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TN State Board 11th Commerce Model Question Paper 1 English Medium
- The question paper comprises of four parts.
- You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
- All questions of Part I, II, III and IV are to be attempted separately.
- Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each.
These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
- Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
- Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
- Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in detail Draw diagrams wherever necessary.
Time: 2:30 Hours
Maximum Marks: 90
PART – I
Choose the correct answer. Answer all the questions. [20 × 1 = 20]
………………….. is considered as an artificial person.
(a) Sole trader
(b) Joint Hindu family business
(c) Joint Stock company
(d) Co – operative societies
(c) Joint Stock company
A contract with or by a minor is a ……………………
(a) Valid contract
(b) Void contract
(c) Voidable contract
(d) Voidable at the option of either party
(b) Void contract
The largest commercial bank of India is ……………………….
Which one of the following is correctly matched?
(a) Overdraft – More than one person
(b) RBI – Lender of last resort
(c) Partnership – Motor transport
(d) Life Insurance – Current Account
(b) RBI – Lender of last resort
Hindrance of risk is removed by ……………………..
(d) None of these
A mador disadvantage of a sole proprietorship is ……………………..
(a) Limited liability
(b) Unlimited liability
(c) Easy formation
(d) Quick decision
(b) Unlimited liability
Match the List – I with List – II and select the correct answer using the codes given below:
List – I
List – II
|(i) PWD||1. Public corporation|
|(ii) ONGC||2. Joint enterprise|
|(iii) Ramesh Brothers||3. Departmental undertaking|
|(iv) Maruthi Suzuki||4. Partnership firm|
Trade and Commerce was common to ……………………. dynasty.
The external source of funds are ……………………
(I) Shares and debentures
(II) Retained earnings
(III) Collection from receivables
(IV) Borrowings from banks
(a) (I) and (II)
(b) (II) and (III)
(c) (I) and (IV)
(d) (I) and (III)
(c) (I) and (IV)
What kind of tax is the GST?
(a) Direct tax
(b) Indirect tax
(c) On the type of goods and services
(d) None of these
(b) Indirect tax
In 1969, there were …………………….. private banks which were nationalised.
Wholesalers deal in quantity of goods.
The persons who enter into partnership are collectively called as …………………..
Producers co – operatives are established and operated by …………………….
ONGC is a public enterprise. Identify the form of organisation.
(a) Public corporations
(b) Departmental undertaking
(c) Multinational corporations
(d) Government company
(a) Public corporations
…………………….. is a document acknowledging the receipt of goods by a carrier.
(b) Consignment note
(c) Charter party
(d) Bill of lading
Which company has minimum paid up capital of Rs 5,00,000?
(a) Government company
(b) Public company
(c) Private company
(d) Foreign company
(c) Private company
From the following which is not a direct tax?
(a) Income tax
(b) Wealth tax
(d) Capital gains tax
Business units can reduce expenditure by outsourcing front office work like ………………………
(b) File work
(b) File work
The year in which income earned is known as …………………………
(a) Assessment year
(b) Previous year
(c) Light year
(d) Calendar year
(b) Previous year
PART – II
Answer any seven questions in which question No. 30 is compulsory: [7 × 2 = 14]
According to Evelyn Thomas, “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products”.
What is unlimited liability?
Unlimited liability is a feature of sole trading business. When the sole trader’s business assets are not sufficient to pay off the business debts, he has to pay from his personal property.
Franchising is the practice of the right to use a firm’s business model and brand for a prescribed period of time. Who are the parties involved in franchising?
There are two parties to a franchising agreement. They are:
- Franchisor – The owner of a business who provides the franchise.
- Franchisee – The individual who gets the right to operate the business or use the trademark.
Give any three functions of warehouses?
- Price stabilization
- Equalization of demand and supply
A company is a large scale organization. Compared to sole trader and partnership organization, more profit can be received from the company. Mention any two advantages of a company?
1. Large Capital:
A company can secure large capital compared to a sole trader or partnership. Large amount of capital is necessary for conducting business on a large scale.
2. Limited Liability:
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held. In the case of a company limited by shares, the liability of a shareholder is restricted to the unpaid amount on the shares held by him.
Give any two advantages of MNC?
