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Objective Type Question
Q. 1. (A) Choose the correct option :
Objective of Business is ..................... : (a) To earn profit (b) Provide Services (c) To earn profit and provide service (d) None of these.
The structure in which ownership and management are different : (a) Sole Proprietorship (b) Partnership (c) Company (d) All business organisation.
The biggest bank in India is : (a) SBI (b) HDFC (c) ICICI (d) Axis.
Out of these which business is not social responsibility towards business : (a) Good quality of product to avail at proper price (b) To express reality in advertisement. (c) To provide share in profit (d) Not to make adulteration in goods.
After getting the legal existence the company gets its symbol is : (a) Sovereignty (b) Directors (c) Name of the company (d) Secretary of the company.
Ans. 1. (a), 2. (c), 3. (a), 4. (c), 5. (a).
(B) Give answer in one word or sentence :
By using pesticides and chemicals on land what type of pollution take place ?Ans. Soil pollution.
Which trade can be started without registration ?Ans. Sole Proprietorship.
What is given by equity shares on invested capital as a reward ?Ans. Dividend.
Which industry can run both in cities and villages ?Ans. Cottage industry.
Those who go door to door and sell products is named by which name ?Ans. Hawkers.
Q.2. What do you mean by Departmental Undertaking?
Ans:
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Departmental undertaking is a form of public enterprise—
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which is owned, managed, and controlled by the government department.
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It is financed by the government and works under direct government control.
Q.3. Write two advantages of E-commerce
Ans:
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Wide market reach – Business can reach customers all over the world.
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Convenience – Customers can buy products anytime from home.
Q.4. How many types of Share Capital are there?
Ans:
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There are two main types of share capital:
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Equity Share Capital
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Preference Share Capital
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Q.5. Write three examples of Small Scale Industries
Ans:
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Handloom industry
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Pottery industry
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Carpentry industry
Q.6. What is the meaning of Foreign Trade?
Ans:
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Foreign trade means—
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buying and selling of goods and services between different countries.
Q.7. Characteristics of Economic Activities
1. Profit Motive
Economic activities are done to earn money. The main aim is to make profit and improve living standards.
2. Involves Money
These activities involve earning or spending money. Without money, an activity is not considered economic.
3. Regular Nature
Economic activities are done regularly. One-time activity is not considered economic.
4. Production or Exchange
These activities involve production or exchange of goods and services to satisfy human wants.
Q.8. Advantages of E-Business (Any Three)
1. Cost Reduction
E-business reduces operational costs like rent, electricity, and staff. Online business needs less investment compared to physical stores, which increases profit.
2. Global Reach
E-business allows companies to sell products worldwide. It removes geographical barriers and helps businesses expand their market easily.
3. 24×7 Availability
E-business works all the time. Customers can buy products anytime, which increases sales and customer satisfaction.
Q.9. Consequences of Mistakes, Falsehood or Fraud in Prospectus
1. Civil Liability
If the prospectus contains wrong or false information, the company and its directors are liable to compensate investors for their losses.
2. Criminal Liability
If fraud or intentional false statements are made, the persons responsible can be punished with fine or imprisonment.
3. Right to Cancel Contract
Investors have the right to cancel the contract and return shares if they were misled by false information.
4. Loss of Reputation
Such mistakes or fraud damage the reputation of the company, reducing trust among investors and public.
Q.10. Limitations of Retailers (Any Three)
1. Limited Capital
Retailers usually have small capital, so they cannot buy goods in bulk or expand their business easily.
2. Limited Scope of Business
They operate in a small area and serve limited customers, which restricts their growth and profits.
3. High Competition
Retailers face tough competition from other retailers and big shopping stores, which reduces their sales.
Q.11. Importance of Industries
1. Economic Development
Industries help in the economic growth of a country. They increase production, create income, and improve the overall standard of living of people.
