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Kerala Plus One Business Studies Model Question 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.

Plus One Business Studies Previous Year Question Papers and Answers

Kerala Plus One Business Studies Model Question Paper 1

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 7. Each carries 1 score.

Question 1.
Identify the type of business organization to which the registration is compulsory.
a. Sole proprietorship
b. Partnership business
c. Joint stock company
d. Hindu Undivided Family Business

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

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

Question 4.
A business firm decided to help the affected people in Okhi cyclone. It belongs to the responsibility of the business.
a. Discretionary
b. Legal
c. Economic
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

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…………..? ………………

Question 7.
The apex banking institution set up to promote agriculture and rural development in India is …………..

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

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

Question 10.
Write any two merits of a government company.

Question 11.
Identify the type of E-business transaction referred to in the following cases.
a. A dealer in Kerala places an order through email to Marathi Udyog LTD. for a supply of 20 cars.
b. Ms. Anasooya placed an order for a smartphone through online.

Question 12.
Explain the concept of business ethics with the help of an example.

Question 13.
List out any two problems faced by a small-scale business of India.

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

Question 15.
Write a short note on export processing Zone.

Question 16.
Stae any two objectives of the small-scale business.

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

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.

Question 18.
Explain any three features departmental undertakings.

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

Question 20.
Write any three ways in which a business organization can enter into international Business.

Question 21.
Explain any three schemes announced by the Government of Indian in Export-Import policy (EXIM policy) for the promotion of foreign trade.

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.
Identify the type of partners in the following cases:
a. Mr. Nirmal contributed Rs.l lakh as capital in Maithri Traders but do not participate in the 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 Rs 1 lakh as capital in Maithri Traders and participate s in the conduct of business.

Question 24.
Write any four benefits of E-banking.

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

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

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

Question 27.
“Risk is an essential part of every business.” Explain its causes.

Question 28.
State any three responsibilities of business towards employees and any two towards consumers.

Question 29.
Who are promoters? Briefly explain any four functions performed by them.

Question 30.
Write any five advantage of equity shares as sources of finance.

Answer any 2 questions from 31 to 33. Each 4 carries 8 scores.

Question 31.
Identify the business organization formed voluntarily by a group of people for mutual benefits, Following the principle of “one man one vote”. Also, explain its four merits and three limitations.

Question 32.
Explain the major principles of insurance.

Question 33.
Explain any four services each rendered by wholesalers to manufactures as well as to the retailers.

Answers

Answer 1.
Joint Stock Company

Answer 2.
Mining

Answer 3.
Bonded Warehouses

Answer 4.
Discretionary

Answer 5.
Certificate of Incorporation

Answer 6.
Fixed capital requirement

Answer 7.
NABARD

Answer 8.
Internal trade

Answer 9.
Bill of entry

Answer 10.
1. A government company can be established by fulfilling the requirements of the Indian companies act.

2. It has a separate legal entity, apart from the government.

Answer 11.
a. B2B Transaction
b. B2C Transaction

Answer 12.
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 people’s confidence and trust, and leads to greater success.

Answer 13.
1. Finance

One of the severe problems faced by SSIs is that of non-availability of adequate finance to carry out its operations. Many of the units in the small sector lack the creditworthiness required to rise as capital from the capital markets.

2. Raw Materials
Another major problem of small business is the procurement of raw materials. If the required materials are not available, they have to compromise on the quality or have to pay a high price to get good quality materials.

Answer 14.
Soft drinks, Chocolate

Answer 15.
Export Processing Zone

These are set up to increase production for exports. These are industrial estates which form enclaves within the national customs territory. They are usually located near the international airport or seaport. There are several export processing zones in India. They are

Answer 16.
1.Provide employment opportunity

They generate a number of employment opportunities per unit of capital invested compared to large industries.

2. Variety of Products

Small industries in our country supply an enormous variety of products which include mass consumption goods, readymade garments, hosiery goods, stationery items, soaps and detergents, domestic utensils, leather, plastic and rubber goods, processed foods and vegetables .wood and steel furniture, paints, varnishes, safety matches, etc

Answer 17.
a. Synthetical industry

b. Analytical industry

C. Assembling industry

Answer 18.
1. It is a large scale retail organization

2. It makes centralized purchasing

3. It is located in towns and cities

Answer 20.
1. Exporting and Importing

Export refers to the sending of goods and services for sale from the home country to foreign countries. Importing means purchasing of goods and services from foreign countries for domestic use. It is one of the methods to enter into International Business.

2. Contract Manufacturing.

It is a type of international business where a company enters into a contract with a local manufacturer in a foreign country. The contract is for getting certain components or goods produced as per specifications ‘ given. Contract manufacturing also called outsourcing can take the following three forms:

3. Licensing and Franchising

Licensing in international business is a contractual agreement in which one firm permits another firm in a foreign country to access its trademark, patents or technology for a fee called royalty. The firm which gives permission is called licensor and to whom it is given is called licensee. Franchising is somewhat similar to licensing.

The difference is that in the case former it is concerned with production and marketing of goods while franchising is connected with the provision of services. Franchising is relatively more stringent than licensing. The parent company is called the franchiser and the party to whom a franchise is granted is called the franchise.

Answer 21.
1. Export processing zones(EPZs)

EPZs have been set up to provide an internationally competitive duty-free environment for an expense. Govt has taken initiative to provide infrastructural facilities in these zones to produce goods at lower cost.

2. Cent percent export-oriented units

These units are set up for the export of the entire products. They can be set up anywhere in India. They get all the benefits provided to units in the EPZ

3. Special economic zones (SEZs)

It has been created to encourage free trade.
Its being treated as a deemed foreign territory for duty purposes. Goods going into the SEZs area from the domestic tariff area (DTA) are treated as deemed exports.

Answer 22.
a. Indian Railways Departmental undertaking
b. LIC of India Statutory corporation
c. BHEI Government company
d. Honda Ltd Multinational company
Answer 23.
a. Sleeping partner or dormant partner
b. Nominal partner
c. Partner by holding out
d. Active partner

Answer 24.
1. e-banking provides 24hours, 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.

Answer 25.
Long-Term Sources
Retained earnings Preference Shares Debentures Equity Shares
Short Term Sources
Factoring Bank overdraft Commercial paper Trade creditors

Answer 26.
I agree with this statement. BPO (Business Process Outsourcing is a system of getting a business task accomplished through an outside agency. Eg, transportation of raw materials into the factory may be entrusted to a transport company.

Following are the importance of outsourcing
1. Focusing on attention

Outsourcing benefits the organization by focusing on core areas and contracting out non-core business.

2. Quest for excellence

Outsourcing enables the firms to pursue excellence through a division of labor and specialization.

3. Cost reduction
It helps the organization to get an expert and specialize services at competitive prices. It helps in improved service and reduction in costs.

4. Growth through alliance

To the extent you can avail of the services of others, your investment requirements are reduced, others have invested for you. Therefore you can expand rapidly.

5. Fillip to economic development

Outsourcing helps in stimulating entrepreneurship, employment, and exports in the host countries. This will result in economic development.

Answer 27.
1. Natural Causes

it includes natural calamities like earthquake, flood, lightning, heavy rains, famine etc.

2. Human Causes
It includes dishonesty, carelessness negligence of employees, stoppage of work due to power failure, riots, management inefficiency etc.

