Model Question Papers...Concentrating only on the book-back questions and/or previous year...

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Model Question PapersCommerce

Time : 2½ hours

(Sample Question Papers only for Practice)

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Kind Attention to the Students � From this year onwards, blue print system has been abolished.

� Please note that questions will be framed from IN-TEXT portions ALSO.

� Approximately 20% of the questions will be asked from IN-TEXT portions.

� These questions will be based on Reasoning and Understanding of the lessons.

� Further, Creative and Higher Order Thinking Skills questions will also be asked. It requires the students to clearly understand the lessons. So the students have to think and answer such questions.

� It is instructed that henceforth if any questions are asked from ‘out of syllabus’, grace marks will not be given.

� Term Test, Revision Test and Model Exam will be conducted based on the above pattern only.

� Concentrating only on the book-back questions and/or previous year questions, henceforth, may not ensure to score 100% marks.

� Also note that the answers must be written either in blue ink or in black ink. Avoid using both the colour inks to answer the questions.

� For MCQs, the answers should be written in full. Simply writing (a) or (b) etc. will not get full marks. You have to write (a) or (b) etc., along with the answer given in the options.

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11thSTD.

Time : 2.30 Hours Commerce Marks : 90

Sura’S Model QueStion PaPer - 1

PART - II. Choose the correct answer. 20 × 1 = 20

Answer all the questions.

1. Trade and Commerce was common to _________ Dynasty.(a) Pallava (b) Chola (c) Pandiya (d) Chera

2. Auxiliaries to trade is also called as(a) Trade (b) Advertisement (c) Warehousing (d) Aids to Trade

3. ‘Only the male members in the family get the right of inheritance by birth’ as _________ .(a) Hindu law (b) Mitakshara Law (c) Dayabhaga law (d) None of these

4. The Board of directors of a company is elected by ________(a) Creditors (b) Debtors (c) Debenture holders (d) Share holders (members)

5. Coca-Cola company is an example of ________.(a) MNC (b) Government company(c) Joint Venture (d) Public company

6. Which bank has the power to issue Bank notes?(a) Central Bank (b) Commercial Bank(c) Co-operative Bank (d) Foreign Bank

7. Minimum how much amount can be transferred through RTGS?(a) Any Amount (b) Rs. 50,000 (c) Rs. 2 Lakhs (d) Rs. 5 Lakhs

8. The document which authorizes to deliver the goods either in part of full is called __________ .(a) Warehouse warrant (b) Dock receipt (c) Dock warrant (d) None of these

9. Which of the following is a type of marine insurance?(a) Money back (b) Mediclaim (c) Hull insurance (d) Corgo insurance

10. Socially responsible business provides goods at (a) High price (b) Low price (c) Reasonable price (d) Moderate price

11. Internal sources of Capital are those that are __________ .(a) generated through outsiders such as suppliers (b) generated through loans from commercial banks(c) generated through issue of shares (d) generated within the business

12. Self help groups convert the savings into a common fund known as __________ .(a) Common Fund (b) Groups corpus Fund(c) Group Fund (d) None of the above

13. Small shops which deal in a particular line of products are called as __________ .(a) Market Traders (b) Single line stores (c) Sugar Market (d) Street stalls

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Sura’s XI Std - Commerce - Sample Question Papers �� 237

14. WTO was established on (a) 1-1-1996 (b) 1-1-1997 (c) 1-1-1995 (d) 1-1-1994

15. Void agreement signifies(a) Agreement illegal in nature (b) Agreement not enforceable by law(c) Agreement violating legal procedure (d) Agreement against public policy

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

17. What kind of tax is GST is?(a) Direct Tax (b) Indirect Tax(c) Dependence on the type of goods and services (d) All business organisations

18. EXIM Bank was established in the year(a) 1952 (b) 1962 (c) 1972 (d) 1982

19. Which one of the following is not the advantages of international business?(a) Economic development (b) Economic dependence(c) Price equalisation (d) Higher standard of living

20. A debtor owes several distinct debts to the same creditor and he has a right to instruct his creditor to which particular debts is to be adjusted is(a) Application of payments where the debt to be discharged is indicated(b) Application of payments where he debt to be discharged is not indicated(c) Application of payment where neither party appropriates.(d) None of these

PART - II

Answer any 7 questions in which question No.21 is compulsory. 7 × 2 = 14

21. What do you mean by Business? 22. What are the Non-corporate enterprises?23. What are Foreign banks? 24. What is a Charter Party?25. Name any two internal sources of Business Finance.26. Give some examples for Micro Enterprises. 27. Mention any two benefits of Vending Machine.28. What is GATT? 29. Who is an Agent?30. What is Income Tax?

PART - IIIAnswer any 7 questions in which question No.31 is compulsory. 7 × 3 = 21

31. Explain the meaning of the term “Vanigam”.32. Write any 3 features of HUF.

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238 �� Sura’s XI Std - Commerce - Sample Question Papers

33. List the names of some enterprises under the public sector and classify them. 34. What is E-Banking?35. What is Fire Insurance? What are its features.36. Why is Ethics necessary in Business?37. What is the role and significance of MSMEs in Indian Economy?38. What are the features of Entrepot Trade?39. What do you mean by Revocation?40. Write any three demerits of GST.

PART - IV

Answer all the questions. (7 × 5 = 35)

41. State the constraints in barter system.(or)

Explain the following types of Companies. (i) On the basis of incorporation (ii) On the basis Membership

42. Discuss the various Primary functions performed by the Commercial banks.(or)

Discuss the advantages of transport.43. What are the Features of outsourcing?

(or) Explain the different key elements of business ethics.44. Distinguish between GDR and VDR?

(or) Explain briefly the different types of Foreign trade.45. Explain the types of Small Fixed Shop Retailers.

(or) Distinguish between Bill of Lading and Charter party,46. Write down the structure of Balance of Payments.

(or) Discuss the different types of damages awarded to the injured party.47. Define Tax. Explain the term direct tax and indirect tax with an example.

(or) What are the advantages and disadvantages of Departmental undertakings?

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ANSWERS

PART - I1. (c) Pandiya 11. (d) generated within the business

2. (d) Aids to Trade 12. (b) Groups corpus Fund

3. (b) Mitakshara Law 13. (b) Single line stores

4. (d) Share holders (members) 14. (c) 1-1-1995

5. (a) MNC 15. (b) Agreement not enforceable by law

6. (a) Central Bank 16. (a) Damage

7. (c) Rs. 2 Lakhs 17. (b) Indirect Tax

8. (a) Warehouse warrant 18. (d) 1982

9. (d) Corgo insurance 19. (b) Economic dependence

10. (c) Reasonable price 20. (a) Application of payments where the debt to be discharged is indicated

PART - II21. (i) Business refers to those economic activities, which are connected with the production, purchase and

sale of goods or supply of services with the main object of earning profit. (ii) For Example : Farming, Manufacturing, Fishing, etc.

22. (i) In a non-corporate form, the enterprise and its owners are considered as having the same entity i.e., the ownership and business are not separated.

(ii) Non-corporate business may be organised either as a sole proprietorship or as a partnership or as a joint hindu family business.

