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TN State Board 12th Commerce Model Question Paper 5 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.
…………… is a global and universal concept.
(a) Management
(b) Process
(c) Art
(d) Science
(a) Management

Question 2.
………… is the subsidiary function of management.
(a) Planning
(b) Co-ordination
(c) Innovation
(d) Controlling
(c) Innovation

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 3.
The Indian financial system can be broadly classified into………….. sector.
(a) Two
(b) Three
(c) One
(d) Four
(a) Two

Question 4.
Money market is a market for purely …………..
(a) Short term funds
(b) Long term funds
(c) Medium term funds
(d) None of these
(a) Short term funds

Question 5.
Which is not a foreign stock exchange?
(a) London stock exchange
(b) Bombay stock exchange
(c) Tokyo stock exchange
(d) New york stock exchange
(b) Bombay stock exchange

Question 6.
SEBI got the statutory powers in the year …………..
(a) 1988
(b) 1992
(c) 1969
(a) 1980
(b) 1992

Question 7.
The internal source of recruitment are …………..
(i) promotion
(ii) e-recruitment
(iii) retention
(iv) advertisements
(a) (i) and (ii)
(b) (i) and (iii)
(c) (ii) and (iii)
(d) (iii) and (iv)
(b) (i) and (iii)

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 8.
The types of Aptitude Test are …………..
(i) Numerical Reasoning Test
(ii) Attitude Test
(iii) Vocabulary Test
(iv) Interest Test
(a) (i) and (ii)
(b) (i) and (iii)
(c) (I) and (iv)
(d) (ii) and (iii)
(b) (i) and (iii)

Question 9.
On the job training is given to the employee at the ……………
(a) College
(b) Home
(c) Work place
(d) None of the above
(c) Work place

Question 10.
Find Out which is not suitable? The products marketed in commodity exchange are…………..
(a) Crude oil
(b) Rice
(c) Copper
(d) Gold
(b) Rice

Question 11.
The term ‘Caveat emptor’ is a Latin term, which means ………..
(a) Let the seller beware
(b) Let the buyer beware
(c) Consumer
(d) Marketer
(b) Let the buyer beware

Question 12.
The consumer is the of the modern marketing.
(a) Manager
(b) Director
(c) King
(d) None of these
(c) King

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 13.
The national commission should have ……….. members.
(a) 3
(b) 4
(c) 5
(d) 6
(c) 5

Question 14.
It is a situation in which a country loses its most educated and talented workers to other countries is known as…………
(a) Liberalisation
(b) Foreign trade
(c) Brain Drain
(d) Nationalisation
(c) Brain Drain

Question 15.
A bill of exchange drawn on a specified banker is ………..
(a) promissory note
(b) cheque
(c) hundi
(d) share
(b) cheque

Question 16.
The entrepreneurs classified on the basis of type of business are …………..
(i) Industrial entrepreneur
(ii) Technical entrepreneur
(iii) Professional entrepreneur
(iv) Business entrepreneur
(a) (z) and (ii)
(b) (i) and (iv)
(c) (ii) and (iii)
(d) (ii) and (iv)
(b) (i) and (iv)

Question 17.
The first two stages of formation of a company are ………..
(i) Issue of prospectus
(ii) Promotion
(iii) Issue of share certificate
(iv) Registration
(a) (i) and (ii)
(b) (ii) and (iv)
(c) (ii) and (iii)
(d) (i) and (iii)
(b) (ii) and (iv)

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 18.
A company may appoint more than 15 directors after passing a ……….. resolution.
(a) Special
(b) Ordinary
(c) Usual
(d) Commanding
(a) Special

Question 19.
A person can hold the position of Directorship in different companies upto the maximum of …………
(a) 15
(b) 10
(c) 18
(d) 20
(d) 20

Question 20.
A statutory meeting can be held within months.
(a) 10
(b) 5
(c) 6
(d) 3
(c) 6

Part – II

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

Question 21.
State the meaning of Authority.
Authority means the right of a superior to give the order to his subordinates. This is the issue of commands followed responsibility for their consequences.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 22.
What is debt market?
Debt Market is the financial market for trading in Debt Instrument (i.e. Government Bonds or Securities, Corporate Debentures or Bonds).

