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TN State Board 11th Commerce Model Question Paper 3 English Medium

General Instructions:

  1. The question paper comprises of four parts.
  2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
  3. All questions of Part I, II, III and IV are to be attempted separately.
  4. 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
  5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about one or two sentences.
  6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in above three to five short sentences.
  7. 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


Choose the correct answer. Answer all the questions. [20 × 1 = 20]

Question 1.
Which bank has the power to issue bank notes?
(a) Central bank
(b) Commercial bank
(c) Co – operative banks
(d) Foreign banks
(a) Central bank

Question 2.
Which one is not land transport?
(a) Pack animals
(b) Bullock cart
(c) Tramways
(d) Liner
(d) Liner

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 3.
Occupation of a Doctor is called …………………..
(a) Employment
(b) Business
(c) Profession
(d) Sole proprietor
(c) Profession

Question 4.
Match List – I with List – II and select the correct answer using the codes given below:

List – I

List – II

(i) Wholesaler 1. Mercantile agent
(ii) Retailer 2. Particular line of products
(iii) Single line stores 3. Small qunatities
(iv) Broker 4. First middlemen


Tamil Nadu 11th Commerce Model Question Paper 3 English Medium img 1

Question 5.
Primary industries may be divided as follows:
(I) Extractive industries
(II) Manufacturing industries
(III) Genetic industries
(IV) Construction industries
(a) (I) and (II)
(b) (II) and (III)
(c) (I) and (III)
(d) (I) and (IV)
(c) (I) and (III)

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 6.
Centralised control in MNCs implies control exercised by ………………………
(a) Branches
(b) Subsidiaries
(c) Headquarters
(d) Parliament
(c) Headquarters

Question 7.
Large scale fixed retailers include ………………………..
(a) Super markets
(b) Speciality stores
(c) General stores
(d) Second shops
(a) Super markets

Question 8.
Exim Bank was set up in the year ……………………..
(a) 1949
(b) 1972
(c) 1935
(d) 1982
(d) 1982

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 9.
Social responsibility towards employees represents the following except ………………………
(a) Reasonable remuneration
(b) Proper facilities
(c) Social security
(d) Exploitation
(d) Exploitation

Question 10.
Which one of the following is not correctly matched?
(a) Imperial bank – Mumbai
(b) RBI – 2013
(c) RTGS – Commercial bank
(d) Development banks – SBI
(d) Development banks – SBI

Question 11.
Enterprises operating in several countries but managed from one country is termed as ………………………
(a) Government company
(b) Multinational company
(c) Private company
(d) Joint venture
(b) Multinational company

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 12.
The money can be withdrawn from the PPF, after …………………….. years.
(a) 14
(b) 13
(c) 15
(d) 12
(c) 15

Question 13.
The exporters appoint a ……………………. to fulfill the customs formalities.
(a) Clearing agent
(b) Forwarding agent
(c) Commission agent
(d) Factor
(b) Forwarding agent

Question 14.
The compensation given for breach of contract is ………………………..
(a) Damage
(b) Remuneration
(c) Money
(d) Cheque
(a) Damage

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 15.
Ethics is important for ………………………
(a) Top management
(b) Middle level managers
(c) Non – managerial employees
(d) All of them
(d) All of them

Question 16.
World Bank is located at ……………………..
(a) Washington DC
(b) Newyork
(c) Tokyo
(d) Hongkong
(a) Washington DC

Question 17.
Which of the following is not a function of a central bank?
(a) Guiding and regulating the banking system of country
(b) Deal with the general public
(c) Acts as government banker
(d) Maintains deposit accounts of all other bank
(b) Deal with the general public

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 18.
Dispersal of decision making power to branches/affiliates/subsidiaries is by the head officer represents ………………………..
(a) Centralisation
(b) Decentralisation
(c) Power
(d) Integration
(b) Decentralisation

Question 19.
The document which authorises to deliver the goods either in part or full is called ………………………….
(a) Warehouse warrant
(b) Dock receipt
(c) Dock warrant
(d) None of these
(c) Dock warrant

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 20.
Which of the following holder is given voting rights?
(a) Debentures
(b) Preference shares
(c) Equity shares
(d) Bonds
(c) Equity shares


Answer any seven questions in which question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
Warehouses mean the places to store the goods for future purpose. It renders invaluable services to the society by performing the various functions. Give any three functions of warehouses?

  1. Storage
  2. Price stabilization
  3. Equalization of demand and supply

Question 22.
Murugan is the famous auditor in Madurai. Identify the type of economic activity highlighted in the case. Write the meaning of it?
The economic activity highlighted in this case is profession. Profession means something which is more than a job. For the profession a special qualification is necessary. The income from the profession is professional fee. It may be different from one profession to another profession.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 23.
Define commerce?
According to Evelyn Thomas, “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products”.

