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Objective Type Question
Q. 1. (A) Choose the correct option :
Business is : (a) Art
(b) Science
(c) Both (a) and (b)
(d) None of the above.
The maximum no. of members in private company is : (a) 5
(b) 10
(c) 20
(d) 50. (Note: As per latest Companies Act, this is usually 200, but according to your options/textbook, (d) is marked as the answer).
Which work is the primary work of bank ? (a) Issue letter of credit
(b) Keep Valuables Safely
(c) To accept deposit
(d) To give loan to education.
Business ethic is important for : (a) General personal category
(b) Middle level management
(c) High level management
(d) All of the above.
Memorandum of Association is prepared : (a) Operators of company
(b) By company secretary
(c) By company auditors
(d) By Promoters.
Ans. 1. (c), 2. (d), 3. (c), 4. (d), 5. (d).
(B) Give answer in one word or sentence:
Why is Eco Mark used? Ans. For control pollution.
The main document prepared in Partnership firm is. Ans. Partnership deed.
Write the full name of SEBI. Ans. Securities and Exchange Board of India.
Write the full form of NABARD. Ans. National Bank for Agriculture and Rural development.
What type of market is called of Lac bangles? Ans. Local Market.
Q.2. What do you mean by Government Companies?
Ans:
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A Government Company is a company—
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in which the government holds more than 50% shares.
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It is controlled and managed by the government.
Q.3. What do you mean by E-communication / E-promotion?
Ans:
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E-communication means sending messages through the internet.
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E-promotion means promoting products online.
Q.4. Why is Finance needed in business?
Ans:
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Finance is needed to start a business.
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It is used to buy goods, pay salaries, and run daily expenses.
Q.5. Give the definition of Cottage Industry.
Ans:
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Cottage Industry is a small-scale industry—
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which is run at home or small place.
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Family members work together in it.
Q.6. What is International Trade?
Ans:
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International Trade means—
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buying and selling of goods between two or more countries.
Q.7. “Business is an Economic Activity”. Explain.
Ans:
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Business is an economic activity—
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because its main aim is to earn profit.
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It involves exchange of goods and services.
Q.8. Write the Utility of Smart Card.
Ans:
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A Smart Card is used—
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for making payments.
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as an identity card.
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to store information safely.
Q.9. What is a Prospectus?
Ans:
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A Prospectus is a document—
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that gives information about a company.
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It is issued to invite people to buy shares.
Q.10. What do you mean by Chain Shops?
Ans:
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Chain Shops are shops—
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owned by the same person or company.
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They are opened at different places with the same name.
Q.11. Distinguish between Economic and Non-Economic Activities
| Basis | Economic Activities | Non-Economic Activities |
|---|---|---|
| Meaning | Activities done to earn money | Activities done for love, care or satisfaction |
| Purpose | Main aim is profit earning | Main aim is personal satisfaction |
| Example | Business, job, profession | Helping poor, charity, household work |
| Money | Money is earned | No money is earned |
OR
Distinguish between Profession and Employment
| Basis | Profession | Employment |
|---|---|---|
| Meaning | Work based on special knowledge and training | Work done for salary under an employer |
| Qualification | Requires professional qualification | Qualification may or may not be high |
| Income | Earns fees | Earns salary |
| Example | Doctor, Lawyer | Teacher, Clerk |
Q.12. Elements of New Industrial Policy 1991
1. Liberalization
Liberalization means reducing unnecessary restrictions and rules on industries. Before 1991, businesses needed many licenses to start or expand. After liberalization, these controls were removed, making it easier for companies to grow, take decisions freely, and increase production without much government interference.
2. Privatization
Privatization means increasing the role of private sector companies and reducing government ownership. Many public sector units were sold or opened for private participation. This helped in improving efficiency, better management, and faster decision-making because private companies focus more on performance and profit.
3. Globalization
Globalization allows foreign companies to enter the Indian market and do business. It encourages international trade and investment. Indian companies also get opportunities to expand globally. This increases competition, improves quality of products, and provides more choices to customers at better prices.
4. Reduction of Government Control
This means minimizing government interference in business activities. The licensing system was reduced, and industries were given more freedom. Businesses could take independent decisions related to production, pricing, and expansion. This helped in faster growth and development of industries.
OR
Characteristics of Private Sector
1. Owned and Controlled by Private Individuals
Private sector businesses are owned and managed by individuals or groups of people. The government does not control them directly. Owners take all decisions regarding the business and are responsible for profits and losses.