1. Low Cost Labour:
MNC set up their facilities in low cost countries and produce goods/services at lower cost.
2. Quality Products:
The resource, experience and expertise of MNCs in the sphere of research and development enables the host country to establish its research and development . system which helps it in producing quality goods and services at least possible cost.
List out any four types of indirect taxes levied in India?
It was launched by the RBI in 2013. The transactions are settled on real time basis. What does it mean? Write a short note about this?
Real Time Gross Settlement Systems (RTGS) was launched by the RBI in 2013. The transactions are settled on real time basis. Gross settlement means the transaction is settled between one bank and another bank without adding any other transactions.
State the different types of Public Sector Enterprises?
- Coal India Ltd
- Gas Authority of India Ltd
- Tamil Nadu State Transport Corporation
- Steel Authority of India Ltd
Who is a sleeping partner?
A sleeping partner is the one who contributes capital and shares in the profits or losses of the firm but does not take part in the management of the business.
PART – III
Answer any seven questions in which question No. 40 is compulsory: [7 × 3 = 21]
Explain the features of general stores?
General Stores sell a wide variety of products under one roof, most commonly found in a local market and residential areas to satisfy the day – to – day needs of the customers residing in nearby localities.
They remain open for long hours at convenient timings and often provide credit facilities to their regular customers.
Explain the characteristics of business?
The essential characteristics of business are as follows:
- Production or Procurement of Goods: Goods must be produced or procured in order to satisfy human wants.
- Sale, Transfer or Exchange: There must be sale or exchange of goods or services.
- Profit Motive: An important feature of business is profit motive. Business is an economic activity by which human beings make their living.
- Dealing in Goods and Services: Goods produced or procured may be consumer goods like cloth, pen, brush, bag, etc., or producer-goods like plant and machinery.
All the affairs of a Joint Hindu Family are controlled by the manager. The other members are co-parceners. What is the other name of the manager in Joint Hindu Family? How does he control the business?
The other name of the manager in the Joint Hindu family is ‘Karta’. The Karta is the senior most male member of the family. He controls and manages the business of the Joint Hindu family.
Income tax provides the method to compare the total income of an assessee. It is divided into five heads. What are the five heads of incomp under total income?
The five heads of income are:
- Income from ‘Salaries’ [Sections 15 – 17];
- Income from ‘House Property’ [Sections 22 – 27];
- Income from ‘Profits and Gains of Business or Profession’ [Sections 28 – 44];
- Income from ‘Capital Gains’ [Sections 45 – 55]; and
- Income from ‘Other Sources’ [Sections 56 – 59]
Generally, the liability of the partners in a firm is unlimited. But in service sector, the liability is limited. What is the name of the partnership? Write a short note about this?
The name of the partnership is Limited Liability Partnership. It is popular in service sector and in the small scale enterprises. Limited liability partnership means for paying the debts of the firm, only the assets of the business will be utilised. Example – cost accountants firm, lawyers, engineers, etc.
Mention any three features of government company?
Features of government company: .
- Registrations under the companies Act: A government company is formed under the Companies Act 1956.
- Own staff: A government company has its own staff except government officials who are sent to it on deputation.
- Majority of the capital provided by the government: The whole or majority (at least 51%) of the capital of a government company is provided by the government.
What is bill of lading?
Bill of Lading is a document containing the terms and conditions of the contract of carriage. It is issued by the shipping company and signed by the captain of the ship.
It acknowledges the receipt of the goods described in it on board the ship. It also serves as an official receipt of goods. It is a document of title of goods.
What do you mean by the concept of business ethics?
Business exists to supply goods and services to the people from social point of view but from individual point of view, the primary objective of any business unit is to make profit.
The individual objective should not be in conflict with societal objective. These two objectives normally contradict each other, as one business enterprise may be good in individual objective and bad at social objective and vice versa.
According to S. Evelyn Thomas “the retailer is the last of the many links in the economic chain whereby the consumer’s wants are satisfied smoothly and efficiently by retailers”.
Write any three differences between Direct taxes and Indirect taxes?
PART – IV
Answer all the questions: [7 × 5 = 35]
Question 41 (a).
What are the features of public corporation? Explain any five?
