BUSINESS STUDIES MASTER

BUSINESS STUDIES (CODE 054)

CLASS XI – SA 1 (HALF-YEARLY EXAMINATION) - SET 1

Time Allowed: 3 Hours Maximum Marks: 80

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General Instructions:

1. This question paper contains 34 questions.
2. Marks are indicated at the right side of each question.
3. Answers should be brief and to the point.
4. Answers to the questions carrying 3 marks may be from 50 to 75 words.
5. Answers to the questions carrying 4 marks may be about 150 words.
6. Answers to the questions carrying 6 marks may be about 200 words.
7. Attempt all parts of a question together.

SECTION A

Q1. Rajat buys a mobile phone for ₹15,000 and sells it to his friend for ₹18,000. He does not do this regularly. Will this transaction be classified as a business?
(a) Yes, because profit is earned.
(b) No, because it lacks regularity of dealings.
(c) Yes, because goods are exchanged.
(d) No, because no capital was invested.

(1)

Q2. Which of the following cannot be classified as an objective of business?
(a) Investment    (b) Productivity    (c) Innovation    (d) Profit earning

(1)

Q3. Provision of residential accommodation to the members at reasonable rates is the objective of:
(a) Producer’s cooperative    (b) Consumer’s cooperative
(c) Housing cooperative    (d) Credit cooperative

(1)

Q4. The maximum number of partners allowed in a banking business as per the Companies Act is:
(a) 10    (b) 20    (c) 50    (d) 100

(1)

Q5. [Image Based Question] Observe the image of a local artisan molding clay pots by hand in his village courtyard to sell in the local weekly market. Which type of industry is depicted here?
(a) Secondary Industry    (b) Extractive Industry
(c) Cottage Industry    (d) Tertiary Industry

(1)

Q6. Aakash and Vikas formed a partnership. Aakash contributed capital but does not take part in the day-to-day management of the business. His liability is unlimited. Aakash is a:
(a) Active partner    (b) Sleeping partner    (c) Secret partner    (d) Nominal partner

(1)

Q7. The structure in which there is separation of ownership and management is called:
(a) Sole proprietorship    (b) Partnership    (c) Company    (d) All business organisations

(1)

Q8. 'Hindalco' processes bauxite to extract aluminum. Which type of manufacturing industry is this?
(a) Analytical industry    (b) Synthetical industry
(c) Processing industry    (d) Assembling industry

(1)

Q9. The enterprise which is wholly owned and controlled by the Government and whose financing comes directly from the government treasury is known as:
(a) Statutory Corporation    (b) Government Company
(c) Departmental Undertaking    (d) Public Private Partnership

(1)

Q10. Assertion (A): Statutory Corporations are autonomous organizations and are free from day-to-day political interference.
Reason (R): They are established by a Special Act of Parliament which defines their powers and functions.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.

(1)

Q11. Which of the following is not a feature of a Government Company?
(a) It is created by the Indian Companies Act.
(b) It can file a suit in a court of law.
(c) Its employees are civil servants.
(d) The government holds at least 51% of paid-up capital.

(1)

Q12. DTH services are provided by:
(a) Transport companies    (b) Cellular companies
(c) Postal department    (d) None of the above

(1)

Q13. Which principle of insurance states that the insured must have a financial interest in the subject matter of insurance?
(a) Principle of Indemnity    (b) Principle of Insurable Interest
(c) Principle of Subrogation    (d) Principle of Contribution

(1)

Q14. The fee charged by the insurance company to take over the risk of the insured is called:
(a) Claim    (b) Premium    (c) Policy    (d) Indemnity

(1)

Q15. Assertion (A): The principle of indemnity does not apply to life insurance.
Reason (R): Human life cannot be valued in terms of money, and life insurance is a contract of guarantee, not just compensation for loss.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.

