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TN State Board 12th Commerce Model Question Paper 1 English Medium


  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 50 words.
  6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in about 150 words.
  7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in about 250 words. Draw diagrams wherever necessary.

Time: 3 Hours
Max Marks: 90

Part -I

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

Question 1.
A marketable document of title to a time deposit for a specified period may be referred to as a ……………
(a) Treasury Bill
(b) Certificate of Deposit
(c) Commercial Bill
(d) Government Securities
(b) Certificate of Deposit

Question 2.
The rules and regulations of Stock exchange is framed by………….. guidelines.
(a) RBI
(b) Central Government
(c) SEBI
(d) BSE
(c) SEBI

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 3.
……….. was the first company to trade its shares in Demat form.
(a) Tata Industries
(b) Reliance Industries
(c) Infosys
(d) Birla Industries
(b) Reliance Industries

Question 4.
The purpose of an application blank is to gather information about the
(a) Company
(b) Candidate
(c) Questionnaire or Interview Schedule
(d) Competitors
(a) Company

Question 5.
Training methods can be classified into training.
(a) Job rotation and Job enrichment
(b) On the Job and Off the Job
(c) Job analysis and Job design
(d) Physical and mental
(b) On the Job and Off the Job

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 6.
Green Shelter concept was introduced by group:
(a) ACME
(b) Tata
(c) Reliance
(d) ICI
(a) ACME

Question 7.
Any person who buys any goods or avails services for personal use, for consideration is called as …………..
(a) Customer
(b) Consumer
(c) Buyer
(d) User
(b) Consumer

Question 8.
It is the responsibility of a consumer that he must obtain …………. as a proof for the purchase of goods.
(a) Cash receipt
(b) Warranty card
(c) Invoice
(d) All of these
(c) Invoice

Question 9.
The International Organisation of Consumers Unions (IOCU) was first established in …………..
(a) 1960
(b) 1965
(c) 1967
(d) 1987
(a) 1960

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 10.
Unpaid seller can exercise his right of lien over the goods, where he is in possession of the goods as ……………
(a) Owner of goods
(b) Agent of buyer
(c) Bailee for buyer
(d) All of these
(d) All of these

Question 11.
Which endorsement relieves the endorser from incurring liability in the event of dishonour?
(a) Restrictive
(b) Facultative
(c) Sans recourse
(d) Conditional
(b) Facultative

Question 12
…………….. Entrepreneur Supply Services Unlike.
(a) Hoteliers
(b) Banking
(c) Airlines
(d) Livestock
(d) Livestock

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 13.
Who can issue stock? ‘
(a) Public
(b) Private
(c) One Person
(d) Small
(a) Public

Question 14.
A Public Company having a paid up Share Capital of ₹ ……… or more may have a Director, elected by such small shareholders.
(a) One
(b) Three
(c) Five
(d) Seven
(c) Five

Question 15.
Who is not entitled to speak at the annual general meeting of the company?
(a) Auditor
(b) Shareholder
(c) Proxy
(d) Directors
(c) Proxy

Question 16.
Treasury Bills commands ………………
(a) High Liquidity
(b) Low Liquidity
(c) Medium Liquidity
(d) Limited Liquidity
(a) High Liquidity

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 17
………….. enables small investors to participate in the investment on share capital of large companies.
(a) Mutual Funds
(b) Shares
(c) Debentures
(d) Fixed deposits
(a) Mutual Funds

Question 18.
……………… e-recruitment is possible only through facility.
(a) Computer
(b) internet
(c) Broadband
(d) 4G
(b) internet

Question 19.
Identify the test that acts as an instrument to discover the inherent ability of a candidate.
(a) Aptitude Test
(b) Attitude Test
(c) Proficiency Test
(d) Physical Test
(a) Aptitude Test

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 20.
Case study method is type of trainee.
(a) Only theoretical training
(b) Both theory and practical training
(c) Hands on training
(d) Observation Training
(b) Both theory and practical training

Part – II

Answer any seven questions. Question No. 30 is compulsory. [7 x 2 = 14]

Question 21.
What is meant by innovation?
Innovation refers to the preparation of personnel and organisation to face the changes made in the business world. Continuous changes are being made in the business. Innovation includes developing new material, new products, new techniques in production, new package, new design of a product and cost reduction.