Question 24.
Insurance covers different types of risks. It can be broadly classified into

  1. Life insurance
  2. Non – life insurance. What is the other name for Non – life insurance? How it is classified?

The other name for Non – life insurance is called as General insurance. It can be further classified into:

  1. Fire insurance
  2. Marine insurance
  3. Health insurance
  4. Miscellaneous insurance

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 25.
Write any two differences between warehouse warrant and warehouse receipt?

Warehouse Warrant

Warehouse Receipt

1. It is a document of title of goods. 1. It is not a document of title of goods.
2. It is not only an acknowledgement for the receipt of goods but also gives an authority to get delivery of goods by the owner or by third party. 2. It is only an acknowledgement for the receipt of goods.

Question 26.
Briefly explain the need for Debit card?
ATM card is also called debit card. This card is more useful in purchase of goods and services anywhere in India if the shop maintains a swiping machine facility.

Question 27.
What is a Statutory Company?
Companies are established by a Special Act passed in Parliament or State Assembly. Rules relating to day – to – day management of statutory companies are specified in the Articles of Association (AOA). Examples: LIC, RBI, Railways, etc.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 28.
Write 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.

Question 29.
How the RBI is acting as banker to the government?
RBI is acting as a banker to the government. It is one of the traditional functions of RBI. It accepts money into central and state government’s accounts and make payments on their behalf. It manages the governments debts. It advises the government and the terms of new loans.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 30.
Write short note on debentures?
Debentures are an important instrument for raising long term debt capital. A company can raise funds through issue of debentures which bear a fixed rate of interest.


Answer any seven questions in which question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
At first the co – operative movement was started by Robert Owen in the year 1844. Who are Rochdale pioneers?
At first, the cooperative movement was started by Robert Owen, in the year 1844. He formed a consumer’s cooperative society in England with 28 workers as members, called “Rochdale Society of Equitable Pioneers”.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 32.
List the steps in factoring process?
Factoring is derived from a Latin term “facere” which means ‘to make or do’. Factoring is an arrangement wherein the trade debts of a company are sold to a financial institution at a discount.

Factoring Process:

  1. The firm enters into a factoring arrangement with a factor, which is generally a financial institution.
  2. Whenever goods are sold on credit basis, an invoice is prepared and a copy of the same is sent to the factor.
  3. The debt amount due to the firm is transferred to the factor through assignment.
  4. On the due date, the amount is collected by the factor from the customer.
  5. After retaining the service fees, the remaining amount is sent to the firm by the factor.

Question 33.
List out the products produced by MSME in Tamil Nadu?
In Tamil Nadu, MSMEs sector produces a wide variety of products in almost all fields. The prominent among them are the textile, electronic products, engineering products, auto ancillaries, leather products, chemicals, plastics, garments, jewellery etc.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 34.
What do you understand by Burglary Insurance?
Burglary Insurance: This policy comes under the category of insurance of property. Any loss of damage due to theft, larceny, burglary, house breaking and acts of nature are covered by this policy. Compensation of actual loss is done.

Question 35.
It is the oldest form of organisation. It is administrated by a separate department. What is the form of organisation? Describe any three features of this organisation?
1. Formation:
A departmental undertaking is established either as a separate full-fledged ministry or as a sub-division of a ministry (i.e. department) of the Government.

2. No Separate Entity:
A departmental undertaking does not have an independent entity distinct from the Government.

3. Accounting and Audit:
The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to all Government departments.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 36.
Mention any three rights of partners?
Rights of Partners;

  1. Right to take part in business: Every partner has a right to take part in the management of the business.
  2. Right to consult: Every partner has the right to consult in all the matters concerning the firm.
  3. Right to share profit: Every partner is entitled to share the profits in the agreed ratio. If no ratio is specified in the deed, the profit must be shared equally.

Question 37.
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.

Question 38.
It is a policy taken as a safeguard against the medical costs. It is a contract between an insurer and an individual or a group. What is the name of the policy? Mention a few points about this?
In mid 80’s, most of the hospitals in India were government owned and treatment was free of cost. With the advent of Private Medical Care, the need for Health Insurance was felt and various Insurance Companies introduced Health Insurance as a Product. Presently the health insurance exists primarily in the form of ‘Mediclaim policy’.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 39.
Without money customers can purchase costly articles with this method. It is useful to Middle – class people. There are two methods- hire purchase and installment system. Mention any three differences between hire purchase and installment system?

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 40.
What is meant by government company?
A “Government company” is defined under Section 2(45) of the Companies Act, 2013 as “any company in which not less than 51% of the paid – up share capital, is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company”.