(1)

Q16. B2C commerce stands for:
(a) Business to Commerce    (b) Business to Customers
(c) Business to Citizens    (d) Both to Commerce

(1)

Q17. Which of the following is not an application of e-business?
(a) Online bidding    (b) Online procurement
(c) Online trading    (d) Contract R&D

(1)

Q18. Providing fair wages and safe working conditions is the social responsibility of business towards:
(a) Consumers    (b) Government    (c) Employees    (d) Shareholders

(1)

Q19. Which of the following alone can ensure effective ethics programme in a business enterprise?
(a) Publication of a code    (b) Involvement of employees
(c) Establishment of compliance mechanisms    (d) Top management commitment

(1)

Q20. An enterprise must respect the laws of the country and pay taxes regularly. This falls under:
(a) Economic responsibility    (b) Legal responsibility
(c) Ethical responsibility    (d) Discretionary responsibility

(1)

SECTION B

Q21. Rohan, a fresh business graduate, noticed that office workers in his city struggle to find healthy, home-cooked meals during lunch hours. He started a tiffin service, employing local women to cook and delivering the food to various offices. He operates this service daily and has started earning a steady surplus. Identify and explain any two characteristics of business activities highlighted in Rohan's venture.

(3)

Q22. Define a 'Partnership Deed'. List any four vital contents that are generally included in a partnership deed to avoid future disputes among partners.

(3)

Q23. EcoMart Ltd. is an online platform that connects local organic farmers directly with urban consumers. Customers place orders via their mobile app, and the company handles the logistics to deliver fresh produce within 24 hours. The farmers receive payments directly into their bank accounts. Identify and explain the specific scope/component of e-business discussed in the above case.

(3)

OR

TechSolutions is a modern IT firm where employees are encouraged to work from home. They use secure virtual private networks to access company servers, conduct daily meetings via video conferencing, and collaborate on documents in real-time. The management believes this has significantly reduced their operational costs. Identify and state the specific component of e-business highlighted here.

Q24. "Business is an economic activity, yet it cannot ignore its social responsibilities." In the light of this statement, explain any three arguments in favor of social responsibility.

(3)

SECTION C

Q25. Ramesh wants to start a large-scale textile manufacturing unit. He requires huge capital investment and wants his personal assets to remain safe in case the business incurs heavy losses. Furthermore, he wants the business to continue its operations uninterrupted, regardless of the death or insolvency of any member. Based on his requirements, which form of business organization should Ramesh choose? Explain any three merits of this form of organization.

(4)

Q26. Cooperative societies are formed to protect the interests of their members. In this context, explain the following features of a cooperative society:
(a) Voluntary membership
(b) Service motive

(4)

Q27. 'Swad' is a famous sweet shop in Kolkata owned solely by Mr. Das. He manages all operations, bears all risks, and enjoys all the profits. However, lately, due to a massive expansion of his business, he is finding it difficult to manage everything alone and his capital is falling short. He also fears that if he falls ill, the shop will have to remain closed. Identify the form of business organization Mr. Das is running. Also, explain three limitations of this form of business organization that Mr. Das is currently experiencing.

(4)

Q28. Global Dynamics Inc. is a massive enterprise incorporated in the USA but operates in over 40 countries, including India, Japan, and Germany. They have huge financial resources, advanced technology, and centralized control from their headquarters. Recently, they entered the Indian market by forming a partnership with a local tech firm to leverage the domestic market knowledge. This strategy has helped them capture a significant market share within a year. Based on the given information, identify the type of enterprise Global Dynamics Inc. is. State any three features of this type of enterprise that are evident or generally applicable.

(4)

OR

The Government of India decided to set up a new enterprise to manage the nation's railway network. This enterprise is directly under the control of the Ministry of Railways, and its finances are allocated from the central government's annual budget. The employees working here are considered government servants, and the enterprise enjoys high public accountability. Despite its large scale, it sometimes suffers from red-tapism and delayed decision-making due to strict adherence to rules. Identify the type of public sector enterprise discussed above. Explain any three of its merits based on your understanding.

