c) A budget is a formal statement of estimated income and expenses based on future plans and objectives. In other words, a budget is a document that management makes to estimate the revenues and expenses for an upcoming period based on their goals for the business. Depending upon the requirements, budgets are of various types; Sales budget, Purchases budget etc.

(d) As compulsory, government-managed retirement savings scheme, Provident Fund enables employees to contribute a part of their savings each month towards their pension fund. Over time, this amount gets accrued and can be accessed as a lump sum amount, at the end of their employment or at retirement. The Provident Fund money is a huge amount that helps an employee grow his retirement corpus.

(e) Internal recruitment is cheaper in terms of expenses incurred on recruitment. It takes much less time to hire someone from within and the whole process is a lot more certain.

Question 3.
(a) State two advantages of Campus Recruitment as an external source of recruitment. (2)
(b) What do ýou mean by E-security? (2)
(c) What is meant by Industrial Relations? (2)
(d) Briefly explain the principle of Utmost good faith of insurance. (2)
(e) The Central Bank is a banker c bank. Explain in brief (2)

  • The campus recruitment helps you to assess a pool of best or talented employees for the job you need to fill. In this increased chance, the company receives a variety and number of candidates who owns knowledge and ability to handle that job.
  • When a company goes with an external recruitment method, there is a quite better possibility of finding and identifying a fresher candidate who is capable of delivering new skills and inputs for the betterment of the company.

(b) E-security pertains to the security of personal data and other information stored over the Internet. It is also called information security. It is a set of practices intended to keep data secure from unauthorized access or alterations.

ICSE 2020 Commercial Studies Question Paper Solved for Class 10

(c) The industrial Relations encompasses the relationship between the management and workmen and the role of a regulatory body to resolve any industrial dispute. IR plays a significant role in today’s working scenario where the harmonious relationship between the employers and employees is needed to have an uninterrupted production.

(d) The doctrine of utmost good faith is a principle used in insurance contracts, legally obliging all parties to act honestly and not mislead or withhold critical information from one another.
Insurance agents must reveal critical details about the contract and its terms, while applicants are required to provide honest answers to all the questions fielded to them.
Violations of the doctrine of good faith can result in contracts being voided and sometimes even legal action.

(e) The Central Bank is the apex body of the banking system. It supervises, co-ordinates and controls the operations and activities of the commercial banks. As their bank it undertakes following functions:

• Custodian of Cash Reserve : It is a legal tradition that all commercial banks should keep a certain portion of the demand and time deposits with the Central Bank of the country. This proportion is called cash reserve ratio. This minimum cash reserve requirement can be changed by the Central Bank.
The Central Bank pays interest to the banks on cash reserve ratio balances.
The cash reserve ratio enables the Reserve Banks of India to advance funds to banks that face temporary liquidity crisis. It is also an instrument of credit control.

• Lender of last Resort : The Central Bank acts as a lender of last resort to commercial banks. Whenever any commercial bank faces liquidity problems, the Central Bank provides funds to overcome crisis. ‘The lender of last resort’ function of central bank helps to control panic and infuses confidence among the banks as well as the public. Hence, during financial difficulties or crisis commercial banks can always depend on central bank for the required assistance.

Question 4.
(a) Briefly explain any two types of Selection tests. (2)
(b) What are Bonded Warehouses? (2)
(e) What do you mean by Insurance? (2)
(d) State any two features of the Consumer Protection Act. (2)
(e) Explain in brief Credit Card Fraud. (2)
(a) Two types of selection tests are:

  • Aptitude Tests : These tests aim at measuring if an individual has the capacity or latent ability to learn a given job, in case he is given adequate training. Intelligence test and clerical aptitude are the types of Aptitude Test.
  • Situational Tests : This test makes evaluation of a candidate in a similar real life situation. The candidate is asked either to cope with the situation or solve critical situations of the job. Group discussion is one of the situational tests.

(b) Bonded warehouses are used when you do not need to take immediate delivery in India of the non-exempt, imported items.
Using a bonded warehouse, Indian customs duties are not payable when goods are deposited into the bonded warehouse located in India. Customs duties are paid when the items are removed (de-bonded) from the bonded warehouse.

(c) Insurance is a legal agreement between two parties i.e. the insurance company (insurer) and the individual (insured). In this, the insurance company promises to make good the losses of the insured on happening of the insured contingency.

The contingency is the event which causes a loss. It can be the death of the policyholder or damage/destruction of the property. It’s called a contingency because there’s an uncertainty regarding happening of the event. The insured pays a premium in return for the promise made by the insurer.