3. Economic causes:
demand, change in price, competition, technological changes etc.

4. Other causes:

It includes political disturbances, fluctuation in exchange rates, a change in govt, policies etc.

Answer 28.
The responsibility of business towards employees

1. It is the social and moral responsibility of the business to pay reasonable wage and salaries to Employees.

2. They must be provided with good work I ing conditions security of the job, medical benefits etc.

3. Respect democratic rights of workers to form unions. The responsibility of business towards consumers

1. Supply of right quality and quantity of goods and services to consumers at reasonable prices, They have the right of information about the product, price, the company etc

2. Avoiding unfair trade practices

Answer 29.
A Person who undertakes to form a company and take necessary steps for the same are called promoter.

Following are the functions of a promoter.
1. Identification of business opportunity: The first and foremost activity of a promoter is to identify a business opportunity and analysis of the same.

2. Feasibility studies: After identifying a business opportunity, promoter undertakes detailed feasibility studies such as technical feasibility, financial feasibility & economic feasibility studies to determine the viability and profitability of the proposed business.

3. Name approval: After selection of a name for the company, the promoters submit an application to the registrar of companies for its approval the selected name should not be same or identical to the name of 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.

Answer 30.
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.

Merits

• It is suitable for investors who are willing to assume the risk for higher returns
  
• Payment dividend is not compulsory
  
• It serves as permanent capital as it is to be repaid only at the liquidation of a company.
  
• Equity shares do not create any charge on the assets of the company
  
• They have the right to vote and participate in the management.
  

Answer 31.
COOPERATIVE SOCIETY
The cooperative society is a voluntary association of persons, who join together with the motive of the welfare of the members. It is compulsorily required to be registered under the Co-operative Societies Act. 1912. At least ten persons required to form a society. The capital is raised from its members through an issue of shares.

Merits
a. Equality in voting status The principle of ‘one man one vote’ governs the cooperative society. Each member is entitled to equal voting rights.

b. Limited liability

The liability of the member of co-operative society is limited to the extent of their capital contribution.

C. Stable existence the retirement, death, insolvency or insanity of the members do not affect the continuity of a cooperative society.

d. Support from government

Cooperative society gets support from the government in the form of taxes, subsidies, and low-interest rates on loans.

limitations
a. Limited resources Resources of cooperative society consist of social capital contribution by members.

b. Inefficiency in management

Cooperative societies are unable to attract and employ expert managers because of their inability to pay them high salaries.

C. Lack of secrecy

As a result of an open discussion in the meeting.

Answer 32.
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.

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.

Answer 33.
1. Services to manufacturers;
a. Facilitate large-scale production;

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

b. Bearing risk

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

C. Financial assistance
Wholesalers provide financial assistance to manufactures b means they make ready cash payment for purchases and even advance money to producers.

d. Expert advice

As wholesalers are in direct contact with retailers they provide useful information regarding customer taste and preference and market condition to manufacturers.

Services to retailers:

a. Availability of goods:

The wholesalers make the products of 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

Wholesalers provide credit facilities to retailers.

d. Specialized knowledge:

The wholesalers specialize in one line of products and know the pulse of the market. So they offer expert advice to retailers.

Plus One Business Studies Previous Year Question Papers and Answers

Kerala Plus One Business Studies Improvement Question Paper 2018

General Instructions to candidates

• There is a ‘cool off-time’ of 15 minutes in addition to the writing time.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read the instructions carefully.
• Read the questions carefully before answering.
• 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 the following questions from 1 to 7. Each carries 1 score.

Question 1.
Fill as per the hint is given.
a. Hindrance of place Transportation
b. Hindrance of place

Question 2.
TATA Ltd., purchases tires from MRF Ltd.
This is an example of.
a. B2C Commerce
b. C2C Commerce
c. Intra B Commerce
d. B2B Commercepops

Question 3.
Rules regarding Internal management of a company is mentioned in the
a. Memorandum of Association
b. Articles of Association
c. Prospectus
d. Certificate of incorporation

Question 4.
They are petty retailers who have independent shops of a temporary nature and change their business from one locality to another,
a. Peddlers
b. Street traders
c. Cheap jacks
d. Market traders

Question 5.
Identify the first step in the export procedure.
a. Receipt of inquiry and sending quotations
b. Obtaining export license
c. Receipt of order or indent
d. Production or procurement of goods

Question 6.
These are warehouses licensed by the Government to accept imported goods prior to payment of tax and customs duty.
a. Private warehouses
b. Public warehouses:
c. Government warehouses
d. Bonded warehouses

Question 7.
Access international, a computer training institute located in London, allows C-Tech Computer Education of India, to use their logo and name for a consideration, this is an example of
a. Contract manufacturing
b. Licensing
c. Franchising
d. Joint venture

Fill in the blanks. The question carries 2 scores.

Question 8.

Answer any 6 questions from 9 to 15. Each carries 2 scores.

Question 9.
‘Charging fair prices from customers’ is an example for business ethics. Give two more examples of business ethics.

Question 10.
Some business organizations outsource their debt collection to outside agencies. Name this arrangement. List one merit of it.

Question 11.
For providing support to small-scale units, the government has formed many supporting institutions. List out any two.

Question 12.
GAMA Traders get the orders through a post and they deliver the products through the mail. Identify the form of retail outlet mentioned here and also state an advantage of it.

Question 13.
Fill in the blanks

Question 14.
Coparceners are the members of HUF business. Who is the head of such a business? Comment on his liability.

Question 15.
Railways and Post and Telegram are the examples of this type of public sector undertakings. Identify the type of PSU and give two features of it.

Answer any 3 questions from 17 to 20. Each carries 3 scores.

Question 16.
It is an arrangement where the owner of an asset, grants the other party the right to use the asset, in return for a periodic payment.
a. Name the arrangement
b. Name the owner and user in this arrangement.

Answer any 3 questions from 17 to 20. Each carries 3 scores.

Question 17.
For the upliftment of small-scale sector, Government provides various incentives. Briefly explain any three of them.

Question 18.
I am my own boss, everything is under my control”. For which form of business organization the above statement is CORRECT? Give any two merits of such business.

Question 19.
Export Processing Zone(EPZ) is one of the measures of foreign trade promotion. Brei fly explains it with an example.

Question 20.
Identify the public sector undertaking created by the Indian Companies Act 1956. List any two merits of it.

Question 21.
Match the following.

Answer any 3 questions from question numbers 22 to 25. Each carries 4 scores.

Question 22.
List any four benefits of international business to our country.

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

Question 23.
Identify the type of partners in the following cases:
a. Mr. Nirmal contributed Rs.l lakh as capital in Maithri Traders but do not participate in the 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 Rs 1 lakh as capital in Maithri Traders and participate s in the conduct of business.

Question 24.
Write any four benefits of E-banking.

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

Question 26.
“Outsourcing of noncore activities are beneficial to business units.”Do you agree? Comment on this statement by highlighting your views.

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

Question 27.
“Risk is an essential part of every business.” Explain its causes

Question 28.
State any three responsibilities of business towards employees and any two towards consumers.

Question 29.
Who are promoters? Briefly explain any four functions performed by them.

Question 30.
Write any five advantage of equity shares as a source of finance.

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

Question 31.
Identify the business organization formed voluntarily by a group of people for mutual benefits, Following the principle of “one man one vote”. Also, explain its four merits and three limitations.