23. (i) Banks which have registered office in a Foreign country and branches in India are called Foreign banks. (ii) These banks open their offices mostly in big cities and port towns only. (iii) Examples : (1) Bank of America - The USA (2) Barclays Bank - The UK (3) Deutsche Bank - German24. (i) When large quantity of goods are to be consigned, the whole or part of the Ship has to be hired.

(ii) The document through which this hiring contract is made is called “Charter Party”.25. This includes all those sources generated from within the business enterprises. For instance, retained earnings,

collection from receivables (trade debtors and bills receivable) surplus from disposal of old Assets and so on.26. Micro Enterprises are engaged in low scale activities such as clay plot making, fruits and vegetable vendors,

transports (three wheeler tempos and autos) Cottage Industries, Small Industries, Handloom, handicraft works, etc.

27. (i) Any Time Shopping : Vending machines provide the facility of 24 × 7 shopping at all the major locations.

(ii) Fast Service : These machines provide quick service to the customers.

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28. (i) The General Agreement of Trade and Tariffs was a contractual agreement among the member countries. (ii) It was signed in 1947, and came into force on 1st January, 1948. The GATT was launched at Geneva

in 1948 by 22 countries including India. (iii) The GATT comprised a Trade pact among the member countries.29. (i) An Agent is defined as a person employed to do any act for another or to represent another in dealings

with the third person. (ii) According to para 2 of section 40, the promisor may employ a competent person to perform the

promise.30. Income tax is a direct tax under which tax is calculated on the income, gains or profits earned by a person

such as individuals and other artificial entities (a partnership, company, etc.)

PART - III31. (i) The word “Vanigam” or “Vanipam” would have had a Dravidian origin. (ii) The early Tamils produced their products and goods in their lands and bartered their surplus and that

is how trade came into existence. (iii) The word “Vanigam” has been widely used in sangam literature like Purananuru and Thirukkural. (iv) The Tamil Brahmi inscriptions from Alagarmalai, pugalur, mungulam and SriLanka illustrate the fact

that trade in gold, oil, plough, cloth, etc. was conducted during the early age.32. (i) Governed by Hindu Law : The business of the Joint Hindu Family is controlled and managed under the Hindu law. (ii) Management : The members of the family have full faith and confidence in Karta. Only Karta is entitled to deal

outsiders. (iii) Membership by Birth : The membership of the family can be acquired only by birth. Membership requires no consent or

agreement.33. Some enterprises with the public sector are (i) Indian Railways - Departmental undertaking (ii) Indian Post and Telegraph - Departmental undertaking (iii) Steel authority of India Limited (SAIL) - Government company (iv) Bharat Heavy Electricals Limited (BHEL) - Government company (v) Life Insurance corporation (LIC) of India - Statutory corporation (vi) State Trading corporation - Statutory corporation34. (i) Banking through Internet is called E-Internet Banking. It can also be called as Electronic Banking or

E-Banking. (ii) Internet Banking refers to performing Banking operations through Internet by using Computers and

Mobile phone. (iii) This can be done by a Customer from home or office or any part of the world and all 24 hours of 7

days. (iv) Money Banks have their own websites. They offer banking facilities such as Account Enquiry, request

for statement, and the cheque books, etc. on the net.35. (i) Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to

make good any loss or damage caused by a fire during a specified period upto the amount specified in the policy.

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(ii) A claim for loss by fire must satisfy the following two conditions : (1) There must be actual loss; and (2) Fire must be accidental and non-intentional. (iii) The Essential elements of Fire Insurance Contract are : (1) The insured must have insurable interest both at the time of insurance and at the time of loss. (2) The contract is based on utmost good faith. (3) It is based on the principle of strict indemnity. (4) Fire must be the proximate cause of damage or loss.

36. (i) Business is a part of the Society. It functions in the society. So, it should be guided by the ethical or moral norms which the society wants the Business to observe.

(ii) In other words, every Business should be guided by the Business ethics (i.e. moral principles which are considered right by the society).

(iii) Business Ethics are of much importance to Business. The importance of Business Ethics are : (1) They determine the Objectives of Business (2) They law down the norms of behaviour for the Business. (3) By laying down the code of conduct, they guide the Businessmen in their Business Activities. (4) Business Ethics acts as a tool for evaluating the business practices of a concern. (5) Business Ethics will increase the credibility of the enterprise in the eyes of the public.37. (i) Employment Potential : MSMEs generate more employment opportunities than large business

concerns. They are mostly labour intensive, thus they provide more employment opportunities to a larger number of people in India.

(ii) Low Production Cost : MSMEs do not require skilled labourers or professionals to run the organisation. It employs cheap labour and thus minimizes the overhead.

(iii) Low Investment : MSMEs do not require a huge capital to start the unit. It can employ locally available resources within the reach of the owner. They help to perfect and promote traditional family skills and handicrafts. These industries facilitate the growth of local entrepreneurs and self employed professionals in small towns and villages.

38. The following are the special feature of Entrepot Trade. (i) Import duty is not levied on such goods (ii) These goods are reprocessed and repacked for re-export. (iii) Such goods are kept in the bounded warehouse till they are re-exported.39. Revocation of an offer means withdrawal of his offer by the offerer. An offer can be revoked :

(i) Expressly - by words spoken or written.(ii) Impliedly - by his conduct an offer may be revoked at any time before the offeree puts his acceptance in

the course of transmission so as to be out of his power.(iii) The communication of revocation (of an offer or an acceptance) is complete.

(1) as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it.

(2) As against the person to whom it is made, when it comes to his knowledge.(3) For Example : ‘A’ proposes, by letter to sell a house to ‘B’ at a certain price. ‘B’ accepts the

proposal by letter sent by post. A revokes his proposal by telegram.(4) The revocation is complete as against ‘A’. When the telegram is despatched. It is complete as

against ‘B’ when ‘B’ receives it.(5) If ‘B’ revokes his acceptance by telegram, B’s revocation is complete as against ‘B’ when the

telegram is despatched and as against ‘A’. When it reaches him.

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40. (i) Several Economists says that GST in Indian would impact negatively on the real estate market. (ii) It would add upto 8 percent to the cost of new homes and reduce demand by about 12 percent. (iii) Another criticism is that CGST, SGST are nothing but new names for Central Excise / Service Tax, VAT,

and CST. (iv) Hence, there is no major reduction in the number of tax payers. (v) A number of retail products currently have only four percent tax on them. After GST garments and

clothes, could become more expensive. (iv) The aviation industry would be affected. Service taxes on air fares currently range from six to nine percent

with GST, this rate will surpass fifteen percent and effectively double the tax rate.

PART - IV41. Barter system imposes certain constraints in the smooth flow of trade as explained below.

(i) Lack of double coincidence of wants : (1) Unless two persons who have surplus have the demand for the goods possessed by each other,

barter could not materialize. (2) For instance ‘A’ is having a surplus of groundnut and ‘B’ is possessing rice in surplus. (3) If this “coincidence of wants” does not exist, Barter cannot take place.

(ii) Non-existence of common measure of value : (1) Barter system could not determine the value of commodities to be exchanged as they lacked

commonly acceptable measures to evaluate each and every commodity. (2) It was difficult to compare the values of all articles in the absence of an acceptable medium of

exchange. (iii) Lack of direct contact between producer and consumers

(1) It was not possible for buyers and sellers to meet face to face in many contexts for exchanging the commodities for commodities.