2. Employment Generation
Industries provide jobs to a large number of people. This reduces unemployment and improves the financial condition of families.
3. Use of Natural Resources
Industries use available natural resources efficiently and convert them into useful goods for human use.
4. Development of Infrastructure
Industries promote development of roads, transport, electricity, and communication facilities, which support overall development.
OR
Causes of Business Risk
1. Natural Causes
Natural disasters like floods, earthquakes, and fires can cause heavy loss to business and create risk.
2. Human Causes
Carelessness, dishonesty, or mistakes by employees and management can lead to losses.
3. Economic Causes
Changes in market demand, prices, or economic conditions affect business and create uncertainty.
4. Other Causes
Government policies, competition, and technological changes also create business risks.
Q.12. Characteristics of Public Sector
1. Government Ownership
Public sector enterprises are owned and controlled by the government. The government invests capital and takes major decisions.
2. Social Welfare Objective
The main aim is public welfare, not profit. They work to serve society and provide essential services.
3. Large Capital Requirement
These enterprises require huge investment, which is provided by the government.
4. Public Accountability
They are accountable to the public and must work according to government rules and policies.
OR
Demerits of Public Undertakings
1. Lack of Efficiency
Due to government control and bureaucracy, decision-making is slow, which reduces efficiency.
2. Political Interference
Political influence affects decisions, which may not always be beneficial for the business.
3. Low Profit Motive
Since focus is on public welfare, profit is not given much importance.
4. Misuse of Resources
Sometimes resources are not used properly, leading to wastage and losses.
Q.13. Who is a Promoter? Functions of Promoter
Meaning of Promoter
A promoter is a person who takes the initiative to start a company and completes all formalities for its formation.
Functions of Promoter
1. Idea Generation
Promoter identifies a business opportunity and plans to start a company based on that idea.
2. Feasibility Study
He studies whether the business idea is practical and profitable before starting the company.
3. Arranging Capital
Promoter arranges funds from investors and financial institutions to start the company.
4. Legal Formalities
He completes legal procedures like registration and documentation for company formation.
OR
Methods of Remuneration of Promoters
1. Commission
Promoters may receive commission based on profits or capital raised for forming the company.
2. Shares
They are often given shares of the company, making them part owners.
3. Lump Sum Payment
Sometimes promoters get a fixed amount for their services in forming the company.
Q.14. Importance of Business Ethics
1. Builds Trust
Ethical practices help in building trust among customers, employees, and investors, which is important for long-term success.
2. Improves Reputation
A business with good ethics gains a positive image in society, attracting more customers and investors.
3. Ensures Smooth Functioning
Ethics reduce conflicts and misunderstandings, leading to smooth business operations.
4. Long-term Success
Ethical businesses survive longer and achieve sustainable growth.
OR
Responsibility of Business towards Employees
1. Fair Wages
Business should pay fair and reasonable wages to employees for their work.
2. Good Working Conditions
It should provide safe and healthy working environment.
3. Job Security
Employees should feel secure about their job and future.
4. Training and Development
Business should provide training to improve skills and efficiency of employees.
Q.15. Importance of Business Finance
1. Starting Business
Finance is needed to start a business by purchasing land, machinery, and other resources.
2. Smooth Operation
It helps in running daily business activities like paying salaries and buying raw materials.
3. Expansion of Business
Finance is required to expand business and increase production.
4. Handling Emergencies
It helps in managing unexpected situations and losses.
OR
Factors Affecting Fixed Capital Requirement
1. Nature of Business
Manufacturing businesses need more fixed capital compared to trading businesses.
2. Size of Business
Larger businesses require more fixed capital for buildings, machinery, and equipment.
3. Technology Used
Advanced technology requires more investment, increasing fixed capital needs.
4. Growth Plans
Businesses planning expansion need more fixed capital in the beginning.
Q.16. Services provided by Wholesalers to Retailers
1. Regular Supply of Goods
Wholesalers provide a continuous supply of goods to retailers. This helps retailers maintain stock and meet customer demand without interruption.