Question 32.
Explain the major principles of insurance.

Question 33.
Explain any four services each rendered by wholesalers to manufactures as well as to the retailers.

Answers

Answer 1.
Hindrance of risk Insurance

Answer 2.
B2B Commerce

Answer 3.
Articles of Association

Answer 4.
Cheap jacks

Answer 5.
Receipt of inquiry and sending quotations

Answer 6.
Bonded warehouses

Answer 7.
Franchising

Answer 8.
Extractive Industry Service Industry

Answer 9.
a. Using fair weights for measurement to from modities.
b. Giving fair treatment to workers
c. Earning reasonable profits
d. Lack of desired services and country to consumers
e. Misleading and dishonest advertising

Answer 10.
Factoring or Outsourcing / BPO Merits Outsourcing helps in stimulating entrepreneurship, employment, and exports in the host countries. This will result in economic development.

Answer 11.

1. NABARD
2. SIDBI

Answer 12.
Mail order business

it is a kind of retail business which receive and deliver the goods through the mail. Goods are delivered to customers only on making full payment for the same and the goods may be sent by value payable post (VPP).

Advantage

It requires only limited capital as it does not require heavy expenditure on building and other infrastructural facilities.

• Elimination of middlemen between the buyer and seller
  

Answer 13.

Answer 14.
Head of the business Karta Liability of Karta is unlimited.

Answer 15.
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.

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.
   

Answer 16.
a. Leasing
b.
Owner – Lessor
User – Lessee

Answer 17.
Land

Every State offers developed plots for setting up of industries.

Power

Power is supplied at a concessional rate of 50 percent.

Water use
Water is supplied on a nonprofit, no loss basis or with 50 percent concession or exemption from water charges for a period of 5 years,

Sales Tax

In all union territories, industries are exempted from sales tax, while some states extend an exemption for 5 years period.

Answer 18.
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.
  

Answer 19.
Export Processing Zone

These are set up to increase, production for exports. These are industrial estates which form enclaves within the national customs territory. They are usually located near the international air airport seaport. There are several export processing zones in India. They are

1. Kandla Export Processing Zone
   
   (KEPZ), Kanld a Gujarat.
2. Santa Cruz Electronic Export Processing Zone
   
   Bombay.
3. Noida Export Processing Zone
   
   (NEPZ), Noida, up.

Answer 20.
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.

Merits

1. A government company can be established by fulfilling the requirements of the Indian companies act.
   
2. It has a separate legal entity, apart from the government.
   
3. It enjoys autonomy in decision making.
   

Answer 21.

Answer 22.
a. Earning of Foreign exchange
b. More efficient use of resources
c. Improving growth prospects and employment potentials
d. Increased standard of living

Answer 23.
1. Natural Causes

it includes natural calamities like earthquake, flood, lightning, heavy rains, famine etc.

2. Human Causes

It includes dishonesty, carelessness or negligence of employees, stoppage of work due to power failure, riots, management inefficiency etc.

3. Economic Causes
It includes changes in demand, change in price, competition, technological changes etc.

4. Other causes

It includes political disturbances, fluctuation in exchange rates, a change in govt, policies etc.

Answer 24.
Partnership deed

The written agreement which specifies the terms and conditions that govern the partnership is called the partnership deed.

The partnership deed generally includes the following aspects

1. Name Of firm
   
2. Nature of business and location of a business.
   
3. Duration of business
   
4. Investment made by The investmenter
   
5. Distribution of profits and losses
   
6. Duties and obligation of the partners
   
7. Salaries and withdrawal of the partners
   

Answer 25.
Joint Ventures

This is a very common mode of entering into international business. Joint venture means starting a firm which is jointly owned by two or more otherwise independent firms. A joint venture comes into being in three major ways:

• Increased resources and capacity
• Access to new markets
• Access to technology
• Innovation
• Low cost of production
• Established brand name

Answer 26.

Answer 27.
Outsourcing

“BPO (business Process Outsourcing) is a system of getting business tasa k accomplished through an outside agency. Eg, transportation of raw mate rials into the factory may be entrusted to a transport company.

Benefits of outsourcing
1. Focusing of attention

Outsourcing benfits the organization by focusing on core areas and contracting out non-core business.

2. Quest for excellence

Outsourcing enables the firms to pursue excellence through division of labour and specialization.

3. Cost reduction

It helps the organization to get an expert and specialize services at competitive prices. It helps in improved service and reduction in costs.

4. Growth through alliance

To the extent you can avail of the services of others, your investment requirements are reduced, others have invested for you. Therefore you can expand rapidly.

5. Fillip to economic development

Outsourcing helps in stimulating entrepreneurship, employment, and exports in the host countries. This will result in economic development.

Answer 28.
Arguments for Social Responsibility

1. A 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.

3. Avoidance of government regulation

From the point of view of a business, government regulations are undesirable because they limit freedom. Therefore, it is believed that businessmen can avoid the problem of government regulations by voluntarily assuming social responsibilities. Which helps to reduce the need for new laws.

4. Maintenance of society

The argument here is that laws can not be passed for all possible circumstances. People who feel that they are not getting their due from the business may resort to anti-social activities, not necessarily governed by law.

5. Availability of resources with business

This argument holds that business institutions have valuable financial and human resources which can be effectively used for solving problems.

6. Converting problems into opportunities

Related with the preceding argument is the argument that business with its glorious history of converting risky situations into profitable deals, cannot only solve social problems but it can also make them effectively useful by accepting the challenge.

7. A better environment for doing business

If the business is to operate in a society which is full of diverse and complicated problems. It may have little chance of success. Therefore, it is argued that the business system should do something to meet needs before it is confronted with a situation when its own survival is endangered due to enormous social illnesses.

8. Holding business responsible for social problems

It is argued that some of the social problems have either been created or perpetuated by business enterprises themselves. Environmental pollution, unsafe workplaces, corruption in public institutions, and discriminatory practices in employment are some of these problems.

Arguments Against Social Responsibility

1. Violation of profit maximization objective

According to this argument, business exists only for profit maximization. Therefore any talk of social responsibility is against this objective.

2. Burden on consumers ”

It is argued that social responsibilities like pollution control and environmental protection are very costly and often require huge financial investments.

3. Lack of social skills

All social problems can not be solved the way business problems are solved. In fact, the businessman does not have the necessary understanding and training to solve social problems.

4. Lack of broad public support

Here the argument is that the public, in general, does not like business involvement or interference in social programs.

Debenture

A debenture is an instrument issued by company raising long-term debt capital, under its seal to acknowledge its debt. Debenture holders are creditors of the company. It bears a fixed rate of interest.

Merits

• Interest on debentures is a tax deduvtible expense.
  
• They guarantee a fixed rate of interest.
  
• Debentures are less costly as compared to a cost of preference shares.
  
• Debentures can be redeemed at any time when a company has surplus fund.
  
• They have no voting rights. So, control of management is not affected.
  

