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:
| A | B |
| a. Payment at the time of delivery | 1. Non-core activities |
| b. Plastic money | 2. Cash on delivery |
| c. Exists in the cyber space | 3. Credit/Debit card |
| d. Outsourcing | 4. Digital Cash |
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:
- Equity shares & Preference shares
- 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
- e-banking provides 24 hours, 365 days a year services to the customers of the bank
- It lowers the transaction cost.
- Customers can make the transactions from the office., home or while traveling.
- Greater customer satisfaction.
- 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.