Question 23.
What is Government Securities Market?
A market whereby the Government or gilt-edged securities can be bought and sold is called ‘Government Securities Market’.

Question 24.
Write any 5 Stock Exchanges in India.

  • The Bombay Stock Exchange
  • Bangalore Stock Exchange Ltd.
  • The Madras Stock Exchange Ltd.
  • The Hydrabad Stock Exchange Ltd.
  • The Cochin Stock Exchange Ltd.

Question 25.
What is intelligence test?
Intelligence tests are one of the psychological tests, that is designed to measure a variety of mental ability, individual capacity of a candidate.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 26.
Define Product.
“A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or a need”, says Philip Kotler.

Question 27.
Give two examples of adulteration.

  • Powdered rice/wheat is adulterated with starch.
  • Coffee powder is adulterated with tamarind seed.

Question 28.
List down the essential elements of a contract of sale.
Following essential elements are necessary for a contract of sale:

  • Two Parties
  • Transfer of Property
  • Goods
  • Price
  • Includes both ‘Sale’ and ‘Agreement to Sell’.

Question 29.
Mention the other name for corporate entrepreneur.
Corporate entrepreneur is called promoter. He/she takes initiative necessary to start an entity under corporate format.

Question 30.
What is Resolution?
As per the Companies Act 2013, for taking any decision or executing any transaction, the consent of the shareholders, the Board of Directors and other specified is required. The decisions taken at a meeting are called resolutions.

Part – III

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

Question 31.
What are the Process of MBE?

  • Primarily, it is necessary to set objectives or norms with predictable or estimated results.
  • These performances are assessed and get equated to the actual performance.
  • Next, the deviation gets analysed. With an insignificant or no deviation, no action is required and senior managers can concentrate on other matters.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 32.
Explain any two functions of Capital Market.
(i) Savings and Capital Formation: In capital market, various types of securities help to, mobilize savings from various sectors of population (Individuals, Corporate, Govt., etc.). The twin features of reasonable return and liquidity in stock exchange are definite incentives to the people to invest in securities. This accelerates the capital formation in the country.

(ii) Permanent Capital: The existence of a capital market/stock exchange enables companies to raise permanent capital. The investors cannot commit their funds for a permanent period but companies require funds permanently.

Question 33.
What are the features of Human resources?

  • Human resource exhibits innovation and creativity.
  • Human resource alone can think, act, analyse and interpret.
  • Human resources are emotional beings.
  • Human resources can be motivated either financially or non-financially.
  • The behaviour of human resources are unpredictable.
  • Over years human resources gains value and appreciates.
  • Human resources are movable.
  • Human resource can work as a team.

Question 34.
What can be marketed in the Market?
The dynamic items that can be marketed are listed below:

  • Goods
  • Services
  • Experiences
  • Events
  • Persons
  • Places
  • Properties
  • Organisations
  • Information
  • Ideas

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 35.
Who are the members of the National Commission?
Members: The National Consumer Disputes Redressal Commission has been constituted by a Notification.

  • The National Commission should have five members.
  • One should be from judiciary.
  • Four other members of ability, knowledge and experience from any other fields.
  • It should include a woman.

Question 36.
Write about any three internal environmental factors of business.
The major internal factors affecting business decisions are:

  • Values system: The values of the founder/owner of the business , percolates down to the entire organisation and has a profound effect on the organisation.
  • Vision and objectives: The vision and objectives of a business guides its operations and strategic decisions.
  • Management structure: The structure of management/board and their style of functioning, the level of professionalism of management, the composition of the board are the various factors which affect the decision making.