1. Special Statute:
A public corporation is created by a special Act of the Parliament or the State Legislature. The Act defines its powers, objectives, functions and relations with the ministry and the Parliament (or State Legislature).
2. Separate Legal Entity:
A public corporation is a separate legal entity with perpetual succession and common seal. It has an existence, independent of the Government. It can own property; can make contracts and file suits, in its own name.
3. Capital Provided by the Government:
The capital of a public corporation is provided by – the Government or by agencies controlled by the government. However, many public corporations have also begun to raise money from the capital market.
4. Financial Autonomy:
A public corporation enjoys financial autonomy. It prepares its own budget; and has authority to retain and utilize its earnings for its business.
5. Management by Board of Directors:
Its management is vested in a Board of Directors, appointed or nominated by the Government. But there is no Governmental interference in the day – to – day working of the corporation.
(b) Explain the organizational structure of RBI?
The head office of the RBI is situated in Mumbai. This central office has 33 departments in 2017. It has four zonal offices in Mumbai, Delhi, Calcutta and Chennai functioning under local boards with deputy governors as their heads. It also has 19 regional offices and 11 sub – offices (2017).
The RBI is governed by a central board of directors. The 21 member board is appointed by the Qovemment of India. It consists of:
- One Governor and four deputy governors appointed for a period of four years.
- Ten Directors from various fields.
- Two Government officials.
- Four Directors – one each from local boards.
Question 42 (a).
Sole proprietorship is a form of business organization in which an individual introduces his own capital, uses his own skill and intelligence in the management of the business. Explain the characteristics of a sole trader?
Business owned and controlled by a single person is known as sole trading business.
The following are the characteristics of a sole trader:
- Ownership by one man: This is owned by single person. The sole trader contributes the required capital.
- Freedom of work and Quick decisions: The sole trader is the owner, so he need not consult with others. Hence he can take quick decision.
- Unlimited liability: When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.
- Enjoying Entire Profit: All the benefits earned by the sole trader is enjoyed by him alone.
- Absence of Government Regulation: A sole trading concern is free from Government regulations. No legal formalities are to be observed in its formation and management,
- Maintenance of Secrecy: Since the trader manages all the affairs of the business, the secrecy can be maintained easily.
(b) Partnership is the relation between persons who have agreed to share the profits of a business carried on by all. It is the result of an agreement. Closing of business is also by an agreement. It is called Dissolution of Partnership. Explain the dissolution of partnership firm without the order of the court?
Dissolution of a partnership firm takes place in two ways:
- Without the order of the court and
- By the order of the court A.
Without the order of the court:
1. By agreement or mutual consent:
A firm may be dissolved when all the partners agree to close the affairs of the firm.
2. By insolvency of all the partners but one:
If any one of the partners is adjudged as insolvent, it is necessary to dissolve the firm.
3. When the objective becomes illegal:
When the business carried on by the partnership becomes illegal, the partnership firm is automatically dissolved.
4. By notice of dissolution:
In the case of partnership at will, if any partner gives in writing to close the firm, the firm will be dissolved.
5. On certain contingencies:
- On the expiry of the period of the firm.
- On the completion of a business.
- On the death of a partner.
- On the retirement of a partner.
- On the insolvency of a partner.
Question 43 (a).
Explain the various types of warehouses?
1. Private Warehouses:
Private warehouses are built and owned by private business enterprises in order to store the products produced by them.
2. Government Warehouses:
They are created and operated by the Government to implement the programmes of the Government.
3. Public Warehouse:
It is open for public at large. Most of the business organisations, especially small and medium scale units cannot afford to have their own warehouses.
4. Co – operative Warehouses:
There are warehouses owned and managed by the marketing co – operative societies or agricultural co-operative societies. They are setup to provide warehousing facilities to their members.
5. Bonded Warehouses:
Bonded warehouses are those warehouses, which are licensed by the government to accept storage of imported goods which are not cleared due to non¬payment of customs duty by the importer.
(b) Insurance is a contract between the insurer and the insured under which the insurer undertakes to compensate-the insured for the loss arising from the risk insured. Explain the principles of insurance?
1. Utmost Good Faith:
According to this principle, both insurer and insured should enter into contract in good faith. Insured should provide all the information that impacts the subject matter. Insurer should provide all the details regarding insurance contract.