Question 22.
Bring out the meaning of MBE.
Management By Exception is an important principle of managerial control suggested by the classical writers on management. It is based on the belief that an attempt to control everything results in controlling nothing. Management by exception is a style of business management that focuses on identifying and handling cases that deviate from the norm.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 23.
Who are the participants in a Capital Market?
There are many players in the capital market. The participants of the capital market include individuals, corporate sectors, Govt., banks and other financial institutions.

Question 24.
Explain the two oldest money markets.

  • Treasury Bills- These are very popular and enjoy a higher degree of liquidity since they
    are issued by the Government.
  • Commercial Bills- It is an instrument drawn by a seller of goods on a buyer of goods.

Question 25.
What is meant by Commodity Exchange?
A commodity exchange is an exchange where commodities are purchased and sold. Commodities are listed here: Metals (e.g. gold, silver, copper); Energy (e.g. crude oil, natural gas); Agricultural (e.g. rice, wheat, cocoa); Livestock and meat.

Question 26.
What are the various ID proofs?
Proof of identity: PAN card, voter’s ID, passport, driver’s license, bank attestation, IT returns, electricity bill, telephone bill, ID cards with applicant’s photo issued by the central or state government are the ID proofs.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 27.
State two features of HRM.
Features of Human Resource Management:

  • Universally relevant: Human Resource Management has universal relevance.
  • Goal oriented: The accomplishment of organisational goals is made possible through best utilisation of human resource in an organisation.

Question 28.
What is promotion?
Based on seniority and merits of the employees they are given opportunity to move up in the organisational hierarchy. This is called promotion.

Question 29.
What do you mean by test?
Several tests are conducted in the selection process to ensure whether the candidate possesses the necessary qualification to fit into various positions in the organization.

Question 30.
State e-learning method.
E-leaming is the use of technological process to access of a traditional classroom or office. It is also often referred to as online learning or web based training.

Part – III

Answer any seven questions. Question No. 40 is compulsory. [7 x 3 = 21]

Question 31.
Explain the types of market on the basis of time.

  • Very Short Period Market: Markets which deal in perishable goods like, fruits, milk, vegetables, etc., are called as very short period market. There is no change in the supply of goods.
  • Short Period Market: In certain goods, supply is adjusted to meet the demand. The demand is greater than supply. Such markets are known as Short Period Market.
  • Long Period Market: This type of market deals in durable goods, where the goods and services are dealt for longer period usages.

Question 32.
What are the factors affecting Price of Product?
Factors affecting Price of product/service:
(a) Internal Factors:

  • Marketing Objectives
  • Marketing Mix Strategy
  • Organizational considerations
  • Costs
  • Organization Objectives

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

(b) External Factors:

  • The market and demand
  • Competition
  • Customers
  • Suppliers
  • Legal factors
  • Regulatory factors.

Question 33.
Elucidate how E-Commerce differs from E-Business.
E-commerce simply refers to the buying and selling of products and services through online but E-business goes away beyond the simple buying and selling, of goods and service and much wider range of business processes, such as supply chain management, electronic order processing and customer relationship management.

Question 34.
Define “Consumer Rights”
Consumer Right is interpreted as “the right to have information about the quality, potency, quantity, purity, price, and standard of goods or services”.

Question 35.
What is the Pecuniary Jurisdiction of the State Commission?
The Jurisdiction of the State Commission is as follows:

  • The State Commission can entertain complaints within the territory of entire state and the compensation, if any claimed exceed Rs. 20 lakhs and below Rupees One Crore.
  • The State Commission also has the jurisdiction to entertain appeals against the orders of any District Forum within the State.

Question 36.
Write a note on future environment of business.

  • The future environment of business in this age of rapid technological advancement has been captured aptly.
  • It is now important for every business to meet the challenges posed by the environment in order to remain competitive.
  • The presence of complex variables impacting business should be understood and alternative measures for solving the issues should be developed.