Answer all the questions. [7 × 5 = 35]

Question 41 (a).
Compare business with profession and employment?

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium


(b) Explain the different types of warehouses on the basis of ownership?

  • Private Warehouses: Private warehouses are built and owned by private business enterprises in order to store the products produced by them.
  • Government Warehouses: They are created and operated by the Government to implement the programmes of the Government.
  • 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.
  • 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.
  • 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.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 42 (a).
Discuss the advantages of transport?
(A) Advantages of railway transport:

  1. Railways are well suited for carrying heavy and bulky goods over long distances.
  2. It can provide long distance travel throughout the day and night with unbroken services.

(B) Advantages of inland waterways:

  1. It is considered as the cheapest mode of transport among the other modes of transport.
  2. It is most suitable for heavy loads.

(C) Advantages of air transport:

  1. It provides a regular, convenient, efficient and quick service.
  2. Perishable goods like fruits, vegetables, egg, meat, etc., can be transported quickly.


(b) 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.

3. Indemnity:
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 qause’. 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.

5. Contribution:
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.

6. Subrogation:
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.

7. Mitigation:
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.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 43 (a).
Business owned by a single person is known as sole trading business. He contributes the required capital. Explain the characteristics of sole trading business?

  1. Ownership by one man: This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manages the entire affairs.
  2. Freedom of work and Quick Decisions: Since an individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.
  3. Unlimited Liability: When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.
  4. Enjoying Entire Profit: He strives tirelessly for the improvement and expansion of his business and enjoys all the benefits of his hard work.
  5. Absence of Government Regulation: A sole proprietor concern is free from Government regulations. No legal formalities are to be observed in its formation, management or in its closure.
  6. No Separate Entity: The sole trading concern comes to an end with death, disability, insanity and insolvency of the individual.
  7. Maintenance of Secrecy: Since he/she manages all the affairs of the business, the secrecy can be maintained easily.


(b) What are the rights of a partner?

  1. Right to take part in business: Every partner has a right to take part in the management of the business.
  2. Right to be consultant: Every partner has the right to be consulted in all the matters concerning the firm. The decision of the majority will prevail in all the routine matters.
  3. Right of access to books, record and document: Every partner has the right of access to all records and books of accounts, and to examine and copy them.
  4. Right to share profit: Every partner is entitled to share the profits in the agreed ratio. If no profit – sharing ratio is specified in the deed, they must be shared equally.
  5. Right to receive interest: A partner has the right to receive interest on loans advanced by him to the firm at the agreed rate, and where no rate is stipulated, interest @ 6% p.a. allowed.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 44 (a).
Briefly explain the auxiliaries to trade?
1. Commerce includes not only trade but also services such as transport, warehousing, packaging, insurance, banking and sales promotion which are incidental or auxiliaries to trade.

2. Trade: The term trade is used to denote buying and selling. Therefore who buys and sells is a trader. A trader is a middleman between the producer and the consumer.

3. Transportation: Goods produced are to be sent to different places where they are demanded. It is done by transporting.

4. Banking: To start the business or to run it smoothly, we need money. Banks supply money in the form of loan. Business activities cannot be undertaken unless funds are available. The funds can be obtained from the bank.

5. Insurance: Business involves many types of risks. Factory building, machinery, furniture must be protected against fire, theft and other risks. Employees are also protected against the risk of accident. Insurance provides protection in all such cases.

6. Warehousing: Usually goods are not sold or consumed immediately after the production. They are to be kept in stock to make them available as and when required. Warehousing helps the firms to overcome the problem of storage and stores the goods for future usage.


(b) A Joint stock company is a distinct form of business organisation. It is useful to overcome the limitations of sole trader and partnership. There are so many features of company. What are the characteristics of Joint stock company?
Characteristics of a Joint stock Company:
1. Separate legal entity:
Under Incorporation a company becomes a separate legal entity as compared to its members. The company is distinct and different from its members.

2. Limited Liability:
The liability of the members of the company is limited to contribution to the assets of the company upto the face value of shares held by him. A member is liable, to pay only the uncalled money due on shares held by him.

3. Transferability of shares:
Shares in a company can be freely transferable. When a member transfers his shares to another person, the transferee becomes the shareholder of the company.

4. Common Seal:
A company is an artificial person and does not have a physical presence. So the common seal is necessary because the company cannot sign the documents. It is the official signature of the company.

5. One Share – One Vote:
The principle of voting in a company is one share – one vote. If a person has 10 shares, he has 10 votes in the company. So in a company, money is given more importance than a man.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 45 (a).
List out the advantages of international trade?