(2) This hindered the process of barter in all practical sense. (iv) Lack of surplus stock : Absence of surplus stock was one of the impediments in barter system. If the buyers and sellers do not

have surplus then no barter was possible.(or)

(i) On the basis of incorporation : Companies of this kind are three types.

(1) Chartered Companies :(a) Chartered Companies are established by the King or Queen of a Country.(b) Powers and privileges of Chartered Company are specified in the Charter.(c) Examples : East India Company and Bank of England.

(2) Statutory Companies :(a) Companies are established by a special Act made in parliament / state Assembly.(b) Constitution of company is specified in the Memorandum of Association.(c) Rules relating to day-to-day Management of Statutory Companies are specified in the Articles

of Association.(d) Examples : Reserve Bank of India, Life Insurance Corporation of India.

(3) AssociationNotforProfit: According to Section 25, the Central Government may, by license, grant that an Association may

be registered as a Company with limited liability, without using the words ‘Limited’ or ‘Private Limited’ as part of its name.

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(ii) On the basis of Membership :(1) Private Company :

(a) Private limited Company is a company which has a minimum paid up capital of rupees one lakh or such higher paid up Capital as may be prescribed.

(b) Maximum 200 persons can become shareholders in a Private Company.(2) Public Company :

(a) Public Company means a Company which is not a Private Company.(b) Minimum number of person is seven and there is no limit to the maximum number of share

holders.42. The Primary functions of Banks are : (i) Accepting Deposits (ii) Granting of Loans and Advances The main types of Deposits received by the Commercial Banks are : (1) Savings Bank Deposits (2) Current Deposits (3) Fixed Deposits (4) Recurring Deposits The Lending of Funds includes :

(i) Accepting Deposits : (1) Bank accepts deposit from the public. These deposits carry interest. (2) It also provides safety for their money. Bank accepts various types of Deposits. They are as

follows : (a) Demand Deposits :

These deposits are repayable on demand. It includes savings deposits and current deposits. (b) Time Deposits :

They include Fixed Deposits and Recurring Deposits are payable after certain period. (1) Savings Deposits :

�� Any General public can deposit their money in this account. This account can be opened in one individual’s name or more than one name.

�� Business firms are not permitted to open savings account. The rate of interest allowed on this deposit is lower than fixed deposits.

(2) Current Deposits :�� This account is suitable for business institutions. Individuals also can open this account.�� A higher minimum balance should be kept in this account. No interest will be allowed for

this account. �� Overdraft facility also available to current account customers. There is no limitation for

number of deposits or withdrawals. (3) Fixed Deposits :

�� Certain amount is deposited for a fixed period at a fixed rate of interest. Rate of Interest is higher than the Savings Account. Fixed Deposit Receipt (FDR) is given to the Depositor.

�� On the date of maturity the principal amount along with Interest for the Fixed period is paid.

�� A Customer can obtain loan by depositing FDR. Fixed Deposit period can be 1 month to 10 years. It is called as term deposits.

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(4) Recurring Deposits :�� Certain sum is deposited every month for one year or five years or the agreed period.�� Interest is more than savings deposits. At the end of the period the deposited amounts

along with interest is returned to the customer.�� Any institution can open RD account. Minors, or students can also open this account.

(ii) Granting of Loans and Advances : (a) This is the Second Primary functions of a commercial bank. It is lending money in order to earn

interest income. (b) Bank provides specific sum as loan which are repayable along with interest. (c) Advances are credit facilities provided for short period to the business. They are explained

below : (1) Overdraft :

�� It is a credit facility extended mostly to current account holders. It is an arrangement between the banker and the customer.

�� The customers are allowed to overdraw upto a certain limit usually for 3 months period. It is an unsecured loan. It is payable on demand.

(2) Cash Credit :�� It is a secured credit facility given mostly to business institutions. Stock in hand, raw

materials, other tangible assets, etc. are provided as collateral security.�� A certain sum is allowed as credit for a short period. Interest is payable on the actual

amount withdrawn and not on the entire loan amount. It is repayable on demand. (3) Discounting of Bills :

�� Business customers approach banks to Discount the commercial bills of exchanges and provide money. It is a short term credit instrument.

�� Bank deducts the discount for the period mentioned in the Bill, and release the Balance amount to the Traders. It is a form unsecured Credit.

(4) Loans :�� Short term and Medium term loans are provided by commercial banks against eligible

collateral securities to Business concerns. �� It is a definite sum of money lent for a definite period. It is repayable in one lump sum or

in instalments. Interest is payable on the entire loan amount.(or)

(i) It increases theefficiencyofproduction:(1) The object of production is consumption. Effective transport system creates time and place utilities

and thereby influences the demand for goods and the value of goods.(2) Thus, transport makes production efficient and purposeful.

(ii) It stimulates wants by increasing quantity and variety of consumer goods :(1) It helps in getting commodities, which cannot be had or produced in a region due to unsuitable

natural conditions.(2) Without adequate and effective transport, goods cannot be had either in the quantities or varieties

required in a complex economy.(iii) It develops and expands the market :

(1) The primary function of transport is to enable the physical distribution of goods at global level.(2) The distribution of goods must take place easily, economically and speedily.(3) It provides the chance of expanding national land international market.

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(iv) It helps in price stability by distributing goods all over the country :(1) Transport helps to reduce variations in the price of goods not only between regions of a country but

also to a considerable extent between nations.(2) It thus imparts place and time utilities to goods.

(v) It aids to economic growth : The movement of raw materials, fuel, labour and finished products and the mobility of capital and

technical know-how, transport playing a remarkable role in the growth of all industries from agriculture to manufacturing.

(vi) It helps in specialization and mass production: Specialization means the division of complex process of production into a number of separate processes

so that each person or group specializes in each person or group specialises in each process. It has been extended to international level too.

(vii) It encourages innovations in product production and designing : It provides plenty of opportunities to the producers to produce their product in innovative and creative

way, to catch up the wider market and reap more profit.43. (i) Transferring Non-core activities to outsiders: Companies can outsource those non-core activities functions like maintenance, housekeeping, gardening,

etc. to outsiders, depending upon the nature of the business. The activities are identified as core or non-core activities.

(ii) Outsourcing Involves Contracting : As the companies start outsourcing their activities focusing on their main business, the outside agencies

enter into an agreement with the company to perform the routine activities on a contractual basis. (iii)OperationalEfficiencythroughOutsourcing: Companies specialize in their business system as the time available at their disposal can be utilized for

the core activities leading to efficiency improving quality of the product. (iv) Improved Customers Satisfaction : (1) The number of customers can be increased through timely delivery and high quality services. (2) Outsourcing helps in customer satisfaction and results in repetitive purchase of the same product. (v) Cost Reduction (1) The only way to survive and earn profit is through global competitiveness by fixing a competitive

price. (2) Division of labour and specialization along with good quality product reduces the cost. For Example : Outsourcing of research and development, manufacturing, software development

etc.(or)

Some of the basic elements of Business Ethics while running a Business Enterprises are :(i) Top Management Commitment :

(1) Top Management has a very important role to guide the entire organisations towards Ethical behaviour.

(2) The top level personnel in any organisaiton should work openly and strongly committed towards ethical conducts and guide people working at middle and low level to follow ethical behaviour.