Question 37.
Distinguish between Bill of Exchange and Promissory Note.

S. No. Basis of Difference Bill of Exchange Promissory Note
1. Nature of Undertaking A bill of exchange contains an unconditional order to pay money. A promissory note contains an unconditional undertaking to pay money.
2. No. of Parties There are three parties in a bill of exchange – drawer, drawee and payee. In a promissory note there are only two parties the maker and the payee.
3. Drawer of the instrument A creditor draws a bill on a debtor. A debtor executes a promissory note in favour of a creditor.
4. Identity of the parties In a bill of exchange, both the drawer and the payee can be one and the same person. In a promissory note, the maker himself cannot be the payee because the same person cannot be both the promisor and the promisee.

Question 38.
List down few examples of pure entrepreneurship.
Pure entrepreneurs are individuals who are propelled to enter into venture by psychological and economic motives. They nurture desire of starting a particular venture and earning high profit there from and thus attaining a social status. They apply their knowledge, skill and insight in making the venture a great success in order to earn maximum profit out of the venture. Dhirubai Ambani, Jamshedji Tata, T.V. Sundaram Iyengar, Seshadriji, Birla, Narayanamurthi, and Azim Premji are few examples of pure entrepreneurship.

Question 39.
Expand the following: STEP, JAM, TREAD, M-S1PS, SEED and New Gen IEDC.

  • STEP: Support to Training and Employment Programme for women
  • JAM: Jan-Dhan-Aadhaar-Mobile
  • M-SIPS: Modified Special Incentive Package Scheme
  • SEED: Science for Equity Empowerment and Development
  • New Gen IEDC: New Gen Innovation and Entrepreneurship Development Centre
  • TREAD: Trade Related Entrepreneurship Assistance and Development.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 40.
Who is a shadow director?
A shadow director is a person who is not the member of Board but has some power to run it and can be appointed as the director but according to his/her wish.

Part – IV

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

Question 41.
(a) Explain the principles of modern management.
The Father of Modem Management is Mr.Henry Fayol, and according to him there are 14 major principles of management which every manager has to practice for the success of the organisation.
(i) Division of Work: According to this principle the whole work is divided into small tasks.
This leads to specialization which increases the efficiency of labour.
(ii) Authority and Responsibility: This is the issue of commands followed by responsibility for their consequences.
(iii) Discipline: It is obedience, proper conduct in relation to others, respect of authority, etc.
It is essential for the smooth functioning of all organisations.
(iv) Unity of Command: This principle states that each subordinate should receive orders and be accountable to one and only one superior.
(v) Unity of Direction: All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager.
(vi) Subordination of Individual Interest to Mutual Interest: The management must put aside personal considerations and put company objectives firstly.
(vii) Remuneration: Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

(viii) The Degree of Centralization: The amount of power wielded with the central management depends on company size.
(ix) Line of Authority/Scalar Chain: This refers to the chain of superiors ranging from top management to the lowest rank.
(x) Order: Social order ensures the fluid operation of a company through authoritative procedure.
(xi) Equity: Employees must be treated kindly, and justice must be enacted to ensure a just workplace.
(xii) Stability of Tenure of Personnel: Stability of tenure of personnel is a principle stating that in order for an organisation to run smoothly, personnel (especially managerial personnel) must not frequently enter and exit the organisation.
(xiii) Initiative: Using the initiative of employees can add strength and new ideas to an organisation.
(x/v) Esprit de Corps/Team Spirit: This refers to the need of managers to ensure and develop morale in the workplace; individually and communally.


(b) Discuss the disadvantages of MBE.

  • The main disadvantage of MBE is, only managers have the power over really important decisions, which can be demotivating for employees at a lower level.
  • Furthermore, it takes time to pass the issues to managers. Managing employees who deviate from the normal procedures. Because of compliance failures are considered difficult to manage and typically find themselves with limited job duties and ultimately dismissed/ terminated.

Question 42.
(a) Discuss the role of financial market.