2. Insurable Interest:
The insured must have an insurable interest in the subject matter of insurance. Insurable interest means some pecuniary interest in the subject matter of the insurance contract.
Indemnity means security or compensation against loss or damages. In insurance, the insured would be compensated with the amount equivalent to the actual loss and not the amount exceeding the loss. This principle ensures that the insured does not make any profit out of the insurance. This principle of indemnity is applicable to property insurance alone.
4. Causa Proxima:
The word ‘Causa proxima’ means ‘nearest cause’. According to this principle, when the loss is the result of two or more cause, the proximate cause, i.e. the direct. The direct, the most dominant and most effective cause of loss should be taken into consideration. The insurance company is not liable for the remote cause.
The same subject matter may be insured with more than one insurer then it is known as ‘Double Insurance’. In such a case, the insurance claim to be paid to the insured must be shared on contributed by all insurers in proportion to the sum assured by each one of them.
Subrogation means ‘stepping the shoes on others’. According to this principle, once the claim of the insured has been settled, the ownership right of the subject matter of insurance passes on to the insurer.
In case of a mishap, the insured must take off all possible steps to reduce or mitigate the loss or damage to the subject matter of insurance.
Question 44 (a).
Write short notes on:
- Owner’s funds
- Borrowed funds
1. Owner’s Funds:
Owner’s funds mean funds which are provided by the owner of the enteiprises who may be an individual, or partners or shareholders of a company.
The profits reinvested in the business (ploughing back of profit or retained earnings) come under owner’s funds. These funds are not required to be refunded during the life time of business enterprise. It provides the owner the right to control the management of the enterprise.
2. Borrowed Funds:
The term ‘borrowed funds’ denotes the funds raised through loans or borrowings. For example, debentures, loans from banks and financial institutions, public deposits, trade credit, lease financing, commercial papers, factoring, etc., represent borrowed funds.
- These borrowed sources of funds provide specific period before which the fund is to be returned.
- Borrower is under legal obligation to pay interest at given rate at regular intervals to the lender.
- Generally borrowed funds are obtained on the security of certain assets like bonds, land, building, stock, vehicles, machinery, documents of title to the goods, and the like.
(b) What is meant by consumers co-operative store? Explain its merits in brief?
A consumers co-operative store is a retail organisation owned, managed and controlled by the
consumers themselves to obtain products of daily use at reasonable low prices. Its objective is to eliminate profits to middlemen by establishing a direct contact with the manufacturers.
People belonging to middle and low income groups, at least 25 persons have to come together to form a voluntary association and get it registered under the Cooperative Societies Act.
The capital of a co-operative store is raised by issuing shares to members. The management of the store is democratic and entrusted to an elected managing committee, where “one man one vote” is the rule.
The co – operative stores are very famous in Tamil Nadu. For example, Kamadhenu and Chinthamani co-operative supermarkets in Chennai, Karpagam in Vellore, etc. .
Question 45 (a).
Describe the agency functions of commercial banks?
Banks act as agents of customers and provide certain services:
1. Transfer of Funds:
Banks issue demand drafts, bankers’ cheques, travelers’ cheques, etc. and help in transfer of funds from one place to another.
2. Periodic Payment of Premiums, Rent, etc:
After instruction from the customers, banks undertake the monthly payment of insurance premium, rent, telephone bills, etc., from the accounts of customers.
3. Collection and Payment of Cheques:
On behalf of customers, bank collect the cheques deposited into the accounts of customers from other banks and deposit cash in the customers’ accounts.
4. Acting as Executors, Trustees and Attorneys:
Banks act as executors of will of the customers and implement their will after their death.
5. Conduct Share Market transactions:
A Demat account should be opened with Depository Participant and that demat account should be linked with savings bank account by the customer.
6. Preparation of Income Tax Return:
Banks prepare the annual income tax return on behalf of the customers and provide income tax related advice to them.
7. Dealing in Foreign Exchange:
Banks buy and sell foreign currencies on behalf of customers.
8. Acting as Correspondent:
Banks act as correspondent of customers and receive travel, ticket, passport, etc.
(b) Explain the services rendered by retailers to consumers?