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(ii) Publication of a “Code” :(1) Generally organisations formulate their own Ethical codes for the conduct of the Enterprise, it

would followed by the employees of the organisation.(2) The organisation principles are defined in the written document called code.(3) The code of conduct covers various areas such as health and safety in the work place, fair dealing in

Selling and Marketing activities, Ethical practices in the Business, etc.(iii) Establishment of Compliance Mechanism :

(1) To make sure that actual decisions match with a firms’ Ethical standards, suitable mechanism should be established.

(2) Any organisation following Ethical codes in training, recruitment, selection, etc., is sure to be profitable.

(3) The organisation must provide for an environment where the employees are to free to report about the matters of unethical behaviour.

(iv) Involving Employees at all levels :(1) It is the Employees at different levels who implement ethics policies to make Ethical Business a

reality.(2) Therefore, their involvement in Ethics programmes becomes a must. For Example : Small group of employees can be formed to discuss the important Ethics policies

of firms and examine attitudes of employees towards these policies.(v) Measuring Results :

(1) The orgnisations from time to time keep a check on Ethical practice followed. Although it is difficult to accurately measure the end results of Ethics programmes, the firms can certainly Audit to monitor compliance with Ethical Standards.

(2) The top management team and other Employees should then discuss the results for further course of action.

44. Sl.No.

Basis for comparison

GDR (Global Depository Receipts)

ADR (American Depository Receipts)

1. Denomination It is denominated in any freely convertible currency.

It is denominated only in US dollars.

2. To whom it is issued

It is issued to investors in one or more markets simultaneously.

It is issued only to investors, who are resident of the US.

3. Listed in It is listed in Non-US stock exchange such as London stock Exchange or Luxemburg Stock Exchange.

It is listed in American Stock Exchange.

4. Approval GDR issues does not require Foreign regulatory clearances.

ADR issues require approval from Exchange commission (SEC) of US.

5. Mode of Expression

GDRs are normally co-related to equity shares of the issuing company expressed in whole numbers.

In many cases ADRs co-related to equity shares of the company are expressed as a fraction.

6. Negotiation All over the world In America only.

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(or) (i) Meaning of Foreign Trade :

(1) Foreign Trade is a Trade between one country with another country. It is a trade between the seller of one country with the buyer of another country.

(2) It involves the exchange of goods and services between two countries. For Example : Petroleum products of Gulf countries are sold in India.

(ii) Types of Foreign Trade : The Foreign trade is classified into three categories, namely :

(1) Import Trade (2) Export Trade(3) Entrepot Trade(1) Import Trade : Import trade means buying goods from a Foreign Country for Domestic use. For Example : India Imports petroleum products from Saudi Arabia and also India Imports

Machinery, Equipment, Materials, etc. from various other countries.(2) Export Trade : Export trade means the sale of domestic goods to Foreign countries. When goods

are sold to a trader in any Foreign Country, it is known as Export trade. For Example :

�� Export of Iron ore to Japan.�� Selling of Tea to England�� Export of Jasmine Flowers to Singapore.

(3) Entrepot Trade :�� If the goods are Imported from one Country with the purpose of re-exporting to another country

it is called Entrepot trade.�� It also means that Importing of goods from one country and exporting the same to Foreign

Country. It is also known as ‘Re-Export Trade’.�� Import duties are not levied on these goods. The Important centres for Entrepot trade are

London, Hongkong, Amsterdam, Dubai and Singapore.�� For Example : Indian Diamond merchants in Surat Import uncut Diamonds from South Africa,

they cut and polish the Diamonds in their units in India and re-export them to The International Diamond Market in Amsterdam.

45. (i) Street Stalls : These small shop-keepers are commonly found at street crossings or other busy street corners to attract

floating customers and deal in cheap variety of goods like hosiery products, toys, soft drinks, etc. They set their supplies from local Suppliers and Wholesalers.

(ii) General Stores :(1) 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 customer residing in nearby localities.

(2) They remain open for long hours at convenient timings and often provide credit facilities to their regular customers.

For Example : A provision store deals in grocery, bread, butter, tooth paste, soaps, Washing Powder, Soft drinks, confectionery, stationery, cosmetics, etc.

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(iii) Single line stores :(1) Single line stores are small shops which deal in a particular line of products such as garments,

stationery, textiles, medicines, shoes, etc.(2) They are generally situated in market places and deal in a variety of goods in that line of product.

(iv) Speciality stores :(1) Speciality stores deal in a particular type of product under one product line only.(2) For Example : Sweet shops specialised in Tirunelveli Halwa, Bengali Sweets, etc.

(v) Seconds’ Shops : These shops deal wiht second hand goods or used articles in a low price such as books, furniture,

utensils, Clothes, automobiles, etc. and also new defective goods.(or)

Sl.No. Basis Domestic

BusinessInternational

Business

1. Meaning This represents a document acknowledging the receipt of goods on board for carrying them over to specified port of destination

It refers to an agreement to hire a whole or major part of ship when the goods take exported is heavy.

2. Transferable It can be transferred to third party by endorsement and delivery.

It cannot be transferred to their party.

3. Loan Loan can be raised against it. Loan cannot be raised it.

4. Crew Master and crew remain the agent of the ship owner

Master and crew become the agent of exporter for a temporary period.

5. Lease It is not a lease of ship It is a lease of ship.

46. The balance of payments consists of four components namely, Current Account, Capital Account, Unilateral Payments Account, Official Reserves Asset Account.(i) Current Account : The Current Account consists of two major items, namely, (1) Merchandise Exports; and (2) Invisible Exports and Imports.(ii) Capital Account : The Capital Account consists of three components : (1) Private Capital (2) Banking Capital (3) Official Capital(iii) Unilateral Transfer Account : Unilateral transfer is another term for gifts, and includes private remittances, government grants, etc.(iv) OfficialReservesAccount: Official Reserves represents the holdings by the Government or official agencies.

(or) There are four types of damages which can be claimed by the aggrieved party.

(i) Ordinary damages(ii) Special damages

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(iii) Vindictive or Exemplary damages and(iv) Nominal damages

(i) Ordinary or General damages :(1) Damages that arise in the ordinary course of events from the breach of contract are called ordinary

or general damages.(2) These include damages, which are the natural and probable consequences of the breach of the

contract.(3) For Example : A contracted to sell and deliver B 50 bags of rice at ` 1400 per bag and price to be

paid at the time of delivery.(4) The price is raised to ̀ 1500 per bag and A refused to sell the rice. B can claim damages at the rate of

` 100 per bag.(ii) Special damages :

(1) Special damages are those damages that are payable for the loss arising on account of some special or unusual circumstances.

(2) That is, they are not due to the natural and probable consequences of the breach of the contract.(3) For Example : A entered into a contract with B, to supply B 500 tons of iron at ` 100 a ton, to be

delivered at a stated time, and at the same time contracted with C for the purchase of 500 tons of iron at ` 80 a ton, telling C that he does so far the purpose of performing his contract with B.

(4) C failed to perform his contract with A, who cannot procure the iron and B in consequence rescinded the contract.

(5) C must pay to A ` 10,000 being the profit which A would have made by the performance of his contract with B.