(d) Consumer Protection Act has the following features:

  • Coverage of Items: This Act is applicable on all the products and services, until or unless any product or service is especially debarred out of the scope of this Act by the Central Government.
  • Coverage of Sectors : This Act is applicable to all the areas whether private, public or cooperative.

(e) Credit card fraud happens when someone — a fraudster or a thief — uses your stolen credit card or the information from that card to make unauthorized purchases in your name or take out cash advances using your account.

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

Question 5.
(a) Explain any five objectives of Markeing. (5)
(b) What is ERP ? Explain any three modules of the ERP System. (5)
(a) Objectives of the marketing are:

  • Creation of Demand : The marketing management’s first objective is to create demand through various means. A conscious attempt is made to find out the preferences and tastes of the consumers. Goods and services are produced to satisfy the needs of the customers. Demand is also created by informing the customers the utility of various goods and services.
  • Customer Satisfaction : The marketing manager must study the demands of customers before offering them any goods or services. Selling the goods or services is not that important as the satisfaction of the customers’ needs. Modem marketing is customer-oriented. It begins and ends with the customer.
  • Market Share : Every business aims at increasing its market share, i.e., the ratio of its sales to the total sales in the economy. For instance, both Pepsi and Coke compete with each other to increase their market share. For this, they have adopted innovative advertising, innovative packaging, sales promotion activities, etc.
  • Generation of Profits : The marketing department is the only department which generates revenue for the business. Sufficient profits must be earned as a result of sale of want-satisfying products. If the firm is not earning profits, it will not be able to survive in the market. Moreover, profits are also needed for the growth and diversification of the firm.
  • Creation of Goodwill and Public Image: To build up the public image of a firm over a period is another objective of marketing. The marketing department provides quality products to customers at reasonable prices and thus creates its impact on the customers.

ICSE 2020 Commercial Studies Question Paper Solved for Class 10

(b) ERP stands for Enterprise Resource Planning and refers to software and systems used to plan and manage all the core supply chain, manufacturing, services, financial and other processes of an organization.

Modules of ERP:

• Human Resource Module(HR) : Human Resource module helps to HR team for efficient management of human resources. HR module helps to manage employee information, track employee records like performance reviews, designations, job descriptions, skill matrix, time & attendance tracking. One of the important submodules in the HR module is Payroll System which helps to manage salaries, payment reports etc. It can also include Travel Expenses & Reimbursement tracking. Employee Training tracking can also be managed by ERP.

• Inventory Module : Inventory module can be used to track the stock of items. Items can be identified by unique serial numbers. Using that unique numbers inventory system can keep track of item and trace its current location in the organization.

• Sales Module : Typical sales process includes processes like Sales queries, inquiry analysis and handling, quotation drafting, accepting sales orders, drafting sales invoices with proper taxation, dispatch/ Shipment of material or service, tracking pending sales order. All these sales transactions are managed by the sales module of ERP.

ICSE 2020 Commercial Studies Question Paper Solved for Class 10

Question 6.
(a) State any five expectations of employees from a business organization. (5)
(b) Describe any five utilities of a budget. (5)
(a) Employee expectations include :

  • Timely and accurate payment of wages. They expect that their payment should be made on time.
  • Adequate training. They expect trainings for existing as well as new work.
  • Safe working conditions. A business organization should provide them safe working conditions in terms of building, health conditions etc.
  • Full explanation of all company policies and especially of their job responsibilities and fair and constructive feedback from their supervisor.
  • Recognition of their work. They expect that their work and knowledge should be recognized and be a part of future elevation process.

(b) There are many utilities of budgets.

  • Control income and expenditure.
  • Establish priorities and set targets in numerical terms.
  • Provide direction and co-ordination, so that business objectives can be turned into practical reality.
  • Assign responsibilities to budget holders (managers) and allocate resources.
  • Communicate targets from management to employees
  • Improve efficiency
  • Monitor performance

Question 7.
(a) Explain any five merits of road transport. (5)
(b) Explain: (5)
(i) ATM
(ii) Debentures
(a) Merits of road transport are :

  • Less Investment: Roads need less capital than the railways. Laying of railway line needs much capital than road.
  • Door to Door Service: Railways have the drawback that they cannot go to each village while road transport provides door to door service.
  • Flexibility in Service : Unlike railways, the road transport provides flexible service to men and materials.
  • Employment: Road transport provides employment to many persons directly and indirectly.
  • Useful for Small Distances : While railways are useful in long distances, road transport is useful in small distances.