2. Profit Earning Motive
The main objective of private sector companies is to earn maximum profit. All business activities are planned in such a way that they generate more income and reduce costs, helping the company to grow and expand in the market.
3. Quick Decision Making
Private sector companies can take decisions quickly because there is less bureaucracy. Owners or managers do not need to follow long procedures, which helps in responding fast to market changes and customer needs.
4. Less Government Control
Private businesses operate with fewer government restrictions compared to public sector companies. This gives them more flexibility to innovate, expand, and manage their operations efficiently.
Q.13. Arguments for Social Responsibility
1. Use of Society’s Resources
Businesses use resources like land, labor, and capital from society. Therefore, they have a responsibility to give something back. By helping society, businesses maintain a balance and contribute to overall development.
2. Builds Good Reputation
When a company works for social welfare, it gains respect and goodwill. A good reputation attracts more customers and investors, which helps the business grow in the long run.
3. Increases Customer Trust
Customers prefer companies that care about society. Socially responsible actions increase trust and loyalty among customers, leading to better sales and long-term relationships.
4. Leads to Long-term Profit
Though social responsibility may increase short-term costs, it helps in earning long-term profits. A trusted and respected business attracts more customers and opportunities.
5. Helps in Solving Social Problems
Businesses can help in solving issues like pollution, poverty, and unemployment. Their contribution improves society and creates a better environment for everyone.
OR
Arguments against Social Responsibility
1. Profit is the Main Objective
The main aim of business is to earn profit. Spending time and money on social activities may divert attention from core business operations and reduce profitability.
2. Increases Cost of Business
Social responsibility activities require extra expenses. This increases the overall cost of business, which may lead to higher prices for customers.
3. Lack of Expertise
Businesses are not experts in social work. They may not be able to handle social issues effectively, which can reduce the impact of such activities.
4. Reduces Efficiency
Focusing on social responsibilities may reduce business efficiency. Time and resources spent on social work could be used for improving productivity and performance.
Q.14. Characteristics of a Company
1. Separate Legal Identity
A company is treated as a separate legal person from its owners. It can own property, enter into contracts, and sue or be sued in its own name.
2. Perpetual Succession
A company continues to exist even if its members change or die. Its life is not affected by the life of its shareholders, ensuring stability and continuity.
3. Limited Liability
The liability of shareholders is limited to the amount they have invested. They are not personally responsible for the company’s debts beyond their share capital.
4. Transferability of Shares
Shares of a company can be easily transferred from one person to another. This provides liquidity and makes it easier for investors to buy or sell shares.
5. Created by Law
A company is formed under the Companies Act. It comes into existence only after legal registration and must follow all legal rules and regulations.
OR
Characteristics of Articles of Association
1. Contains Rules and Regulations
Articles of Association include all the rules that govern the internal working of a company. It explains how the company will operate on a daily basis.
2. Governs Internal Management
It deals with internal matters like meetings, voting, appointment of directors, and management procedures. It ensures smooth functioning of the company.
3. Subordinate to Memorandum of Association
Articles of Association must follow the Memorandum of Association. If there is any conflict, the Memorandum will have more importance.
4. Defines Rights and Duties of Members
It clearly explains the rights, duties, and responsibilities of members and directors. This helps in avoiding conflicts and ensures proper management.
Q.15. Difference between Equity Share and Preference Share
| Basis | Equity Share | Preference Share |
|---|---|---|
| Dividend | Dividend is not fixed | Dividend is fixed |
| Priority | Paid after preference shareholders | Paid before equity shareholders |
| Voting Rights | Have voting rights | Generally no voting rights |
| Risk | High risk | Low risk |
OR
Difference between Shareholder and Debenture Holder
| Basis | Shareholder | Debenture Holder |
|---|---|---|
| Status | Owner of company | Creditor of company |
| Income | Gets dividend | Gets fixed interest |
| Risk | High risk | Low risk |
| Voting Rights | Has voting rights | No voting rights |
Q.16. What is Wholesale Trade?
Meaning of Wholesale Trade
Wholesale trade refers to the buying of goods in large quantities from manufacturers and selling them in smaller quantities to retailers. Wholesalers act as a link between producers and retailers. They do not sell goods directly to final consumers.
Characteristics of Wholesale Trade
1. Large Quantity Transactions
Wholesalers deal in bulk quantities of goods. They purchase products in large amounts from manufacturers and supply them in smaller quantities to retailers. This helps in smooth distribution of goods in the market.
2. Link between Producer and Retailer
Wholesalers act as intermediaries between producers and retailers. They ensure that goods reach different markets and retailers easily without direct contact between producers and final sellers.