Question 37.
State any three impacts of Globalization.
Impacts of Globalization:

  • Corporations got a competitive advantage from lower operating costs, and access to new raw materials and additional markets.
  • Multinational corporations (MNCs) can manufacture, buy and sell goods worldwide.
  • Globalization has led to a boom in consumer products market.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 38.
Discuss in detail the rights of an unpaid seller against the buyer personally.
Where the Property in the Goods does not pass to the Buyer. Right of an Unpaid Seller against the Buyer Personally:

  • Suit for price
  • Suit for Damages for Non-acceptance .
  • Suit for Cancellation of the Contract before the Due Date- Where the buyer cancels the contract before the date of delivery, the seller may either treat the contract as continuing or wait till the due date.
  • Suit for Interest

Question 39.
Explain the commercial functions of entrepreneur.
(i) Production or Manufacturing: Under production function, entrepreneur has to take decision relating to selection of factory site, design and layout, type of products to be manufactured, research and development, product design, etc.

(ii) Marketing: Entrepreneur has to carry out following functions pertaining to marketing
aspect namely consumer research, product planning and development, standardisation, packaging, pricing, warehousing, distribution, promotion, etc.

(iii) Accounting: Entrepreneur has to arrange to prepare trading and profit and loss account in order to know the profit or loss incurred out of operation of the business and prepare balance sheet to know the financial status of business at a particular day. Besides, cash flow and fund flow statements are prepared to ensure the adequacy of funds and cash for meeting various working capital needs of the business.

(iv) Finance: An entrepreneur has to take decisions like choosing the right type of financing, framing the best dividend policy, acquiring of funds, efficiently managing fixed and current assets, maximising shareholders wealth and investing of funds efficiently and effectively.

(v) Human Resource Management: Entrepreneur has to estimate the manpower needs of the enterprise and accordingly organise for recruitment procedure, selecting manpower, induction and training, determining compensation structure and incentives, designing motivation programmes, structuring wellbeing measures for employees, putting in place safety mechanism at workplace, performance evaluation and career advancement and structuring social security programmes.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 40.
Explain about the agricultural entrepreneur.
Agricultural entrepreneurs are those entrepreneurs who raise farm products and market them. They use the various inputs like labour, fertilizer, insecticide, water technology, etc., to raise the products and market their products either directly or through co-operative entities or through brokers or through tie up with large retailers.

Part – IV

Answer all the following questions. [7 x 5 = 35]

Question 41(a).
What are the duties of a director?
Directors act as agents of the shareholders and act as trustees of shareholders. The following are the duties of directors:
Collective Duties of Directors: Directors as a part of Board perform certain duties collectively. The duties are as follows:

  • Approval of annual accounts and authentication of annual accounts
  • Appointment of First Auditors
  • Passing of resolutions at board meetings
  • Directors report to shareholders highlighting the performance of the company.

General duties of Directors:

  • Delegating power to any committee
  • Issuing instructions to employees for implementation of policy
  • Appointing their subordinates like Managing director, Manager, Secretary and other employees
  • Act in Good faith in order to promote the objectives of the company


(b) How market information is helpful to invention of new product in the market?
According to Clark and Clark, market information means “all the facts, estimates, opinions and other information used in marketing of goods”.
From the above definition the details about the market may be obtained from conducting market research and other inventory methods. Market research is solely concerned with the collection of information about the market.
The following information may be collected:

  • Goods needed by the customers.
  • Time and want of the goods
  • Quality wanted
  • Size of the market
  • Means of transport

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Use to Invent New product: Adequate and accurate information help in the formulation of policies. Based on the taste and preferences, demand and supply of the products, the company can introduce new product. Also the company has to increase the quality and number of products depending upon the information available.

Question 42.
(a) State the powers of the directors.
Powers of Directors: The directors must have powers to carry on objectives of the company.
The powers may be of four types:

  • Statutory Powers of Directors
  • Managerial Powers of Directors
  • Powers only with a resolution
  • Other Powers

Statutory Powers: The following powers must be used in the Board meeting:

  • Power to make calls on shareholders in respect of money unpaid on their shares
  • Power to issue debentures
  • Power to borrow money other than on debentures
  • Power to invest the funds of the company
  • Power to approve financial statement and Board report

Managerial Powers:

  • Power to allot, forfeit or transfer shares of company
  • Power to decide the terms and conditions to issue debentures
  • Power to appoint Managing Director, Manager and Secretary of the company.

