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.
- NABARD
- 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.
| a. Business | Profit |
| c. Employment | Salary/wage |
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.
- They are financed from the government Treasury.
- They are subject to accounting and audit controls applicable other government activities.
- 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
- Kandla Export Processing Zone
(KEPZ), Kanld a Gujarat. - Santa Cruz Electronic Export Processing Zone
Bombay. - 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
- 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.
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
- Name Of firm
- Nature of business and location of a business.
- Duration of business
- Investment made by The investmenter
- Distribution of profits and losses
- Duties and obligation of the partners
- 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
- Promotion
- Incorporation
- Subscription of capital
- 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.