  • Savings Mobilization: Obtaining funds from the savers or ‘surplus’ units such as household individuals, business firms, public sector units, Government is an important role played by financial markets.
  • Investment: Financial market plays a key role in arranging the investment of funds thus
    collected, in those units which are in need of the same.
  • National Growth: Financial markets contribute to a nation’s growth by ensuring an unfettered flow of surplus funds to deficit units. Flow of funds for productive purposes is also made possible, ft leads to overall economic growth.
  • Entrepreneurship Growth: Financial markets contribute to the development of the entrepreneurial class by making available the necessary financial resources.
  • Industrial Development: The different components of financial markets help an accelerated growth of industrial and economic development of a country and thus contributing to raising the standard of living and the society’s well-being.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium


(b) Explain the features and types of Commercial Bills.

  • Drawer
  • Acceptor
  • Payee
  • Discounter
  • Endorser
  • Assessment
  • Maturity
  • Credit Rating


  • Demand and Usance Bills: A demand bill is one wherein no specific time of payment is mentioned. So, demand bills are payable immediately when they are presented to the drawee.
  • Clean Bills and Documentary Bills: Bills that are accompanied by documents of title
    to goods are called documentary bills. Clean bills are drawn without accompanying any document.
  • Inland Bills and Foreign Bills: Bills that are drawn and payable in India on a person who is resident in India are called inland bills.
  • Indigeneous Bills: The drawing and acceptance of indigenous bills are governed by native custom or usage of trade.
  • Accommodation and Supply Bills: Accommodation bills are those which do not arise out of genuine trade of transactions.

Question 43.
(a) What are the benefits of Dematerialisation?

  • The risks relating to physical certificates like loss, theft, forgery are eliminated completely with a Demat Account.
  • The risk of paper work enables quicker transactions and higher efficiency in trading.
  • The shares which are created through mergers and consolidation of companies are credited automatically in the Demat account.
  • There is no stamp duty for transfer of securities.
  • Certain banks also permit holding of both equity and debt securities in a single account.
  • A Demat account holder can buy or sell any amount of shares.


(b) Elaborate on the factors affecting recruitment.
Some of the factors that affect recruitment are:

  • Size of the Organisation: Bigger organisations find recruitment less problematic than organisations that are smaller in size.
  • Recruiting Policy: Most organisations prefer recruiting through internal sources, because own employees know the organisation and they can well fit into the organisation’s culture.
  • Nature of Post: The recruitment process varies according to type of personnel to be recruited. For example, recruitment process of a bank officer will differ from that of an IPS officer.
  • Demographic factors: Like the details of possible employees- age, religion, literacy level, gender, occupation, economic status, etc.
  • Unemployment rate: If the unemployment rate is high, the number of applicants will be more, making it easy for the recruiters to select from a wide range.
  • Labour Laws: These cover working conditions, compensation, retirement benefits, and safety and health of employees in industrial undertakings.
  • Competitors: Time to time the organisations have to change their recruitment policies and manuals according to the policies being followed by the competitors.

Question 44.
(a) Explain the benefits of training.
(i) Benefits to the Organisation:

  • It improves the skill of employees and increase the productivity.
  • It reduces wastages of materials and idle time.
  • It minimizes the time for supervision.
  • It reduces the frequent accidents at workplace and consequent payment of compensation.

(ii) Benefits to the Employees:

  • It increases the knowledge, skill of the employees.
  • It enables him to gain promotion in shorter time.
  • It improves the employees productivity.
  • Employees get higher earnings through incentives and rewards.