Powers only with a resolution:

  • To sell or lease any asset of the company
  • To issue bonus shares
  • To allow time to the director for repayment of the loan

Other Powers:

  • Power to fill casual vacancy
  • Power to appoint the first auditor of the company
  • Power to appoint alternative directors, additional directors
  • Power to remove key managerial personnel


(b) Write about the contribution of Drucker to management.
“Management is a multipurpose organ that manages a business and manages manager, and manages worker and work.”— Peter F. Drucker: The Practice of Management.
Drucker stresses three jobs of management:

  • Managing a business;
  • Managing manager; and
  • Managing workers and work.

Even if one is omitted, It would not have management anymore and it also would’not have a business enterprise or an industrial society. According to P. Drucker, the manager has to balance and integrate three major jobs of a business enterprise as mentioned above. Hence, a manager is a dynamic and life-giving element in every business. Without efficient management it cannot be possible to secure the best allocation and utilisation of human, material and financial resources.

Question 43.
(a) Distinguish between new issue market and secondary market.

Basis For Comparison New Issue Market Secondary Market
Meaning The market place for new shares is called primary market.

(Initial Issues Market)

The place where formerly issued securities are traded is known as Secondary Market. (Resale Market)
Buying Direct Indirect
Financing It supplies funds to budding enterprises and also to existing companies for expansion and diversification. It does not provide funding to companies.
How can securities be sold? Only once Multiple times
Buying and Selling between Company and Investors Investors
Gained person Company Investors
Intermediary Underwriters Brokers
Price Fixed price                               “ Fluctuates, depends on the demand and supply force.


Not rooted to any specific spot or geographical location.      . It has physical existence.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium


(b) Explain the functions of Stock Exchange. (Any 5)

  • Ready and Continuous Market: Stock exchange helps the investors to sell his securities easily. And also he can convert his cash into securities.
  • Correct Evaluation of Securities: The prices at which securities are bought and sold are recorded and informed to the public. These prices are called “market quotations”.
  • Protection to Investors: All dealings in a stock exchange are in accordance with well-defined rules and regulations. Any malpractice will be severely punished.
  • Proper Channelisation of Capital: People like to invest in the shares of companies which yield good profits. Also people invest in the companies which are giving good dividends.
  • Facilities for Speculation: Speculation is an integral part of stock exchange operations. As a result of speculation, demand for and supply of securities are equalized.

Question 44.
(a) Explain the different methods of recruitment.
Recruitment means selecting the right person for the right job. There are basically two ways by which an organisation can recruit its employees – Internal and External sources. External sources can further be classified into Direct and Indirect sources.

Internal Sources:
Transfer, Upgrading, Promotion, Demotion, Recommendation by existing Employees, Job rotation, Retired employees, Dependants, Previous applicants, Acquisitions and Mergers.

External Sources:

  • Direct – Advertisements, Unsolicited applicants, Walk-ins, Campus Recruitment, Recruitment at Factory gate, Rival firms, e-Recruitment.
  • Indirect – Employee referral, Govemment/Public Employment Exchanges, Employment Agencies, Employment Consultancies, Professional Associations, Deputation, Word of mouth, Labour Contractors, Job Portals, Outsourcing, Poaching.


(b) State the advantages of warehousing.

  • Goods produced may be stored till the time of demand. Hence the goods are stored in warehouses.
  • Also the goods are stored till the goods have good quality.
  • Warehouses create time utility by storing the goods throughout the year and release them as and when they are needed.

Several types of warehouses are used for storing of goods.
They are as follows:

  • Public warehouse
  • Private warehouse
  • Bonded warehouse

Question 45.
(a) Explain the duties of consumers.
Apart from rights, there are certain duties imposed on the consumer. The following are the
duties of consumers:

  • Buying Quality Products at Reasonable Price: It is the duty of a consumer to purchase a product after gaining a thorough knowledge of its price, quality and other terms and conditions.
  • Ensure the Weights and Measurement before Purchase: The consumer should ensure that he/she is getting the product of exact weight and measure.
  • Reading the Label Carefully: It is the duty of the consumer to read the label of the product thoroughly.
  • Beware of False and Attractive Advertisements: It is the prime duty of the consumer about the genuineness of the advertisement, before purchasing the product.
  • Ensuring the Receipt of Cash Bill: It is a legitimate duty of consumers to get the cash receipt and warranty card supplied along with the bill.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium


(b) Discuss the role of macro environment of business.
This is the general or overall environment in which the business operates. The success of a business is dependent on its ability to adapt to the macro environment.

