Plus One Business Studies Previous Year Question Paper 2018

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