(i) ATM means Automated Teller Machine. It is used for making financial transactions from a bank account. These machines are used to withdraw money from personal bank accounts.
This makes banking process very easy because these machines are automatic and there is no need of human cashier for transaction. The ATM machine can be of two types; one with basic functions where you can withdraw cash and another one with more advanced functions where you can also deposit cash.

(ii) A debenture is one of the most typical forms of long-term loans that a company can take.
It is normally a loan that should be repaid on a specific date, but some debentures are irredeemable securities (sometimes referred to as perpetual debentures). The majority of debentures come with a fixed interest rate. This interest must be paid before dividends are paid to shareholders. In the US, most debentures are unsecured, but elsewhere debentures are typically seemed through the borrower’s assets.

Question 8.
(a) Explain any five features of the Environment Protection Act. (5)
(b) Briefly, explain any five benefits of advertising to producers. (5)
(a) The Environment Protection Act has been brought into force from November, 1986. Its salient features are :

  • Take all necessary measures for protecting quality of environment.
  • Co-ordinate actions of States, officers and other authorities under this Act.
  • Plan and execute a nationwide programme for prevention, control and abatement of environmental pollution.
  • Lay down standards for discharge of environmental pollutants.
  • Empower any person to enter, inspect, take samples and test.
  • Restrict areas in which any industries, operations or processes may not be carried out subject to certain safeguards.
  • Issue directions to any person, officer or authority including the power to direct closure, prohibition or regulation of any industry, operation or process.

ICSE 2020 Commercial Studies Question Paper Solved for Class 10

(b) Benefits of advertising to the producers are :

  • It increases the Sales Volume : Advertising increases the sales volume of the product. Hence mass production is possible. This leads to reduction in the cost of production.
  • It increases the Net Profit: It increases the net profit by a higher turnover of sales. It leads to higher volume of production. Hence average cost of production is less and the profit will increase.
  • It ‘stabilizes the Sales Volume : Stabilization of sales volume is possible through advertising by the process of repetition. Regular and frequent advertising leads to regular flow of sales. It gives the name, location, products and services of the selling houses to the public often. During slump period, advertising tends to ensure a permanent class of customers to buy the product.
  • It controls Product Price: Control of wholesale and retail price is possible by means of advertisement. The needy retailers are overcharged by some greedy wholesalers. The retailers charge higher prices for the products. Hence the consumers do not want to buy such products. This will lead to reduction in sales. Hence manufacturers print on the cover or announce the retail price of the product.
  • It helps in Opening New Market : Advertising is helpful in opening or creating new markets. It helps to get leadership in the market. It helps the manufacturers to take decision whether to expand the market share or not. It also helps them to sell new products or improved variety of products.

Question 9.
(a) What are the various ways by which consumers are exploited ? (5)
(b) Explain: (5)
(i) NEFT
(ii) RTGS
(a) Consumers are exploited in the following five ways :

  • Sale of adulterated goods, i.e., addition of inferior substances to the product being sold.
  • Sale of sub-standard goods, i.e., sale of goods which do not confirm to the prescribed quality standards.
  • Use of false weights and measures leading to losses.
  • Supply of defective goods.
  • Misleading advertisements, i.e. advertis-ements falsely claiming a product or service to be of a superior quality, grade or standard.

(b) (i) NEFT: National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to- one funds transfer. Under this scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the scheme. In NEFT, funds from ? 1 to unlimited value can be transferred.

(ii) RTGS : RTGS means Real Time Gross Settlement. It can be defined as the continuous (real-time) settlement of funds. ‘Real Time’ means the processing of instructions at the time they are received rather than at some later time. ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable. Minimum limit for RTGS funds is ₹ 2 lakh and there is no upper limit.

Question 10.
From the following Trial Balance ofA.B. Chandra as on 31st December, 2019. (10)
Trail Balance of A. B. Chandra as on 31.12.2019
ICSE 2020 Commercial Studies Question Paper Solved for Class 10 1
The closing stock was valued at ₹ 12,000.
You are required to prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2019 and a Balance Sheet as on 31st December, 2019.
A. B. Chandra
Trading and Profit & Loss Account for the year ended 31-12-2019
ICSE 2020 Commercial Studies Question Paper Solved for Class 10 2
ICSE 2020 Commercial Studies Question Paper Solved for Class 10 3