Role of Macro-environment:

  • The business is an integral part of the economic system prevalent in a nation.
  • Business is a part of the society. Social environment refers to the sum total of factors of the society in which the business is located.
  • The success of a business lies in its ability to adapt and sustain to political and legal changes. The legislative, executive and judiciary are the three political institutions which directs and influences a business.
  • The natural, geographical and ecological factors have a bearing on the business.

Question 46.
(a) Distinguish between sale and agreement to sell.

Basis for Comparison Sale Agreement to Sell
1. Ownership The property (ownership or title) in the goods passes from the seller to the buyer immediately. The property (ownership or title) in the goods has to pass at a future time or after the fulfilment of certain conditions.
2. Risk of Loss Where the goods sold under the contract of sale are destroyed, the loss falls fully on the buyer as the ownership has already passed. Where the goods under the agreement to sell are destroyed, the loss falls fully on the seller as the ownership is still vested with seller.
3. Consequences of violating the contract Where the buyer fails to pay the price, the seller cannot seize the goods. Where the buyer violates the contract, the seller can repossess the goods from the former.
4. Nature of contract It is an executed contract. It is an executory contract, i.e., contract yet to be performed.
5. Insolvency of the Buyer In a sale, if a buyer becomes insolvent before he pays for the goods even though the goods sold are under the possession of the seller, the latter has to return them to the Official Receiver.. If the buyer becomes insolvent before the payment of the price, the seller can retain the goods if they are under his possession.


(b) Explain the different kinds of endorsements.
When the person signs on the back of the instrument to transfer his interest, it is known as endorsement. The endorsements are of various types:

  • Blank or general endorsement : When the endorser puts his mere signature on the back of an instrument without mentioning the name of the person to whom the endorsement is made, it is called Blank Endorsement
  • Endorsement in full or special endorsement : If the endorser, in addition to his signature, mentions the name of the person to whom it is endorsed, is known as endorsement in full or special endorsement.
  • Conditional endorsement : When the endorser of a negotiable instrument makes his liability dependent upon the happening of an event which may or may not happen, it is called conditional endorsement.
  • Restrictive endorsement : When an endorsement restricts or prohibits further negotiability of the instrument, it is called Restrictive Endorsement.
  • Partial Endorsement : Where the endorsement seeks to transfer only a part of the amount payable under the instrument, the endorsement is called Partial Endorsement.

Tamil Nadu 12th Commerce Model Question Paper 1 English Medium

Question 47.
(a) How do you classify entrepreneurs?
Entrepreneurs are now broadly classified into three groups namely risk bearer, organiser and innovator.
(i) Entrepreneur as a risk bearer: Entrepreneurs acts as an agent combining all factors of production to produce a product or service in order to sell at uncertain price in future.

(ii) Entrepreneur as an organiser: Entrepreneur is one who brings together various factors of production and creates an entity to produce product or service and supervise and coordinates several functions in the process.

(iii) Entrepreneur as an innovator: According to Joseph A. Schumpeter in the year 1934 used innovation as a criterion to define an individual as entrepreneui.
According to him, entrepreneur is one who-

  • Introduces a brand new product in the market.
  • Institutes new technology to produce a new product.
  • Discovers new course of supply of raw materials.


(b) Discuss the nature of functional entrepreneurs.
Nature of functional entrepreneurs:

  • Innovative Entrepreneur: He is a person who introduces new project. They observe the environment regarding information to the new venture.
  • Imitative Entrepreneur: He refers to the person who simply imitates existing knowledge or technology already in advance countries. Redesigning of products suited to the local conditions.
  • Fabian Entrepreneur: These are said to be conservatives and sceptical about any changes in their organisation. They are of risk-averse.
  • Drone Entrepreneur: Drone entrepreneurs are those who are totally opposed to changes in the environment. They used to operate in the niche market.

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