1. Regular Supply of Goods:
Retailers maintain a ready stock of various products of different manufacturers for sale to consumers.
2. New Products Information:
The retailers provide important information about the new arrival of products through their personal.
3. Credit Facilities:
Sometimes retailers provide credit facilities to their customers and enable them to increase their level of consumption.
4. Wide Selection:
Retailers generally keep stock of a variety of products of different manufacturers.
5. Miscellaneous Services:
- Retailers provide free door delivery services to the customers.
- They provide after sale service to customers.
- They allow cash discounts on their sales.
Question 46 (a).
Write a note on e-commerce models?
1. Business to customers (B2C):
This is fastest growing segment in e-commerce space. Under this model, business concern sells directly to consumers.
2. Business to Business (B2B):
Under the model, business concerns transact with one another through internet. For instance, Snapdeal, Flipkart, Alibaba, Indiamart, Trade India.com etc.
3. Consumer to consumer (C2C):
Under this model, customers sell directly to other customers through online classified advertisement or through auction or through mobile or through market places.
Example, Indian ventures in C2C are Kraftly App (buying and selling anythings) which deals in handmade products of a wide range. Onceagainstore. com is a website that buys pre-owned women’s fashion products. Other players are Quikr, OLX, ebay, etc.
4. Customer to Business (C2B):
This model is reverse to auction model. Products like • automobile, electronic items, furniture and similar product are traded by customer through websites. Naukri.com and Monster.com are examples of Indian companies operating in this domain.
5. Business to Government (B2G):
This model envisages selling products and services by business consumer to Government organization. For instance TCS operates the passport application process for the Government of India as part off-line process.
(b) Explain any four personal investment avenues?
1. Public Provident Fund (PPF):
It is the safest long – term investment option for the investors in India. It is totally tax- free. PPF account can be opened in bank or post office. The money deposited cannot be withdrawn before 15 years and an investor can earn compound interest from this account.
However the investor can extend the time frame for the next five years if the investor does not opt to withdraw the amount matured for payment at maturity date. PPF investor can take loan against PPF account when he/she experiences financial difficulties.
2. Mutual Funds:
An individual investor who wants to invest in equities and bond With a balance of risk and return generally can invest in mutual funds. Nowadays people invest in stock markets through a mutual fund. Systematic investment plan is one of the best investment options in India.
3. Direct Equity or Share Purchase:
An individual can opt for investment in shares. But he has to analyse the market price of various shares traded in stock exchange, reputation of the company, consistency in the payment of dividend, the nature of the project undertaken by the company, growth prospects of industry in which a company is operating, before investing in shares. If the investment is made for a long time, it may yield good return.
4. Real Estate Investment:
Real estate is one of the fastest growing sectors in India. Buying a flat or plot is supposed to be the best decision amongst the investment options. The value of the real asset may increase substantially depending upon the area of location and other support facilities available therein.
Question 47 (a).
What are the functions of wholesalers?
Following are the functions of wholesalers:
- Collection of Goods: Wholesaler collects the goods from manufacturers or producers in bulk.
- Storage of Goods: Wholesaler collects and stores them safely in warehouses, till they are sold out.
- Distribution: Wholesaler sells goods to different retailers. Thus he performs the function of distribution.
- Financing: Wholesalers provide financial support to producers and manufacturers by providing money in advance to them.
- Risk Taking: Wholesaler buys finished goods from the producer and keeps them in the warehouses till the time they are sold and assumes the risk arising from price, spoilage of goods, and changes in demand.
- Grading, Packing and Packaging: Wholesaler classifies the goods into different categories.
- Providing Information: Wholesalers provide valuable information to retailers and producers.
- Transportation: A wholesaler arranges for the transport of goods from producers to his warehouse and from the warehouse to retailer.
(b) Explain the characteristics of a supermarket?
- Supermarkets are generally situated at the main shopping centres.
- The goods kept on racks with clearly labelled price and quality tags in such stores.
- The customers move into the store to pickup goods of their requirements, bring them to the cash counter, make payment and take home delivery.
- The goods are sold on cash basis only. No credit facilities are made available.
- Supermarkets are organized on departmerftal basis.
- It requires huge investment.