Q29. Warehousing plays a vital role in overcoming the hindrance of time. Explain any four major functions of warehousing that help businesses operate smoothly.

(4)

Q30. "Ethics is a matter of principled behavior." Explain the concept of Business Ethics and state any three elements required to implement business ethics effectively in an organization.

(4)

SECTION D

Q31. Three friends, Amit, Bhuvan, and Chirag, decided to form a partnership business to manufacture solar panels. Amit contributed ₹50 Lakhs, Bhuvan contributed ₹30 Lakhs, and Chirag, being an expert engineer, contributed no capital but agreed to manage the technical operations. They did not sign any written agreement. After two years, the business made a handsome profit of ₹30 Lakhs. Amit demanded that profits should be shared in the ratio of their capital contribution. Bhuvan argued that Chirag should not get any profit as he didn't contribute capital, and Chirag demanded a regular salary of ₹50,000 per month for his technical expertise, in addition to an equal share of profits.
(a) In the absence of a written agreement, how will the profit of ₹30 Lakhs be divided among the three partners?
(b) Is Chirag entitled to the salary he is demanding? Give a reason.
(c) What is the legal consequence of not having a written partnership agreement? Explain any two benefits they missed by not registering their firm.

(6)

Q32. Discuss the major differences between a Departmental Undertaking and a Government Company on the basis of: (i) Formation, (ii) Legal Status, (iii) Finance, (iv) Management, (v) Staffing, and (vi) Autonomy.

(6)

Q33. Prakhar runs a successful garment manufacturing business in Surat. To protect his factory against potential financial losses, he took a fire insurance policy from SecureLife Insurance Co. for ₹50,00,000. During the policy period, a massive short circuit caused a fire in the warehouse, resulting in a loss of goods worth ₹20,00,000. Prakhar immediately informed the insurance company. The insurance surveyor assessed the damage and the company paid the claim of ₹20,00,000. A few weeks later, Prakhar managed to sell some of the half-burnt, damaged goods as scrap for ₹2,00,000. When the insurance company came to know about this, they demanded the ₹2,00,000 from Prakhar, stating that they have the right to the scrap after fully settling the claim. Prakhar refused to pay, arguing that the goods originally belonged to him and the scrap value is his profit. Additionally, Prakhar had another policy from SafeGuard Insurance for the same factory for ₹30,00,000, but he only claimed from SecureLife.
(a) Identify and explain the principle of insurance under which SecureLife Insurance Co. is demanding the scrap value. Is Prakhar justified in refusing?
(b) Name and explain the principle of insurance that would apply if SecureLife asked SafeGuard Insurance to share the loss.

(6)

OR

Meera recently started an export business dealing in traditional Indian handicrafts. She received a large order from a buyer in the UK. However, she is unfamiliar with international banking and faces several challenges. Firstly, she needs funds to manufacture the goods before shipping them, as she doesn't have enough working capital. Secondly, the UK buyer wants to pay her only after the goods arrive, but Meera wants a guarantee of payment before she ships the valuable items. Thirdly, she wants to offer her regular domestic clients an easy way to buy online from her website directly from their bank accounts without using cash. She approaches her bank manager for advice. The bank manager suggests various modern banking services to solve her problems. He explains how she can get a short-term loan specifically for her manufacturing needs, how the bank can provide a document that guarantees payment from the foreign buyer's bank, and which digital payment method is best for her website. In the context of the above case:
(a) Identify and explain the specific bank facility Meera can use for her working capital needs.
(b) What document should the bank manager suggest to guarantee payment from the UK buyer? Explain.
(c) Which digital payment method is suitable for her website?

Q34. E-business is rapidly replacing traditional business models globally. Despite its numerous benefits, there are certain areas where traditional business still holds an advantage. Compare E-business and Traditional Business on the following six bases: (i) Ease of formation, (ii) Physical presence, (iii) Cost of setting up, (iv) Opportunity for interpersonal touch, (v) Nature of human capital required, and (vi) Global reach.

(6)

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