(iii) Vindictive or Exemplary damages :(1) These damages are awarded against the party who has committed a breach of the contract with the

object of punishing the erring as defaulting party and to compensate the aggrieved party.(2) Generally these damages are awarded in case of action on lost or breach of promise.(3) Example breach of contract to marry, dishonour of customers’ cheque by the bank without any

proper reason.(iv) Nominal damages :

(1) Nominal damages are awarded to the aggrieved party when there is only technical violation of the legal rights.

(2) Here no substantial loss is caused. These damages are very small in amount.47. Meaning of Tax : (i) Tax is a compulsory contribution to state revenue by the Government. It is levied on the income or profits

from business of individuals and institutions. (ii) It may be added to the price of goods, services or transactions. Tax is the basic source of revenue to the

Government. (iii) This revenue is utilised for the expenses of civil administration, internal and external security, building

infrastructure, etc. Types of Taxes : There are two types of taxes - directs and indirect taxes. (i) Direct Tax : (1) If a tax is levied on the income or wealth of a person and is paid by that person (or his office) directly

to the Government it is called as direct tax. (2) Examples : (a) Income Tax (b) Wealth Tax (c) Capital gain Tax (d) Securities Transaction Tax (e) Fringe

benefits Tax (f) Banking Cash Transaction Tax, Etc.

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(ii) Indirect Tax : (1) Indirect Tax is levied on the goods or services. It is collected from the buyers and is paid by the seller

to the Government since it is indirectly imposed on the It is called indirect tax. (2) Examples : GST, Excise Duty, Customs Duty

(or) (i) Advantages :

Following are the advantages of the departmental undertaking.(1) Easy Formation : It is easy to set up a departmental undertaking.(2) Direct and Control of Parliament or State Legislature : The departmental undertaking is directly responsible to the Parliament or the State legislature through

its overall head i.e. the minister concerned.(3) Secrecy Maintained : Strategic industries like defense and atomic power cannot be better managed other than government

departments.(4) Lesser Burden of Tax on Public : Earnings of departmental undertaking are entirely paid into Government treasury, resulting in lesser tax

burden on the public.(5) Instrument of Social Change : Government can promote economic and social justice through departmental undertakings.

(ii) Disadvantages : Following are the major limitations of the departmental undertaking.

(1) Red-tapism : There is too much of procedures which results in delay. Commercial orgnisation cannot afford delay in

taking decisions.(2) Incidence of Additional Taxation : Losses incurred by a departmental enterprise are met out of the treasury.(3) Lack of Competition : Civil Servants are given control of these undertakings who may not have business outlook or commercial

experience.(4) Casual Approach to Work : As officers of a departmental undertaking are subject to frequent transfers; they develop a sense of

casual approach to work.(5) Government Interference : There is an excessive government interference and control in department organisation. These

undertakings are not given freedom to decide their own policies.

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11thSTD.

Time : 2.30 Hours Commerce Marks : 90

Sura’S Model QueStion PaPer - 2

PART - II. Choose the correct answer. 20 × 1 = 20

Answer all the questions.

1. Who wrote “Arthasasthra”?(a) Kautilya (b) Chanakiya (c) Thiruvalluvar (d) Elangovadigal

2. Production which involves several stages for manufacturing finished product is known as(a) Analytical Industry (b) Synthetic Industry(c) Processing Industry (d) None of the above

3. A partnership is formed by _________ .(a) agreement (b) relationship among persons(c) the direction of government (d) friendship

4. Table A of the Companies Act is a ________(a) Model minutes book (b) Model form of Balance Sheet(c) Model of AOA (d) Model of MOA

5. Centralised control in MNC’s implies control exercised by(a) Branches (b) Subsidiaries (c) Headquarters (d) Parliament

6. The Reserve Bank of India commenced its operations from April 1,(a) 1936 (b) 1935 (c) 1934 (d) 1933

7. In which kind of account, it is compulsory to deposit certain amount at certain time?(a) Savings Deposit (b) Fixed Deposit (c) Current Deposit (d) Recurring Deposit

8. __________ can be given as collateral security for getting financial assistance from bank.(a) Dock warrant (b) Warehouse Receipt(c) Dock Receipt (d) Warehouse warrant

9. The basic principle of insurance is _________.(a) Insurable Interest (b) Co-operation (c) Subrogation (d) Proximate cause

10. Assuming Social Responsibility of business helps the enterprise in __________ .(a) Increase Profit (b) Decrease Profit (c) Sustainability (d) Equilibrium

11. Public deposits are the deposits that are raised directly from __________ .(a) The public (b) The directors (c) The auditors (d) The owners

12. MSMED Act was enacted in the year(a) 2004 (b) 2007 (c) 2006 (d) 2008

[251]

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13. Retailers deal in __________ quantity of goods.(a) Small (b) Large (c) Medium (d) Limited

14. World bank is located at(a) Washington DC (b) New York (c) Tokyo (d) HongKong

15. Acceptance to be valid must(a) be absolute (b) be unqualified(c) both be absolute and unqualified (d) be conditional

16. Any agreement which becomes impossible to perform under various circumstances(a) Voidable (b) Void (c) Valid (d) None of these

17. What kind of tax is GST is?(a) Direct Tax (b) Indirect Tax(c) Dependence on the type of goods and services (d) All business organisations

18. Which one of the following document is not required in connection with an import trade?(a) Bill of entry (b) Bill of sight (c) Mate’s receipt (d) Letter of credit

19. The importance centre for entrepot(a) London (b) Singapore (c) Hong Kong (d) All the above

20. Offer to performance is also know as(a) Tender (b) Actual performance(c) Promise (d) Agent

PART - II

Answer any 7 questions in which question No.21 is compulsory. 7 × 2 = 14

21. What is meant by Barter System?22. Define Commerce.23. Give two examples for each of the following:

(i) Private sector enterprises(ii) Global enterprises

24. What do you mean by ATM?25. What do you mean by surrender value?26. What are MNCs?27. What is Self Help Group?.28. Define Wholesaler. 29. Who can enter into a contract?30. Define the term person.

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PART - IIIAnswer any 7 questions in which question No.31 is compulsory. 7 × 3 = 21

31. What do you mean by himan activities? Explain.

32. Write about ‘flexibility’ in the business management of a sole trader.33. What are the advantages of Companies? (Any 3)34. What are the disadvantages of MNC’s? (Any 3)35. Mention the importance of Banking Services.36. Give any four points of distinction between Hire-Purchase System and Installment System of selling.37. State the Components of capital account.38. What are the ways in which a contract may be discharged?39. Who can demand performance?40. State any three features of ADR.

PART - IV

Answer all the questions. (7 × 5 = 35)

41. What are the Hindrances of Business?(or)

Briefly Explain the Features of the Company form of organisation. (Any 5)42. Explain the various Secondary functions of commercial banks.

(or) Explain different types of transports.43. Elucidate the feature of factoring.

(or) List out the various Sources of Financing.44. What are the objectives of SHGs?

(or) Highlight the features of balance of payments.45. Explain the types of Itinerant Traders.

(or) What are the features of Public corporation? (Any 5)46. What are the procedures relating to Import Trade? Explain any five.

(or) Elucidate the any five features of Income Tax.47. What is Internal Trade? What are its Types? Explain.

(or) Explain the ways of discharge of contract.