Answer 30.
1. Services to producers:
a. Facilitate large-scale production:

Bulk orders from wholesalers enable the producers to undertake 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 take 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.

d. Expert advice aflracoGraoonjcrauoo

As wholesalers are in direct contact with retailers they provide useful information regarding customer taste and preference and market conditions to manufacturers.

e. Help in marketing function:
Functions of wholesalers relieve producers from many of the marketing activities and enable them to concentrate on the production activity.

f. Facilitate production continuity by purchasing the goods and when these are produced

g. Storage/warehousing of goods produced

2. Services to retailers:

a. Availability of goods:

The wholesalers make the products of various manufacturers readily available to the retailers.

b. Marketing support:

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

c. Gant of credit;

Wholesalers provide credit facilities to retailers.

d. Specialized knowledge:

The wholesalers specialize in one line of products and know the pulse of the market. So they offer expert advice to retailers.

e. Risk sharing

Wholesalers sell goods to retailers in small quantities and thus retailers do not face the risk of storage, pilferage, obsolescence etc.

Answer 31.
Stages of formation

1. Promotion
   
2. Incorporation
   
3. Subscription of capital
   
4. Commencement of business
   

1. Promotion

Promotion is the initial stage in the formation of a company. Promotion simply means the sum total of all activities which are necessary for bringing the company into existence.

2. Incorporation

In the legal sense, a company comes into existence only after its incorporation. For this, an application accompanied by the following documents are to be prepared and filed with the registrar of companies with the prescribed fee by the promoters.

a. The memorandum of association duly stamped .signed and witnessed
b. Articles of association duly stamped, signed and witnessed
c. Written consent of the proposed directors
d. An agreement, if any, with proposed director
e. A copy of the registrars’ letter approving the name of the company
f. Statutory declaration
g. A notice about the extracted address of the registered office
h. Documentary evidence of payment of registration fees.

3. Capital subscription

A public company can raise funds from the public by issuing shares and debentures. For this, promoters have to take the following steps:

a. Obtain consent from SEBI.
b. File prospectus with a registrar of companies

c. Appointment of bankers, brokers, underwriters

d. Ensure that the minimum subscription is received

e. Application to a stock exchange for listing of companies securities

f. After making adjustment regarding application money received, issue allotment letters to successful applicant and file return of allotment with the registrar of companies.

4. Commencement of business

A public company raising funds from the public has to apply to the registrar of companies for the certificate of commencement of business along with the following documents.

1. A declaration about meeting minimum subscription requirement.

2. A declaration about details in respect of allotment to directors

3. A declaration about no money being payable to the applicant

4. A statutory declaration

A public company raising funds privately has to submit only documents 2 and 4 listed above.

The registrar, upon satisfaction, issues a certificate of commencement of business. It is also conclusive evidence that public company is legally entitled to do business.

Answer 32.
Life insurance

Life insurance may be defined as a contract in which the insurer, in consideration of a premium paid either in a lump sum or in periodical installments by the insured, undertakes to pay a certain sum of money either on the death of the insured or in the expiry a certain number of years.

Types of life insurance policies

1. Whole life policy

In this kind of policy, the insured has to pay premium throughout his lifetime and the assured sum become due for payment to the beneficiary only after the death of the insured.

2. Endowment life assurance policy

The insurance company undertakes to pay a specified sum when the insured attains a particular age or on his death whichever is earlier.

3. Joint life policy

This policy is taken up by two or more persons. The premium is paid jointly or by either of them in installments or lump sum.

4. Annuity policy

Under this policy, the assured sum is payable after the assured attains a certain age in monthly, quarterly, half yearly or annual installments.

5. Children’s endowment policy

This policy is taken by a person for is/her children to meet the expenses of their education or marriage.

Plus One Business Studies Previous Year Question Papers and Answers

Kerala Plus One Business Studies Previous Year Question Paper 2017

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.

Question 1.
Which one of the following is NOT related to the general objectives of the business?
a. Innovation
b. Physical and financial resources
c. Warehousing
d. Productivity

Question 2.
The business operations in a Joint Hindu Family business is controlled by ……………….
a. partners
b. karta
c. co – parceners
d. shareholders

Question 3.
The government decided to sell the shares in the telecom department to the private sector. This is an example of ………………
a. disinvestment.
b. memorandum of undertaking
d. rehabilitation
c. reconstruction

Question 4.
……………….. are licensed by the government to accept imported goods prior to payment of tax and customs duty.
a. Cooperative warehouse
b. Private warehouse
c. Bonded warehoused
d. Government warehouse

Question 5.
Transportation removes the hindrance of ……………….. in trading activities.
a. place
b. time
c. risk
d. finance

Question 6.
Mrs. Usha purchased a smartphone from LG company through the internet is a ……………….. activity.

a. B2B
b. B2G
c. B2C
d. C2C

Question 7.
One of the following is against business ethics. Find it.
a. Charging a fair price for the product
b. Giving wages to employees if by not considering their workload
c. Using correct measurement for products
d. Giving chances to hear the problems of employees

Question 8.
If a Public Limited Company is NOT preparing the Article of Association, it can adopt ………………….

a. Table A
b. Table B
c. Table C
d. Table D

Question 9.
………………….. document shows the relationship of the company with outsiders.
a. Articles of Association
b. Memorandum of Association
c. Prospectus
d. Certificate of Incorporation

Question 10.
………………. is the link between wholesaler and customer.
a. Manufacturer
b. Supplier
c. Retailer
d. None of these

Question 11.
A receipt issued by the commanding officer of a ship when the cargo is loaded on the ship is known as ………………
a. shipping receipt
b. mates receipt
c. cargo receipt
d. charter receipt

Question 12.
Manufacturing and selling goods beyond the boundaries of one’s own country are called ………………
a. national business
b. international business
c. domestic business
d. none of these

Question 13.
Identify the form of business organization related to the following statements.
a. An artificial person created by law.
b. Association of persons with the motive of the welfare of members.

Question 14.
Write a short note on partnership deed.

Question 15.
What do you mean by Export Promotion Zones (EPZ)?

Question 16.
Correct the table given below, if there is a mistake.

Question 17.
Explain how the business units make land pollution.

Question 18.
“People work for others and get remuneration”.
a. Identify the economic activity involved in the above statement.
b. Write any two features of that economic activity.

Question 19.
AM Associates in India and C-Link Associates in Japan, two computer assembling firms, joined together and formed AMC Associates to do the same business.
a. Name the mode of international business mentioned above.
b. State any two advantages of such business.

Question 20.
Explain the causes of business risks.

Question 21.
Give a brief note about the social responsibility of business.

Question 22.
Write any three limitations of mail-order business.

Question 23.
a ………………. are also known as rural industries or traditional industries.
b. Write any three features of these industries.

Question 24.
Explain any four characteristics of a Government company.

Question 25.
‘Match column A with column B.

Question 26.
Ram and Rahim decided to start a mobile shop at Aluva.
a. Which form of business organization is suitable to them?
b. Explain different types of such organization.

Question 27.
The two main documents required for the formation of a company are Memorandum’of Association and Articles of Association. What are the differences between them?

Question 28.
Explain the features of departmental stores.

Question 29.
This service helps to reduce the impact of loss likely to be caused by uncertain events in a busi¬ness.
a. Identify the name of the service.
b. Explain the principles related to such services.

OR

a. Explain the different types of banks.
b. Explain the functions of commercial banks.

Question 30.
Explain the factors affecting the choice of business finance.

OR

What is meant by public deposits? Explain its merits and limitations as a source of finance.