(iii) Benefits of Customer:

  • Customers get better quality of product and service.
  • Customers get innovative products or value added or feature rich products.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium


(b) Narrate the Elements of Marketing mix.
Marketing mix means a marketing programme that is offered by a firm for the satisfaction of human wants. There are four Elements of Marketing mix:

  • Product: A Product is the main element of marketing. Without a product, there can be no marketing.
  • Price: Price is the value of a product expressed in monetary terms. It is the amount Charged for the product.
  • Place (Physical Distribution): An excellent quality product, with a good price, will be waste, if it is not transferred from the production place to consumption place.
  • Promotion: An excellent product with competitive price cannot achieve a desired success and acceptance in market, with special features are conveyed to the consumers.

Question 45.
(a) What are the objectives of Consumer Protection Act, 1986?
The Central Government enacted a comprehensive law called the Consumer Protection Act in 1986. This Act came into force with effect from 15.04.1987. It is in short, called as ‘COPRA’.

  • Consumer protection Act protects the interests of the consumers.
  • This Act provides safeguard against defective goods and deficient services, unfair trade practices.
  • It also gives settlement of consumer disputes.
  • It is applicable to public sector, financial and co-operative enterprises.


(b) Classify goods under the Sale of Goods Act.
The term goods mean every kind of movable property other than actionable claim and money.
The goods are classified as follows:
(1) Existing Goods- These goods are owned or possessed by the seller at the time of contract of sale. Existing goods may again be divided as:

  • Specific Goods- It denotes goods identified and agreed upon at the time of contract of sale.
  • Ascertained Goods- The term ‘ascertained goods’ is also used as similar in meaning to specific goods.
  • Unascertained Goods- These are goods which are not identified and agreed upon at the time of contract of sale.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

(2) Future Goods- These are goods which a seller does not possess at the time of contract of
sale, but which will be manufactured or produced or acquired by him after entering into the contract.
(3) Contingent Goods- These are the goods, the acquisition of which by the seller depends upon a contingency (an event which may or may not happen).

Question 46.
(a) What are the requisites for a valid endorsement?
If an endorsement is to be valid, it must possess the following requisites:

  • Endorsement is to be made on the face of the instrument or on its back.
  • When there is no space for making further endorsements a piece of paper can be attached
  • Endorsement for only a part of the amount of the instrument is invalid.
  • Endorsement is complete only when delivery of the instrument is made.
  • Signing in block letters does not constitute regular endorsement.
  • If the payee is an illiterate person, he can endorse it by affixing his thumb impression on the instrument.


(b) Distinguish between the rural and urban entrepreneur.

S. No. Rural Entrepreneur Urban Entrepreneur
1. It refers to the person who starts business in rural areas. It refers to the person who commences business in urban areas.
2. These entrepreneurs start doing business in the villages and small towns. They will do their business in state capital, towns, district headquarters, municipalities, etc.
3. They may be agricultural and trading entrepreneurs. They may be industrial or corporate entrepreneur.
4: The availability of material and labour is easy. So the cost of operation tends to be low. The availability of material and labour may be difficult. So the cost of operation may be high.

Tamil Nadu 12th Commerce Model Question Paper 5 English Medium

Question 47.
(a) What formalities need to be fulfilled for a companies having share capital to commence business?
A public limited company having its share capital has to pass through two more stages. One of them is capital subscription, steps to be taken at this stage are listed below:

  • The fulfilling formalities to raise necessary capital.
  • Following the SEBI guidelines in this regard.
  • Issuing prospectus.
  • Appointing official banker of the company for receiving application from the investors,
  • Passing resolution for making allotments by director.
  • Despatch allotment letters to allottees.
  • Filing allotment returns with the Registrar.
  • Issuing share certificates in exchange for their allotment letter.
  • Ensuring collection of minimum subscription.


(b) List the disqualification of a directors.
Disqualifications of a Director: Section 164 of Companies Act, 2013, has mentioned the disqualification as follows: A person shall not be capable of being appointed director of a company, if the director is

  • Of unsound mind
  • An undercharged insolvent
  • Has been convicted by a court for any offence
  • Has not paid any call in respect of shares of the company held by him
  • An order disqualifying him for appointment as director has been passed by a court
  • He has not got the Director Identification Number.

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