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ANSWERS

PART - I1. (a) Kautilya 11. (a) The public

2. (c) Processing Industry 12. (c) 2006

3. (a) agreement 13. (a) Small

4. (c) Model of AOA 14. (a) Washington DC

5. (c) Headquarters 15. (c) both be absolute and unqualified

6. (b) 1935 16. (b) Void

7. (d) Recurring Deposit 17. (b) Indirect Tax

8. (d) Warehouse warrant 18. (c) Mate’s receipt

9. (a) Insurable Interest 19. (d) All the above

10. (c) Sustainability 20. (a) Tender

PART - II21. (i) In olden days goods were exchanged for goods. It is called barter system.

(ii) Before invention of money goods were exchanged for goods.

22. According to Evelyn Thomas “Commercial operations deal with the buying and selling of goods, the exchange of commodities and the contribution of finished products”.

23. (i) Private sector enter prises :

(1) Reliance Industries Ltd

(2) Wipro Ltd

(ii) Global enterprises

(1) Unilever Limited

(2) Coca - cola corporation

24. (i) An Automatic Teller Machine, is popularly called as ATM.

(ii) ATM is an Electronic Device, installed by the commercial banks and operated by the customer him self, to withdraw money and to make other Financial transactions.

25. (i) The surrender value is the cash value of the policy which is payable to policyholder if he decides to terminate the contract.

(ii) This surrender value is the amount of premium paid which is returned to the policy holder at the time of surrendering the policy

26. MNC’s are defined to be an enterprise operating in several countries but managed from one country. It engages in various activities like exporting, manufacturing in different countries.

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27. (i) Self Help Group is a small Informal Voluntary Association created for the purpose of enabling members to Reap Economic benefit out of Mutual Help, solidarity, and Joint Responsibility.

(ii) The benefits include mobilisation of savings and Credit facilities for the pursuit of Group Enterprise Activity.

28. According to Cundiff and Still “Wholesaler buys from the producer and sell merchandise to the retailers and other merchants and not to the consumers”.

(or)

According to Evelyn Thomas “a true wholesaler is himself neither a manufacturer nor a retailer but act as link between the two”.

29. (i) The parties to a contract must have the legal capacity (legal ability) to make valid contract.

(ii) The Indian contract Act specifies that every person is competent to contract.

30. The term ‘person’ includes the following :

(i) an individual

(ii) a Hindu Undivided Family

(iii) a company

(iv) a firm

(v) an Association Of Persons or a Body Of Individual, whether incorporated or not

(vi) a local authority, and

(vii) every artificial, juridical person e.g. an idol or deity

PART - III31. Human activities :

(i) Human activity is an activity performed by a human being to meet his/her needs and wants or may be for personal satisfaction.

(ii) Human activities can be categorised into economic and non-economic activities. (1) Economic Activities :

(a) Activities undertaken with the object of earning money are called economic activities. (b) Examples :

�� Production of goods by manufacturers�� Distribution of goods by wholesalers

(2) Non-Economic Activities : (a) Activities undertaken to satisfy social and psychological needs are called non-economic

activities. (b) Examples :

�� Cooking food for family�� Celebrating festivals

32. (i) It is a highly flexible type of organisation. (ii) A sole proprietorship concern is generally run on a small scale basis. (iii) A change in operation is possible without involving much expenditure. (iv) The proprietor can adapt and adjust to the changing trends and market conditions because the sole trader

is the sole owner of his business.

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33. (i) Large Capital :

(1) A company can secure large capital compared to a sole trader or partnership.

(2) Large amount of capital is necessary for conducting business on a large scale.

For Example : Reliance has invested more than ` 25,000 crore in its telecom venture.

(ii) Limited Liability :

(1) The liability of a shareholder is limited.

(2) In the case of a company limited by guarantee, his liability is restricted to the amount that he has guaranteed to contribute in the event of winding up of the company.

(iii) Transferability of Shares :

(1) Transaction of Shares between two individuals is easy. So there is liquidity of investment.

(2) Any shareholder can easily convert his shares into money by selling his shares.

34. (i) Danger for Domestic Industries :

(1) MNCs, because of their vast economic power, pose a danger to domestic industries; which are still in the process of development.

(2) Domestic industries cannot face challenges posed by MNCs.

(ii) Transfer of Outdated Technology :

Where MNCs transfer outdated technology to host nation, it serves no purpose.

(iii) NoBenefittoPoorPeople:

MNCs produce only those things, which are used by the rich. Therefore, poor people of host countries do not get, generally, any benefit, out of MNCs.

35. (i) Banking Service is the nerve centre of industry and commerce in a country.(ii) It plays a vital role by providing the money required for their regular functioning and development. The

word bank normally refers to Commercial Banks.(iii) There are many types of commercial banks rendering different types of services to the public central

bank is the most important bank.(iv) Every nation has only one Central bank. It is owned by the Government of the country.(v) The control over the entire banking system of a country is vested with this Apex bank.(vi) Central Banks are known by different names in different countries. Their functions are also vary from

country to country. A Central bank is set up as an autonomous or quasi autononomous body.(vii) Stability and growth of the Country’s Economy are the main goals of a Central Bank.

(viii) In India the Reserve Bank of India is the Central Bank.

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36. Sl.No. Basis Hire - Purchase System Installment System

1. Contract of Sale It is not a contract of sale. It is a contract of Sale.2. Transfer of

OwnershipOwnership passes to the buyer only after the final installment has been paid.

Ownership passes to the buyer as soon as he has paid the first installment.

3. Rights of buyer The buyer cannot hire, sell or pledge the articles bought.

The buyer can do anything with the article.

4. Action on default The seller can take back the goods in case of default by buyer in payment of any installment.

The seller cannot take back the goods even if there is default in payment of any installment.

37. The Capital Account consists of three components. (i) PrivateCapital (ii) BankingCapital (iii)OfficialCapital (i) Private Capital : Private Capital consists of Foreign Investments, long term loan and Foreign Currency Deposits. (ii) Banking Capital : Banking Capital includes movement into external financial Asset and Liabilities, commercial and

Co-operation bank authorised to deal in Foreign Exchange. (iii) OfficialCapital: It includes RBI’s holdings of Foreign Currency and Special Drawing Rights (SDR) held by the

Government.38. A contract may be discharged in any one of the following ways :

(i) By performance (ii) By Mutual agreement (iii) By impossibility (iv) By operation of law (v) By Breach of contract (vi) By Lapse of time.

39. (i) Promisee :(1) The promisee is the only person who can demand performance of the promise under a contract.(2) For Example : A promised B to give ` 10,000 to C. But A did not pay the amount to C. Here the

person who can demand performance is B and C. (ii) Legal Representative :

(1) In the case of death of the promisee, the legal representatives of the deceased promisee can demand performance.

(2) Further, the contract, involves a personal skill or consideration, the legal representatives of the deceased promisee cannot demand performance.

(iii) Third Party : In certain exceptional cases, the third party can also enforce the contract, even though he is not a party

to it Exception to “Stranger to a contract”.

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40. The features of ADR as follows:(i) ADR’s are denominated only in US dollars.(ii) They are issued only to investors who are American residents.(iii) The depository bank should be located in US.(iv) The approval of securities and Exchange commission (SEC) of US needs to be obtained for issuing

ADR.(v) They are sub-classified on the basis of level of clearance made by SEC.