Answers

Answer 1.
c. Warehousing

Answer 2.
b. karta

Answer 3.
a. Disinvestment

Answer 4.
c. Bonded warehouse

Answer 5.
a. place

Answer 6.
c. B2C

Answer 7.
b. Giving wages to employees by not considering their workload

Answer 8.
a. Table A

Answer 9.
b. Memorandum of Association

Answer 10.
c. Retailer

Answer 11.
b. Mates Receipt

Answer 12.
b. International business

Answer 13.
a. Joint stock company b. cooperative society

Answer 14.
The written agreement which specifies the terms and conditions that governs the partnership is called a partnership deed.

Answer 15.
Industrial estate, which forms enclaves from domestic tariff areas. Provide an internationally com petite ve duty-free environment for export production at low cost

Answer 16.

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

Answer 18.
a. Employment
b.

• There must exist an employer-employee relationship.
• Employees get a salary or wages for their services
• Regularity in service

Answer 19.
a. Joint ventures
b. It helps to execute large projects requiring huge capital outlays and manpower. The foreign business firms benefit from local partners knowledge of the host countries.

Answer 20.
Causes of Business Risks

1. Natural Causes:
   it includes natural calamities like earthquake, flood, lightning, heavy rains, famine etc.
2. Human Causes:
   It includes dishonesty, earless lessor negligence of employees, stoppage of work due to power failure, riots, management inefficiency etc.
3. Economic Causes:
   It includes changes in demand, change in price, competition, technological changes etc.
4. Other causes:
   it includes political disturbances, fluctuation in exchange rates, the change in govt, policies etc.

Answer 21.
Social responsibility of business refers to its obligation to take those decisions and perform those actions which are desirable in terms of objectives and values of our society. Obligations to take those decisions and perform those actions which are desirable in terms of the objectives and values of the society. Respect the aspirations of the society and try best to contribute to the achievement of these aspirations. Voluntary action from the part of business units for the benefit of society. (Consider any meaningful explanation of the social responsibility of business)

Answer 22.

• Lack of personal contact
• High promotion cost.
• No after sale service
• No credit facility
• High dependence of postal service

Answer 23.
a. Cottage industries/village industries
b. Organized by individuals with Pvt resources, use family labor and locally available talent, small capital unit, equipment used is simple, produce simple products.

Answer 24.

• A government company can be established by fulfilling the requirements of the Indian companies act.
• It has a separate legal entity, apart from the government.
• It enjoys autonomy in decision making.
• These companies are able to control the market.

Answer 25.

Answer 26.
a. Partnership
b. Types of partnerships

I. Classification on the basis of duration

1. Partnership at will This type of partnership continue as long as the partners want a¬nd is terminated when any partners give notice of withdrawal from partnership to the firm
2. The particular partnership which is formed for the accomplishment of a particular project to be carried on over a specified period of time is called a particular partnership.

II. Classification on the basis of liability

1. General partnership In general partnership liability of partners is unlimited and joint Registrationoffirm is optional. Existe nee of a firm is affected by the death, insolvency or retirement of the partners.
2. Limited partnership In a limited partnership, the liability of at least one partner is unlimited whereas the rest may have limited liability. Registration of such a firm is compulsory. The existence of such a firm is not affected by the death, insolvency or retirement of the limited partners.

Answer 27.

Answer 28.
a. Provide all facilities such as restaurant, telephone booth etc
b. Located at a central place
c. started at large scale basis as the joint stock company
d. Combinesthefunctionsofretaining and warehousing
e. centralized purchasing and decentralized selling.

Answer 29.
a. Insurance
b. 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.

• The agreement put in writing and is known as a policy.
• The person whose risk is insured is called insured.
• The firm which insurances the risk of loss is called insurer.

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.

OR

a. Types of banks

1. Commercial banks
Commercial banks are institution dealing in money, ie, accepting deposits and grant loans and advances to their customers, two types of commercial banks

• Public sector banks Those banks which are owned and managed by the government.
• Private sector banks  Those banks which are owned and managed by the private parties.

2. Co-operative banks
Cooperative banks are governed by the provisions of State Cooperative Societies Act on the principles of self-help and mutual help, self-help, and mutual help.

3. Specialized bank
Specialized banks are foreign exchange banks, industrial banks, development banks, export-import banks catering to specific needs of these unique activities.

4. Central bank
The central bank of any country supervises, controls and regulates the activities of all the commercial banks of that country.

b. Functions of commercial banks

1. Acceptance of deposits
The commercial bank accepts depo¬sits from the people. The different types of deposits are a current account, savings account and fixed deposits.

2. Lending of funds
The second major activity of commercial banks is to provide loans and advances out of the money received through deposits. These advances can be made in the form of overdrafts, cash credits, discounting trade bill etc.

3. Cheque facilty
It is the very important service which is provided the customers by this one can any time collect theircheques and drawn on other banks. There are two type of cheques mainly

• bear er cheque and
• crossed cheque.

4. Remittance of funds
Another function of a commercial bank is providing the facility of fund transfer from one place to another, on account of the interconnectivity of branches.

5. Allied services
Besides these, a bank also provides allied services such as bill payments, locker facility, underwriting services, buying and selling of shares and debentures on instruction etc.

Answer 30.
Cost The cost of procurement of funds & cost of utilising the funds should be taken into account while deciding about the source of funds that will be used by an organization.

• Financial strength & stability of operation
  In the choice of source of funds, business should be in a sound financial position so as to able to repay the principal amount and interest on the borrowed amount. When the earing of the organisation are not stable, It can issue equality shares to collect the fund.
• Form of organization & legal status
  The form of business organisation and status influence the choice of a source for raising money.
• Purpose & time period
  Business should plan according to the time period for which the funds are required. A short-term need can be net through borrowing funds at low rate of interest through trade credit, commercial paper etc. For long-term finance sources such as issue of shares and de- bentares are more appropriate
• Risk
  Business should evaluate each of the source of finance in terms of the risk involved.
• Control
  Business firm should choose a source keeping in mind the extent to which they are willing to share their control over business
• Flexibility
  Another aspect affecting the choice of a source of finance is the flexibility ease of obtaining funds

OR

Public deposit, the deposit\data raised by the organisation directly from the public are known public deposits rates of interest offered on public deposits are usually higher than those allowed by a commercial bank.
Demerits

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

Plus One Business Studies Previous Year Question Papers and Answers

Kerala Plus One Business Studies Previous Year Question Paper 2018

General Instructions to candidates

• There is a ‘cool off time’ of 15 minutes in addition to the writing time.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
• Read the instructions carefully.
• Read the questions carefully before answering.
• 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 nonprogrammable calculators are not allowed in the Examination Hall.

Answer all questions from question numbers 1 to 9. Each carries one score.

Question 1.
The broad classification of business activities includes and.
a. Trade and Auxiliaries to trade
b. Industry and Commerce
c. Industry and Traded
d. Internal Trade and External Trade

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

Question 3.
VSAT (Very Small Aperture Terminal) is satellite-based…
a. rail transport service
b. communication service
c. banking service
d. air transport 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

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

Question 6.
Fill in the series as per hint given:
a. Equity Shares Owned Capital
b. Debentures?

Question 7.
Which among the following is against bush ness ethics?
a. Using fair weights and measures
b. Fair treatment to workers
c. Earning reasonable profits
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

Question 9.
Which cine 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 any five from question numbers 10 to 15. Each carries two scores.