3. Limited Customer Base
Wholesalers sell goods only to retailers or other businesses, not to final consumers. Their customer base is limited but involves large volume transactions.
4. Less Attention to Display
Wholesalers do not focus much on shop decoration or display because they deal in bulk selling rather than attracting individual customers.
Functions of Wholesale Trade
1. Buying and Selling
Wholesalers purchase goods from manufacturers and sell them to retailers. They ensure continuous supply of goods in the market.
2. Storage
They store goods in warehouses until they are required by retailers. This helps in maintaining steady supply throughout the year.
3. Transportation
Wholesalers arrange transportation of goods from manufacturers to markets, reducing the burden on producers and retailers.
4. Financing
They provide credit facilities to retailers, helping them to buy goods even if they do not have immediate cash.
OR
What is a Retailer?
Meaning of Retailer
A retailer is a person or business that sells goods directly to final consumers in small quantities. Retailers are the last link in the distribution chain and deal directly with customers.
Characteristics of Retailer
1. Small Quantity Sales
Retailers sell goods in small quantities according to the needs of customers. They do not deal in bulk like wholesalers.
2. Direct Contact with Customers
Retailers have direct interaction with final consumers. They understand customer needs and preferences better.
3. Wide Variety of Goods
Retail shops usually keep different types of products to satisfy various customer demands at one place.
4. Focus on Display and Service
Retailers pay attention to shop display, cleanliness, and customer service to attract more buyers.
Functions of Retailer
1. Selling Goods to Consumers
Retailers provide goods directly to final consumers in convenient quantities and locations.
2. Providing Information
They guide customers about product features, uses, and prices, helping them make better choices.
3. Storage of Goods
Retailers keep stock of goods so that customers can buy them anytime as per their needs.
4. Providing Credit Facility
Some retailers provide goods on credit to regular customers, which increases customer satisfaction.
Q.17. Difference between Dissolution of Partnership and Dissolution of Firm
| Basis | Dissolution of Partnership | Dissolution of Firm |
|---|---|---|
| Meaning | Change in relationship among partners | Complete ending of business |
| Business | Business continues | Business stops completely |
| Partners | Some partners may leave or join | All partners leave |
| Agreement | New agreement is made | No agreement remains |
| Closure | Firm is not closed | Firm is closed permanently |
| Effect | Only partnership ends | Entire firm ends |
OR
Difference between Private Company and Public Company
| Basis | Private Company | Public Company |
|---|---|---|
| Members | Minimum 2, Maximum 200 | Minimum 7, no maximum limit |
| Share Transfer | Restricted | Freely transferable |
| Public Issue | Cannot invite public | Can invite public |
| Name | Ends with Pvt. Ltd. | Ends with Ltd. |
| Control | Controlled by few persons | Controlled by many shareholders |
| Disclosure | Less disclosure required | More disclosure required |
Q.18. Difference between Money Order and Postal Order
| Basis | Money Order | Postal Order |
|---|---|---|
| Meaning | Used to send money | Used to make payments |
| Purpose | Personal money transfer | Payment of fees or bills |
| Payment | Paid to receiver directly | Can be encashed |
| Amount | Can send larger amount | Used for small amounts |
| Use | Common in rural areas | Used in official work |
| Speed | Takes more time | Faster than money order |
OR
Difference between Current Account and Saving Account
| Basis | Current Account | Saving Account |
|---|---|---|
| Users | Businessmen | General people |
| Transactions | Unlimited transactions | Limited transactions |
| Interest | No interest | Interest is given |
| Purpose | Business use | Saving money |
| Minimum Balance | Higher balance required | Lower balance required |
| Overdraft | Facility available | Generally not available |
Q.19. Small Industries Development Bank of India (SIDBI)
Introduction of SIDBI
Small Industries Development Bank of India (SIDBI) is a financial institution established to promote and develop small-scale industries in India. It provides financial help, guidance, and support to small businesses so that they can grow and contribute to the country’s economic development.
Functions of SIDBI
1. Financial Assistance
SIDBI provides loans and financial support to small industries. It helps new entrepreneurs to start their businesses and existing units to expand. This financial help improves production and increases employment opportunities.
2. Promotion of Small Industries
SIDBI encourages the growth of small-scale industries by providing schemes, subsidies, and support programs. It helps in developing rural and small industries, which play an important role in balanced economic development.
3. Development of Infrastructure
SIDBI supports the development of infrastructure for small industries such as industrial areas, training centers, and technology support. This improves efficiency and productivity of small businesses.