PART - IV41. The various hindrances removed by business are as follows.

(i) Hindrance of Person :(1) Manufacturers do not know the place and face of the consumers. (2) It is the retailer who knows the taste, preference and location of the consumers.

(ii) Hindrance of place :(1) Production takes place in one centre and consumers are spread throughout the country and world. (2) Rail, air, sea and land transports bring the products to the place of consumer.

(iii) Hindrance of time :(1) Consumers want products whenever they have money, time and willingness to buy. (2) Goods are produced in anticipation of such demands.

(iv) Hindrance of risk of deterioration in quality:(1) Proper packaging and modern air conditioned storage houses ensure that there is no deterioration in

quality of products. (2) Goods are protected against insects, rats, evaporation etc.

(v) Hindrance of risk of loss :(1) Fire, theft, floods and accidents may bring huge loss to the business. (2) Insurance companies serve to cover the risk of such losses.

(vi) Hindrance of knowledge : Advertising and communication help in announcing the arrival of new products and their uses to the

people.(vii) Hindrance of exchange : Money functions as a medium of exchange and enable the buying and selling of any product or service

by payment of the right price.(or)

(i) Separate Legal Entity :(1) Under Incorporation a company becomes a separate legal entity as compared to its members. (2) It has its own seal and its own name, its assets and liabilities are separate and distinct from those of

its members.(3) It is capable of owning property, incurring debt, and borrowing money, employing people, having

a bank account, entering into contracts and suing and being sued separately.(ii) Perpetual Succession :

(1) A company does not cease to exist unless it is specifically wound up or the task for which it was formed has been completed.

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(2) Membership of a company may keep on changing from time to time but that does not affect life of the company.

(iii) Separate Property : A company is a distinct legal entity. A member cannot claim to be owner of the company’s property

during the existence of the company.(iv) Transferability of Shares :

(1) Shares in a company are freely transferable.(2) When a member transfers his shares to another person, the transferee steps into the shoes of the

transferor and acquires all the rights of the transferor in respect of those shares.(v) Common Seal :

(1) A company is an artificial person and does not have a physical presence.(2) The name of the company must be engraved on the common seal.(3) Any document not bearing the seal of the company may not be accepted as authentic and may not

have any legal force.42. (i) Apart from the basic or Primary functions commercial banks render various other services which are

known as secondary functions. (ii) These services can be broadly classified into agency services and general utility services.

(1) Agency Functions : Banks Act as agents of Customers and provide certain services. They are called Agency functions,

which are as follows :(a) Transfer of Funds :

�� Banks issue demand drafts, bankers’ cheques, travelers’ cheques, etc. and help in transfer of funds from one place to another.

�� Customers need not carry cash. They can just forward the draft issued by the bank to the receiving institution.

�� A small commission is collected by banks for this service(b) Periodic Payment of Premiums, Rent, etc.

�� After instruction from the customers, banks undertake the monthly payment of insurance premium, rent, telephone bill, etc. from the accounts of customers.

�� Now a days these payments are made through electronic clearing system facility offered by the banks.

(c) 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.�� Similarly cheques issued by a customer is honoured and the amount paid as directed by the

customer.(d) Acting as Executors, Trustees and Attorneys :

�� Banks act as executors of will of the customers and implement their will after their death.�� As a trustee a bank takes care of the funds of the customers.�� Banker signs transfer deed of the properties of the customers in the capacity of attorney to

customers.

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(e) Conduct share market transactions :�� A Demate account should be opened with Depository Participant and that demate account

should be linked with savings bank account by the customer.�� Then the customer can ask the bank to conduct online purchase or sale of securities, on behalf

him.(f) Preparation of Income tax return : Banks prepare the Annual Income Tax return on behalf of the customers and provide Income tax

related advices to them.(g) Dealing in Foreign Exchange : Banks buy and sell Foreign currencies on behalf of customers.(h) Acting as Correspondent : Banks Act as Correspondent of customers and receive Travel Ticket, Passport, etc.

(2) General Utility Functions : In addition to Agency functions, commercial Banks offer some services for the general welfare of

the customers. They are called general utility services. They are as follows:(a) Issue of demand drafts and Banker’s cheques :

�� Demand drafts and banker’s cheques are issued to public and customers as well. �� Instead of sending money they can attach these instruments for payment of educational fees,

etc.(b) Accepting Bill of exchange on behalf of Customers :

�� Banks accept Bills of behalf of customers and make payments to the Foreign Exporter.�� Afterwards, the bank collect from the customers.

(c) Safety Lockers :�� Valuable documents, jewels etc. can be kept safely in a vault provided by Bank for a Rent.

These vaults room is called “Strong Room”.(d) Letter of Credit :

�� This Document is given by bank on behalf of importing customers to the Exporter guaranteeing payment for the Imported goods.

�� It is very important document in International trade.(e) Travellers Cheques :

�� Customers need not carry cash during travel in India or abroad.�� The denomination and words are printed in the cheque. It is accepted as money in shops, hotels,

travel agencies, etc.(f) Gift Cheques :

�� These denomination printed cheques are available in attractive design so that it can be presented during Wedding, Birthday Functions, etc.

(g) Reference Service :�� Business firms can give their Bank’s name as reference to the new Business Institution with

which they want to establish commercial relationship.�� Banks willingly act as referees and provide information about the financial standing of their

customers.(or)

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Transport can be divided in to three important types.(i) Land Transport(ii) Water Transport(iii) Air Transport(i) Land Transport :

(1) Transport of people and goods by land vehicles is known as Land transport. It is also called as ‘surface’ transport.

(2) India has one of the largest net work of Land transport in the world. The following are the various means of Transport comes under this category.�� Pack Animals�� Bullock Carts�� Motor Lorries and Buses�� Tram ways�� Railways

(ii) Water Transport :(1) “Water is the gift of nature” Human civilization through gradual application of science and

technology, have utilized water resources for economic, political and military activities.(2) Water transport is the process of moving people, goods etc. by barge, boat, ship or sailboat over a

sea, ocean, lake, canal, river, etc. Water Transports are two types. They are :�� Inland Waterways �� Ocean Waterways

(iii) Air Transport :(1) Air transport is the fastest and the costliest mode of transport. Commercial air transport is one of

the most prominent modes of overseas transport.(2) The modern air transport has its growth with the invention of Airplane by Wright Brothers.(3) Air transport is a form of travel in vehicles such as helicopters, hot air balloons, blimps, gliders,

hang gliding, parachuting, airplanes, jets etc.43. (i) Maintenance of book-debts :

A factor takes the responsibility of maintaining the accounts of debtors of a business institution.(ii) Credit coverage : The factor accepts the risk burden of loss of bad debts leaving the seller to concentrate on his core

business.(iii) Cash advances : Around eighty percent of the total amount of accounts receivables is paid as advance cash to the client.(iv) Collection service : Issuing reminders, receiving part payments, collection of cheques form part of the factoring service.(v) Advice to clients : From the past history of debtors, the factor is able to provide advices regarding the credit worthiness of

customers, perception of customers about the products of the client, etc.(or)

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The various sources of Finance can be classified into three categories on the basis of :(i) Period(ii) Ownership and(iii) Source of generation (i) On the basis of period : The different source of finance can be further grouped into three categories on the basis of period :