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

Question 11.
Suggest any two payment mechanisms used in e-Business.

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

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

Question 14.
Differentiate the terms Licensing and Franchising in connection with the international business.

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

Answer any six from question numbers 16 to 22. Each carries three scores.

Question 16.
Write any three differences between profession and Employment.

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.

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

Question 19.
List out any three features of cottage industries.

Question 20.
A large retailing unit, selling a wide variety of consumer goods on low price and with a self-service concept. Identify it and mention any two advantages.

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 a foreign country to get the products produced.
b. A contractual arrangement to access the patent or technology of a firm for producing goods in the foreign country.
c. Establishing a firm jointly with a foreign partner.

Question 22.
Briefly explain the objectives of the International Monetary Fund.

Answer the following question which carries four scores.

Question 23.
Match the following,

Answer any two from question numbers 24 to 26. Each carries four scores.

Question 24.
A Business Organization joins hands with the other one for mutual benefits.
a. Name the type of a business referred here.
b. Describe any three benefits of it.

Question 25.
Distinguish between goods and services.

Question 26.
Mithra opines that e-Business and e-Commerce are the same. Do you agree with her? Justify your answer.

Answer any three from question numbers 27 to 30. Each carries five scores.

Question 27.
Explain briefly the multiple objectives of a business.

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

Question 29.
What is meant by Memorandum of Association? Explain any four clauses.

Question 30.
Describe the services rendered by wholesalers to the manufacturers.

Answer any two from question numbers 31 to 33. Each carries eight scores.

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.

Question 32.
Explain the major functions of Commercial Banks In India.
 

Question 33.
Explain the various external sources of finance available for Joint Stock Companies in our country.

Answers

Answer 1.
b. Industry and Commerce

Answer 2.
c. Membership by birth

Answer 3.
b. Communication service

Answer 4.
a.SIDBI

Answer 5.
a. Prospectus

Answer 6.
Creditorship capital

Answer 7.
d.Charging unfair price

Answer 8.
Market traders

Answer 9.
a or c

Answer 10.

• Supply of the right quantity of goods.
• Supply of the right quantity of goods
• Supply of goods at reasonable pa rice.
• Free from adulteration, poor quality, misleading advt etc.

Answer 11.
Payment mechanism

Payment can be done in any of the following methods:

a. Cash on Delivery (CoD)

Here the payment is made at the time of physical delivery of goods.

b. Cheque: Here cheque is received and upon realization, the delivery goods are. made

c. Net-banking transfer

Modern banking system provides the facility of electronic transfer of funds over the net to the customers.

d. Creditor Debit card

They are popularly known as plastic money. Credit cards are issued by the bank, that allows the holder to make purchase on credit. The amount due from the cardholder to the online seller is assumed by the card issuing bank, who transfers the amount which is involved in the transaction.

The debit card also facilitate the process of payment as one can make a purchase through it to the extent of the amount lying in the persons own savings account.

e. Digital cash

This is a type of electronic currency that exists only in cyberspace. It has physical features but has the capability of using it as real currency in an electronic format.

Answer 12.
Statutory corporations.
e. g., LIC, RBI, SBI etc.

Answer 13.
Retained earnings (plowing back of profit)

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.
  
• A greater degree of operational freedom and flexibility.
  
• It may lead to an increase in the market price of the equity shares of a company
  

Answer 14.
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.

Answer 15.
a. Retailers maintain regular availability of various products produced by different manufacturers.

b. Retailers provide new products information to customers by arranging an effective display of products and through personal selling.

Answer 16.

Answer 17.
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.

Answer 18.
Departmental undertaking

1. The funding of these enterprises come directly from the Government Treasury and are an annual appropriation from the budget of the Government. The revenue earned by these is also paid into the treasury.
2. They are subject to accounting and audit controls applicable to other Government activities.
3. The employees of the enterprise are Government servants and their recruitment and conditions of service are the same as that of other employees directly under the Government. They are headed by Indian Administrative Service (IAS) officers and civil servants who are transferable from one ministry to another.

Statutory corporation

1. Statutory corporations are set up under an Act of Parliament and are governed by the provisions of the Act. The Act defines the objects, powers, and privileges of a statutory corporation.
2. This type of organization is wholly owned by the state. The government has the! ultimate financial responsibility and has the power to appropriate its profits. At the same time, the state also has to bear the losses, if any.
3. A statutory corporation is a body

Answer 19.

• These are organized by individuals, with private resources
  
• Normally use family labor and locally available talent: the equipment used is simple
  
• Capital investment is small
  
• Produce simple products, normally in their own premises
  

Answer 20.
1. Supermarkets

it is a large scale retail organization deals in different kinds of consumer goods. A unique feature of the supermarket is the absence of salesmen to serve the consumer. It is also known as self-service stores.

Advantage

• They offer a wide variety of products at low cost under one roof.
  
• As they are located at a central location it results in a high turn over
  
• It provides wide selection facility
  
• No bad debts as goods are sold on a cash basis
  

Answer 21.
a. Contract manufacturing
b. Licencing
c. Joint Venture

Answer 22.
a. To promote international monetary cooperation.
b. To facilitate, expansion of balanced growth of international trade.
c. To promote exchange stability.

Answer 23.

Answer 24.
a. Joint ventures
b. It helps to execute large projects requiring huge capital outlays and manpower.
The foreign business firms benefit from local partners knowledge of the host countries.

Answer 25.

Answer 26.
I do not agree with her.
e-business may be defined as the conduct of industry, trade, and commerce using computer networks.

e-business is a broader term and e-commerce is a part of e-business, e-business includes all the electronically conducted business functions such as production, accounting, personnel etc.e-commerce is the buying and selling of goods and services over the internet.

Answer 27.
1. Market standing

It refers to the position of an enterprise in relation to its competitors.

2. Innovation

It is the introduction of new ideas or methods in the way something is done or made. It accelerates the growth of an enterprise.

3. Productivity
Productivity is ascertained by comparing the value of output with the value of the input. It is used as a measure of efficiency

4. Physical and financial resources:

The business must aim at maximum utilization of available physical and financial resources.

5. Earning profit
Earning maximum profit is the primary objective of every business. Profit is required for the survival and growth of a business.

6. Manager performance and development

Efficient managers are needed to conduct and coordinate business activities. Managers performance and development is also an important objective of business enterprises

7. Workers performance and attitude

Workers performance and attitude determine their contribution towards productivity and profitability of any enterprise. Every enterprise must aim at improving its workers performs nee.

8. Social responsibility

It refers to the obligation of a business firm to contribute resources to solving social problems and work in a socially desirable manner.

Answer 28.
a. Economic Responsibility

A business enterprise is basically an economic entity and therefore, its primary social responsibility economic produce goods and services that society wants and sell them at a profit.

b. Legal Responsibility

Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of the society wants and sell them at a profit,

c. Ethical Responsibility

This includes the behavior of the firm that is expected by society but not codified in law.

d. 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 29.
Memorandum of association is the charter or Magna Carta of the company. It is the fundamental document of the company. It defines the objects of the company and provides the framework beyond which the company cannot operate. Its purpose is to enable the shareholders, creditors, and others who deal with. the company to know the scope of the company’s operations. Contents of the memorandum clauses of a memorandum.