  1. Geographical Specialization: Countries across the world differ significantly in terms of natural resources, capital equipment, manpower, technology and land and so on.
  2. Optimum use of Natural Resources: International business operates on a simple principle that a country which can produce more efficiently and trade the surplus production with other countries has to procure what it cannot produce more efficiently.
  3. Economic Development: International business helps the developing countries greatly in achieving rapid economic development by importing machinery, equipment, technology, talent, and so on.
  4. Generation of Employment: International business generates employment opportunities by assisting the expansion and growth of agricultural and industrial activities.
  5. Higher Standard of Living: On account of international business, the citizens of the country can buy more varieties of goods and services which cannot be produced cost effectively within the home country.
  6. Price Equilisation: International business helps to stabilize the prices of various commodities which are fluctuating on a daily basis in the world market.
  7. Prospects for Higher Profit: International business helps the firms which produce goods in excess to sell them at relatively higher price to various countries in the international market.
  8. Capacity Utilisation: International business enables the firms across the country to sell their goods and services on a large scale in the international market.
  9. International Peace: International business makes countries across the world become inter-dependent while these countries are independent in their functioning.


(b) Write down the structure of capital account?
Capital account consists of three components:

  1. Private Capital
  2. Banking Capital
  3. Official Capital

1. Private Capital:
Private capital consists of foreign investments, long term loan and foreign currency deposits.

2. Banking Capital:
Banking capital includes movement into external financial asset and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.

3. Official Capital:
It includes RBI’s holdings of foreign currency and special drawing rights (SDR) held by the Government.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 46 (a).
What are the advantages of sole trading business?
1. Easy Formation:
No legal formalities are required to initiate a sole trading concern. Any person capable of entering into a contract can start it, provided he has the necessary resources for it.

2. Incentive to Work hard:
There is a direct relationship between effort and reward. The fact that the entire profit can be taken by himself without sharing with anybody else induces him to work ceaselessly.

3. Small Capital:
Small capital is an important as well as specific advantage of sole proprietorship. Sole proprietor can start business with small capital.

4. Credit Standing:
Since his private properties are held liable for satisfying business debts, he can get more financial assistance from others.

5. Personal Contact with the Customers:
Since sole proprietor knows each and every customer individually he can supply goods according to their taste and preferences. Thus he can cultivate personal relationship with the customers.

6. Flexibility:
The sole trader can easily adjust himself to the changing requirements of his business.


(b) What are the factors influencing a channel of distribution? Explain any five?
The factors affecting a channel of distribution are as follows:

1. Product Characteristics:
Seasonal products are distributed through less layer of middlemen. Non standardized products that are made according to customer specifications may be delivered directly.

2. Market Characteristics:
The size of the market for the goods is a major factor while selecting the route for distribution of products.

3. Number of Consumers:
Large purchases made by few consumers require centralised distribution.

4. Middlemen factor:
Middlemen who are experienced and have produced more sales are wanted by all producers. Long channel naturally increases the cost and price of the product.

5. Capacity of the Manufacturer:
A financially strong producer may select a high technology oriented channel which will reduce cost in the long run.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 47 (a).
Explain the features of a government company?
The features of a government company:

1. Registration Under the Companies Act:
A Government company is formed through registration under the Companies Act, 1956; and is subject to the provisions of this Act, like any other company.

However, the Central Government may direct that any of the provisions of the Companies Act shall not apply to a Government company or shall apply with certain modifications. .

2. Executive Decision of Government:
A Government company is created by an executive decision of the Government, without seeking the approval of the Parliament or the State Legislature.

3. Separate Legal Entity:
A Government company is a legal entity separate from the Government. It can acquire property; can make contracts and can file suits, in its own name.

4. Whole or Majority Capital Provided by Government:
The whole or majority (at least 51%) of the capital of a Government company is provided by the Government; but the revenues of the company are not deposited into the treasury.

5. Majority of Government Directors:
Being in possession of a majority of share capital, the Government has authority to appoint majority of directors, on the Board of Directors of a government company.


(b) What are the advantages of co-operatives? Explain any five?
Advantages of co – operatives:

1. Voluntary organisation:
The membership of a cooperative society is open to all. Any person with common interest can become a member. The membership fee is kept low so that everyone would be able to join and benefit from cooperative societies.

2. Easy formation:
Cooperatives can be formed much easily when compared to a company. Any 10 members who have attained majority can join together for forming a cooperative society by observing simple legal formalities.

3. Democracy:
A co – operative society is run on the principle of ‘one man one vote’. It implies that all members have equal rights in managing the affairs of the enterprises.

4. Equal distribution of surplus:
The surplus generated by the cooperative societies is distributed in an equitable manner among members. Therefore all the members of the cooperative society are benefited.

5. Limited liability:
The liability of the members in a cooperative society is limited to the extent of their capital contribution. They cannot be personally held liable for the debts of the society.

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