2. Credit Facility
Wholesalers give goods on credit to retailers. This helps retailers to run business even if they do not have enough cash.
3. Bulk Breaking
They buy goods in large quantities and sell in smaller quantities to retailers, making it convenient for them.
4. Storage Facility
Wholesalers store goods in warehouses and supply them when needed, reducing burden on retailers.
OR
Services provided by Retailers to Wholesalers and Customers
To Wholesalers
1. Bulk Purchase
Retailers purchase goods regularly from wholesalers, helping them sell their stock quickly.
2. Market Information
Retailers provide information about customer preferences and demand trends to wholesalers.
To Customers
3. Small Quantity Sales
Retailers sell goods in small quantities according to customer needs.
4. Variety of Goods
They provide different types of goods at one place for customer convenience.
Q.17. Importance of Partnership
1. More Capital
Partnership allows pooling of funds from partners, increasing capital availability.
2. Division of Work
Work is divided among partners based on skills, improving efficiency.
3. Better Decisions
Partners discuss and take better decisions with combined knowledge.
4. Risk Sharing
Business risk is shared among partners, reducing burden on individuals.
OR
Demerits of Partnership
1. Unlimited Liability
Partners are personally liable for business debts, increasing risk.
2. Conflict Among Partners
Differences in opinions may create conflicts and affect business.
3. Limited Capital
Capital is limited compared to companies.
4. Lack of Continuity
Business may dissolve due to death or withdrawal of a partner.
Q.18. Types of Life Insurance
1. Whole Life Policy
This policy covers the insured person for entire life. Amount is paid after death to nominee.
2. Endowment Policy
Amount is paid after a fixed period or on death, whichever is earlier.
3. Money Back Policy
Policyholder receives money in installments during the policy period.
4. Term Insurance
Provides coverage for a specific period. Payment is made only if death occurs during the term.
OR
Difference between Goods and Services
| Basis | Goods | Services |
|---|---|---|
| Nature | Tangible (can be touched) | Intangible (cannot be touched) |
| Ownership | Ownership can be transferred | No ownership transfer |
| Storage | Can be stored | Cannot be stored |
| Production | Produced first, then consumed | Produced and consumed together |
| Example | Books, clothes | Teaching, banking |
| Quality | Can be measured easily | Difficult to measure |
Q.19. Importance of Small Business
1. Employment Generation
Small businesses create job opportunities, especially in rural areas.
2. Use of Local Resources
They use local materials and skills effectively.
3. Balanced Development
They help in development of rural and backward areas.
4. Low Investment
They require less capital, so easy to start.
OR
Incentives for Industries in Backward and Hilly Areas
1. Tax Benefits
Government provides tax exemptions to industries in such areas.
2. Subsidies
Financial support is given to reduce cost of production.
3. Cheap Land and Power
Land and electricity are provided at lower rates.
4. Transport Facilities
Better transport facilities are developed to support industries.
Q.20. International Trade and its Difference from Internal Trade
Meaning of International Trade
International trade means buying and selling goods and services between different countries.
Difference between International Trade and Internal Trade
| Basis | International Trade | Internal Trade |
|---|---|---|
| Area | Between countries | Within a country |
| Currency | Different currencies used | Same currency used |
| Rules | Strict rules and regulations | Fewer restrictions |
| Transport | Long distance | Short distance |
| Risk | High risk | Low risk |
| Example | Import-export | Wholesale-retail |
OR
Difference between Inland Trade and Foreign Trade
| Basis | Inland Trade | Foreign Trade |
|---|---|---|
| Meaning | Trade within country | Trade between countries |
| Currency | Same currency | Different currencies |
| Risk | Less risk | More risk |
| Rules | Simple rules | Complex rules |
| Transport | Easy transport | Difficult transport |
| Example | Local trade | Import-export |