A Name clause

The name clause furnishes the name of the company. The name should not be identical with, or similar to, the name of an existing company. The name should not suggest any connection with or patronage of a national hero. The name must not directly or indirectly imply any participation of the central or state government. In case of a public company, the name should end with the word ‘limited’ and in case of a private company the name should end with the word ‘private limited’.

B. Registered office clause

This clause specifies the name of the state wherein which the registered of the company is proposed to be situated. Full address of the company must be filed with the registrar within 30days of incorporation of the company. It is also known as situation or domicile clause.

C. Object Clause

his is the most clause of the memorandum it defines a purpose for which the company is formed. A company is not legally/7 entitled to undertake an activity, which is yond the objects stated in this clause.

D. Liability clause

It states whether the liability of members is limited by shares or by guaranty.

E. Capital clause

This clause specifies the maximum capital which the company will be authorized sed to raise through the issue of shares,

F. Association Clause

This clause state that the subscriber express of their willingness and agreement to form a company.

Answer 30.
1. Services to manufacturers
a. Facilitate large-scale production

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

b. Bearing risk

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

c. Financial assistance

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

d. Expert advice

As wholesalers are in direct contact with retailers they provide useful information regarding customer taste and preference and market condition t 0 manufacturers.

e. Help in marketing function:
Functions of wholesalers relieve producers from many of the marketing activities and enable them to concentrate on the production activity.

f. Facilitate production continuity by purchasing the goods and when these are produced

g. Storage/warehousing of goods produced

2. Services to retailers:

a. Availability of goods:

The wholesalers make the products’ of 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

WhoJesalers provide credit facilities to retailers.

d. Specialized knowledge:

The wholesalers specialize in one line of products and know the pulse of the market. So they offer expert advice to retailers.

e. Risk sharing

Wholesalers sell goods to retailers in small quantities and thus retailers do not face the risk of storage, pilferage, obsolescence etc.

Answer 31.
PARTNERSHIP

A partnership is a 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.

MERITS

• There is ease information as well as the closure of a business.
  
• Balanced decision making in partnership decision is taken by all partners.
  
• More funds In a partnership the capital is contributed by a number of partners.
  
• Sharing of risk like profit sharing losses also shared by partners.
  
• Secrecy Since partnership firm is not legal not required to publish its accounts and submits its reports, it can maintain the confidentiality of information relating to its operation.
  

LIMITATION

• Unlimited liability
  
  The partners of a firm have unlimited liability the partners are jointly and individually liable for payment of debts.
• Limited resources
  
  As there is a restriction on a number of members, capital contributed by them also limited.
• Possibility of conflicts
  
  A difference in opinion on some issues may lead to disputes between partners
• Lack of continuity
  
  The retirement death insolvency or insanity of any partner can bring an end to the business.
  
• Lack of public confidence
  Partnership firm is legally not required to publish its accounts and submits its reports, it results in a lack of public confidence in partnership.
  

Answer 32.
Functions of commercial banks

1. Acceptance of deposits

The commercial bank accepts deposits from the people. The different types of deposits area current account, savings account and fixed deposits.

2. Lending pf funds

ruemo Second major activity of commercial banks is to provide loans and advances out of the money received through deposits. These advances can be made in the form of overdrafts, cash credits, discounting trade bill etc.

3. Cheque facility

It is the very important service which is provided the customers by this one can any time collect theircheques and drawn on other banks. There are two type of cheques mainly a. bearer cheque and b. crossed cheque

4. Remittance of funds

Another function of commercial bankis pro-viding the facility of fund transfer from one place to another, on account of the interconnectivity of branches.

5. Allied services

Besides these, a bank also provides allied services such as bill payments, locker facility, underwriting services, buying and selling of shares and debentures on instruction etc.

Answer 33.
1. Retained earnings (ploughing back of profit)

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.

2. Trade credit

Trade credit is the credit extended by one trader to another for the purchase of goods and services. It is a short term source of finance.

3. Factoring

It is the method of converting book debts into cash. It is the practice of raising funds by selling firms accounts receivables to another agency called factor. Factor charges fees for the services rendered.

4. Lease financing

A lease is a contractual agreement whe-reby the owner of the asset (lessor grants the right to use the asset to a third party (lessee), in other words, it is ‘ rending of an asset for some specified period. The lessee has to pay a specified amount called lease rent to the lesser for the use of the asset,

5. Public deposit

The deposit data raised by the organization directly from the public are known public deposit rates of interest offered on public deposits are usually higher than those allowed by a commercial bank.

6. Commercial paper

It fs an unsecured promissory note issued by a firm to raise funds for a short period, ! varying from 90 days to 364 days rate of interest on a loan is fixed.

7. Issue of shares

The capital of a company is divided in to small units called shares. The capital obtained by issue of shares is known as share capital. The one who hold shares is called shareholder.

A. Equity shares
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.

B. Preference shares

Capital raised by the issue of preferenceshares is called preference share capital. 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.

8. Debentures

Debenture is an instrument issued by com’ pany raising long term debt capital, under its seal to acknowledge its debt. Debenture holders are creditors of the company . It bears a fixed rate of interest.

9. Commercial Banks

Commercial banks provide loans and advances in the form of cash credit , over a draft, term loan, discounting of bill and letter of credit etc.

10. Financial Institutions

These are the institutions established by state and central government with the core objective of financing projects to bring rapid industrialization on a long term basis. It is also known as lending institution or development bank.

11. International financing

A. Commercial banks

Commercial banks all over the world extend foreign currency loans for business purposes.

B. International agencies and development banks

A number of international agencies and development banks are provide long and medium-term loans and grants to promote the development of economically backward areas in the world.

C. International capital markets

1. Global Depository Receipts (GDR’s)

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

2. American Depository Receipts (ADR’s)

The depository receipts issued by a company in the USA are known as ADRs. It can be issued only to American citizens and can be listed and traded on a stock exchange in the USA.

3. Foreign currency convertible bonds (FCCB’s)

They are equity linked debt securities that are to be converted into equity or depository receipts after a specified period. The FCCB’s are issued in a foreign currency and carry a fixed interest rate. These are listed and traded in the foreign stock exchange and similar to the convertible debenture issued in India.

Plus One Business Studies Previous Year Question Papers and Answers

Kerala Plus One Accountancy Model Question Paper 4

Time Allowed: 2 hours
Cool off time: 15 Minutes
Maximum Marks: 60

Answer all questions from question numbers 1 to 9. Each carry one score.

Question 1.
When the drawee of the bill of exchange makes the payment before the maturity date of the bill is called
a. dishonour of the bill
b. discounting of bill
c. retiring of bill
d. renewal of bill

Question 2.
Fill in the blank with suitable data type on the basis of the hint given:
a. Name: Text
b. Birthdate:

Question 3.
Classify the following input devices and out­put devices

a. Optical pen
b. VDU (visual Display unit)
c. Printer
d. Smart card reader

Question 4.
Which one of the following principles of ac­counting helps to equate the assets of a firm with its liabilities?

a. Full disclosure principle
b. Duality principle
c. Matching principle
d. Cost principle

Question 5.
Tally is a……………..
a. Utility software
b. Application software
c. Operating system
d. Connecting software

Question 6.
When the debit of income and expenditure is more than its credit, it leaves a ………….

a. profit
b. surplus
c. deficit
d. loss

Question 7.
A bank reconciliation statement is prepared with the balance of……….

a. Passbook
b. Cashbook
c. Both pass book and cash book
d. None of these

Question 8.
The single entry system is also known as

a. Imprest system
b. Merchantite system
c. Incomplete system
d. Cash system

Question 9.
Which of the following is INCORRECT?
a. Assets = Liabilities + Capital
b. Liabilities=Assets – Capital
c. Capital = Assets – Liabilities
d. Liabilities = Assets + capital

Answer any five from question numbers 10 to 15. Each carries two scores.