4. Providing Training and Guidance
SIDBI offers training programs, consultancy services, and guidance to entrepreneurs. It helps them improve their management skills, production techniques, and business planning.
OR
Features of Cottage Industries
1. Small Scale Production
Cottage industries operate on a small scale. Production is limited and mainly done to meet local demand. These industries do not require heavy investment and are easy to start.
2. Family-based Work
These industries are usually run by family members at home. All members contribute to production, making it a source of income for the entire family.
3. Use of Traditional Methods
Cottage industries use traditional tools and techniques instead of modern machines. This keeps the cost low but production is slower compared to large industries.
4. Low Capital Requirement
These industries require very little capital to start. People can easily begin such businesses without taking large loans, which reduces financial risk.
5. Rural Employment
Cottage industries provide employment opportunities in rural areas. They help reduce unemployment and prevent migration of people to cities.
Q.20. Procedure of Export Trade
1. Receiving Enquiry
Exporter receives enquiry from foreign buyer asking about price, quality, quantity, delivery time, and other important details of goods.
2. Sending Quotation
Exporter sends quotation with price, terms, conditions, delivery schedule, and payment method to the foreign buyer for consideration.
3. Receiving Order
Exporter receives confirmed order from importer mentioning quantity, price, quality, packing, shipment, and payment terms clearly.
4. Acknowledgement of Order
Exporter confirms acceptance of order and sends acknowledgement to importer, ensuring both parties agree on all terms and conditions.
5. Obtaining Export License
Exporter obtains necessary license and registration from government authorities to legally export goods to other countries without any problem.
6. Arranging Finance
Exporter arranges funds from banks or financial institutions to manage production, packing, transportation, and other export-related expenses properly.
7. Production or Procurement of Goods
Exporter manufactures goods or purchases them from suppliers as per order specifications like quality, quantity, and design required.
8. Packing and Labeling
Goods are packed carefully using suitable materials and labeled properly to ensure safety during transport and easy identification at destination.
9. Obtaining Inspection Certificate
Goods are inspected by authorized agencies to check quality standards. Inspection certificate ensures that goods meet required export quality norms.
10. Arranging Insurance
Exporter takes insurance policy to protect goods from loss or damage during transit, reducing risk involved in international transportation.
11. Booking Shipping Space
Exporter books space in ship or aircraft for sending goods. Shipping company provides schedule and confirms availability for transport.
12. Customs Clearance
Exporter completes customs formalities by submitting required documents and paying duties, allowing goods to be legally exported from the country.
13. Loading of Goods
Goods are loaded into ship or aircraft under supervision, ensuring proper handling and safety during the loading process.
14. Obtaining Bill of Lading
Shipping company issues bill of lading as proof of shipment. It acts as receipt and title of goods during transportation.
15. Preparation of Documents
Exporter prepares documents like invoice, packing list, certificate of origin, insurance policy, and shipping documents for export process.
16. Payment Collection
Exporter sends documents to bank and receives payment from importer through agreed method like letter of credit or bank transfer.
17. Delivery of Goods
Importer receives goods at destination port, completes formalities, and takes delivery of goods as per agreement between both parties.
OR
Advantages of Foreign (International) Trade in India
1. Availability of Goods
International trade helps in importing goods that are not available in India. It provides a wide variety of products to consumers at better quality and prices.
2. Earning Foreign Exchange
Exports help India earn foreign currency, which is useful for development and importing essential goods. It strengthens the country’s economy.
3. Growth of Industries
Foreign trade encourages industries to improve quality and increase production. It helps businesses expand in international markets.
4. Better Utilization of Resources
Countries specialize in producing goods in which they are efficient. This leads to better use of resources and reduces wastage.
5. Employment Opportunities
International trade increases production, which creates more jobs. It helps in reducing unemployment and improving living standards.
❓ Frequently Asked Questions (FAQs)
Q1. Is this sample paper useful for CG Board exams?
Yes, this sample paper is based on the latest CG Board syllabus and helps in better exam preparation and revision.
Q2. Are the answers written in easy language?
Yes, all answers are written in simple and easy English so that students can understand and remember quickly.
Q3. Does this post cover important exam questions?
Yes, it includes very important questions that are frequently asked in exams.
Q4. Is this helpful for last-minute revision?
Yes, the short and clear answers make it perfect for quick revision before exams.
Q5. Are differences given in table format?
Yes, all differences are explained in 3-column table format for better understanding.
Q6. Does it include long answer questions also?
Yes, it includes both short and long answer type questions with proper explanations.
Q7. Can I use this for scoring good marks?
Yes, if you study these answers properly, it will help you score better in exams.