Question 10.
Journal and ledger are two important books maintained in accounting.
a. State any two differences between these books.
b. Purchase office furniture for Rs. 500 by cheque. The account to be debited is

Question 11.
Mention two capabilities of a computer over human beings.

Question 12.
From the following information, ascertain the amount of debtors to be posted in the asset side of the Balance sheet.

Adjustments:
a. Provide 5% for further bad debts.
b. Create a provision for doubtful debts@ 10% on debtors.
c. Provision for discount on debtors is
to be created @ 10%.

Question 13.
In how many ways are assets classified? Mention these ways.

Question 14.
From the following transactions, identify the type of error.
a. Wages paid for making additions to machinery Rs 100 was debited to wages A/c.
b. Sales account was given an excess credit by Rs 1600 and at the same time, rent account was totaled shortly by Rs 1600.
c. A credit purchase of Rs 10000 from Manju Agencies was not recorded at all.
d. A credit sale of Rs 5000 was entered in the sales book as Rs 50000.

Question 15.
Rajanesh is a manager with great expertise in management and leading his firm very well. But his expertise does not find a place in the accounting records of the firm.
a. Is it genuine according to the rules of accounting?
b. State your answer with the reason.

Answer any three from question numbers 16 to 19 Each carries three scores.

Question 16.
Bank reconciliation statement is prepared to reconcile the cash book and pass book bal­ances on a certain date.
a. This statement is prepared by…
b. Write any one cause for the difference in pass book and cash book
c. Cash book of Tinu shows a bank bal­ances of Rs. 15,000. On comparing the cash book the following discrep­ancies were found.

1. Cheque issued to Deepa but not presented for payments of Rs. 1,000
2. Bank interest credited by the bank Rs.400
3. Divya, a customer directly deposi­ted Rs.4000 to firm’s bank account
4. Bank Charges Rs.100 not entered in the cash book.
   Prepare a bank reconciliation statement.

Question 17.
Ascertain the profit from the following:
Capital on 1^st January 2014   र 16000
Capital as on 31^st December 2014  र 17900
Drawings made during the year  र 4800
Capital introduced on 1st July 2014 र 2000

Question 18.
Rectify the following transactions of Baby stores during the year 2012-13.

1. Salary paid Rs 900 was recorded as Rs 90 only.
2. Furniture purchased on credit for Rs 20000 was recorded through cash book by mistake.
3. Wages worth Rs 40000 paid for con­struction of a car porch were debited to Wages A/c
4. Purchase book was cast short by Rs 900.

Question 19.
A firm decided to make provision for doubtful debts @ 10% on debtors for the year 2012-13. Name the relevant accounting principle applied here and explain.

Answer any two from question numbers 20 to 22. Each carries four scores.

Question 20.
Star Ltd. purchased machinery for Rs 290000 and spent Rs 10000 on its installation on 1^st April 2008. After using it for 3 years, it was sold for Rs 2,00,000 on March 31^st, 2011. Depreciation is to be provided at 10% on the fixed installment method.
a. Pass journal entry for recording the purchase of machinery.
b. Find the amount of profit/loss on sale of machinery assuming that the acco­unting year closes on 31^st March every year.

Question 21.
Krishna intends to create a table in Ms- Access. Suggest suitable data types for the following fields.

Question 22.
From the following particulars, prepare the bank reconciliation statement of Asha & Co. as on
31-03-2012.
a. Credit balance as per pass book is  Rs. 10,000
b. Bank collected a cheque of Rs. 500 on behalf of Asha & Co. but wrongly credited it to Asha’s account.
c. Bank recorded a cash book deposi­ted of Rs. 1589 &Rs. 1598.
d. Withdrawal column of the passbook under cost by Rs. 100
e. The credit balance of Rs. 1500 as on the passbook was recorded in the debit balance.
f. The payment of a cheque of Rs. 350 was recorded twice in the passbook.
g. The passbook showed a credit bala­nce for a cheque of Rs.1000 deposi­ted by Asha & Co.

Answer question numbers 23 and 24. Each car­ries five scores.

Question 23.
“Writing equation forms the basis of the accounting process”. Prove that the accounting equation is satisfied in all of the following transactions.
a. Suresh commenced business with cash RS 40000
b. Purchased goods on credit Rs 6500
c. Paid rent Rs 500
d. Sold goods costing Rs 6500 on credit for Rs 8000

Question 24.
Prepare a double column cash book from the following transactions for the month of January 2018.

Question 25.
Kiran a sole trader does not keep full records of books of accounts. However, the following information is available. You are required to calculate credit sales and credit purchases by preparing Total Debtors Account and Total Creditors Account. Also, show the Bills receivables A/c and Bills payable A/c.

Question 26.
Mr. Thomas keeps his books under the single entry system. On 1 st April 2013, his records indicated the following assets and liabilities,


During the year, he introduced Rs 15000 as further capital and withdrew Rs 400 every month. Calculate the profit or loss made by him during the year by using the statement of affairs method.

Question 27.
Mr. John, who does not follow the double-entry system gives you the following details for the period ended 31/12/2012.


loss account and the Balance Sheet as on 31/12/2012.

Answer

Answer 1.
c. retiring of bill

Answer 2.
Date / Time / Text

Answer 3.
Input devices – (a) & (d)
Output devices – (b) & (c)

Answer 4.
Duality principle

Answer 5.
Application software

Answer 6.
profit

Answer 7.
Both pass book and cash book

Answer 8.
Incomplete system

Answer 9.
Liabilities=Assets + capital

Answer 10.
(a)

b. Furniture A\C.

Answer 11.
1. Speed: A computer is able to process data at.a very high speed than that of a human being
2. Accuracy: It refers to the degree of exactness with which comp­utation are made and operations are performed.

Answer 12.

Answer 13.

Answer 14.
(a) Error of principle
(b) Error of compensating
(c) Error of omission
(d) Errors of commission
(e) Errors of omission

Answer 15.
(a) Yes.
(b) According to this concept, transactio­ns involving money or money’s worth will be recorded in the books of acco­unts. The transactions or events which cannot be expressed in monetary terms.

Answer 16.
(a) Customer/ Businessman/Account holder etc
(b) Cheque issued by the bank but not yet presented for payment.
(c) Bank Reconciliation Statement

Answer 17.

Answer 18.

Answer 19.
Principle of conservatism
According to this principle, all possible losses are to be provided for but incomes can be recognised only when there is a certainty.

Answer 20.
a. Machinery A/c Dr 300000
Cash/ Bank 300000
b. Ascertainment of Profit or Loss on Sale of Machinery

Answer 21.
a. No/Text
b. Text
c. Text
d. Text
e. No
f. Date/Time

Answer 22.

Answer 23.

Answer 24.

Answer 25.

Answer 26.

Answer 27.

Plus One Accountancy Previous Year Question Papers and Answers