(1) Short-term Finance (2) Medium -term Finance (3) Long - term Finance

(ii) On the basis of Ownership : Business Finance can be divided into two categories based on ownership funds :

(1) Owners Funds (2) Borrowed Funds

(iii) On the basis of Generation : The sources of funds can be grouped into two categories based on generation :

(1) Internal sources (2) External sources

44. Objectives of Self Help Groups :(i) Focusing on empowerment of woman.(ii) Saving people from the clutches of money lenders.(iii) Building capacity of women and to enable them to participate in generating activities.(iv) Creating the habit of saving in the minds of the people who are economically backward.(v) Promoting enterpreneurship skills among women.(vi) Creating awareness about the importance of credit circle or revolving credit and the payment of the

circle.(vii) Elevating the economic standard of the member’s families.(viii) Developing skills and facilitating credit linkages for eventual economic empowerment.(ix) Promoting awareness among the members about the solution for their Economic problems.(x) Identifying the common interest of the group members and carrying out their operations in the most

efficient and economic way.(xi) Enabling the members to overcome all social and economic barriers.(xii) Promising and ensuring human rights to women at all stages of their life cycle.

(or) The main features of balance of payments are as follows :

(i) It is a systematic record of all Economic transactions between one country and the certain other countries of the world.

(ii) It is prepared for a period of three months or twelve months i.e. usually for 12 months.(iii) It contains all receipts and payments both visible and invisible.(iv) It includes all Economic both recorded on Current Account and Capital Account.

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(v) Economic transactions are recorded according to double entry principle of book keeping. Accordingly receipts are recorded on Credit side and payments are recorded on Debit side.

(iv) It indicates a Country’s position in Foreign Trade.(vii) BOP shows a favourable or surplus position when the total receipts from foreign countries exceed the

total payment to Foreign Countries. BOP is said to be unfavourable or in deficit.(viii) BOP position shows the Economic health of nation just like the therms meter indicates the Temperature

of human body.(ix) Favourable BOP indicates Economic prosperity while unfavaourable balance of payments shows

Economic weakness of a country.45. (i) Pedlers and Hawkers :

(1) Peddlars are individuals who sell their goods by carrying on their head or shoulders moving from place to place on foot.

(2) Hawkers are petty retailers who sell their goods at various places such as bus stop, Railway Station, Public park and Gardens, residential areas and other Public places using a convenient vehicle to carry goods from place to place.

(ii) Street Vendors : The traders sit on the foot path of the road or at the end of the road (pavement) and sell their goods such

as fruits, vegetables, books, etc. are called Street vendors.(iii) Market Traders :

(1) Small Traders open their shops at different places on Fixed days or dates such as every Sunday or alternative Wednesday and so on.

(2) They deal in one particular line of merchandise and in low priced consumer items of daily use. Examples : Pollachi, Manapparai, Ranipet, etc.

(iv) Cheap Jacks :(1) Those retailers who have independent shops of temporary nature in a business locality are depending

upon the potentiality of the area.(2) They deal in consumer goods and services such as Shoes, and Chappals, Plastic items, Repair of

Watches, etc.(or)

(i) Special Statute :(1) A public corporation is created by a special Act of the Parliament or the State Legislature.(2) The Act defines its powers, objectives, functions and relations with the ministry and the Parliament

(or State Legislature).(ii) Separate Legal Entity :

(1) A public corporation is a separate legal entity with perpetual succession and common seal.(2) It has an existence, independent of the Government.

(iii) Capital Provided by the Government : The capital of a public corporation is provided by the Government or by agencies controlled by the

government.(iv) Financial Autonomy :

(1) A public corporation enjoys financial autonomy.(2) It prepares its own budget; and has authority to retain and utilize its earnings for its business.

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(v) Own Staff : A publication corporation has its own staff; whose appointment, remuneration and service conditions

are decided by the corporation itself.46. The following are the procedure of import trade :

(i) Obtaining Import License(ii) Trade Enquiry(iii) Obtaining Foreign Exchange(iv) Placing an Indent / Order(v) Opening Letter of Credit(vi) Receiving Shipping Document(vii) Appointment of Clearing Agents(viii) Fulfillment of customs formalities(ix) Taking delivery of goods(x) Settlement of Import Bill.Explanation for any Five :Import Trade procedures are varies from country to country. Following are the procedure of Import Trade.(i) Obtaining Import Licence :

(1) Importer has to secure Import and Export Code (IEC) from the Direct General of Foreign Trade or its Regional Authority.

(2) The goods are classified into three categories, namely, restricted, canalised, and prohibited.(3) Goods not specified in the above categories can be freely imported without any restrictions.(4) Import License is not required to import the goods not mentioned in the above classification.

(ii) Trade Enquiry :(1) Having obtained IEC, the intending importer has to make enquiry from exporter or his agents.(2) Importer makes request by e-mail, postal mail, to supply the details. The enquiry may be specification

of goods like size, design, quality, etc, price per unit, terms of shipping, Terms of payment, etc.(iii) Obtaining Foreign Exchange :

(1) Since importer has to settle import bills in foreign currency he has to obtain foreign exchange.(2) The importer has to provide IEC Code in the form supplied by authorised dealer to get foreign

exchange.(3) The importer has to submit an application along with necessary documents to the Exchange control

department of RBI.(4) After scrutnsing the application. The Reserve bank of India will sanction the foreign exchange.

(iv) Placing an indent / order :(1) Importer places an order either directly or through an Indent houses.(2) The indent contains the details like type of goods, design for goods, price, quantity, grade, packing

instructions, insurance, delivery mode, desired delivery period, mode of period, mode of shipment etc.

(v) Opening Letter of Credit :(1) When foreign exporter does not know Indian Importer, he may like to ensure the credit worthyness

of the unknown importer.

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(2) In such a case exporter may advise the importer to arrange for letter of credit in his favour.(3) Letter of credit is a document under which issuing bank undertakes to make payment on behalf the

importer.(or)

(i) Leived asper the constitution : Income tax is levied in Indian by virtue of entry No. 82 of List I (Union List) of seventh schedule to the

Article 246 of the constitution of India.(ii) Levied by Central Government : Income tax is charged by the Central Government on all incomes other than agricultural income.(iii) Direct Tax :

(1) Income Tax is a direct tax. It is because the liability to deposit and ultimate burden are on same person.

(2) The person earning income is liable to pay income tax out of his own pocket and cannot pass on the burden of tax to an a other person.

(iv) Annual Tax : Income tax is an annual tax, because it is the income of a particular year which is chargeable to tax.(v) Tax on person : It is a tax on income earned by a person(vi) Tax on Income : It is a tax on income.(vii) Applicability : Income-tax is applicable throughout India including the state of Jammu and Kashmir.

47. Internal Trade is the Buying and Selling of goods and Services within the boundaries of a nation. It is also known as Home trade / Inland trade / Domestic trade.Types of Internal Trade :The Internal trade may be divided into Two types :(i) Wholesale trade(ii) Retail trade(i) Wholesale trade :

(1) Wholesale trade refers to Buying and Selling of goods and services in large quantities for the purpose of resale. The trader who deal in wholesale trade are known as Wholesale traders.

(2) Wholesaler buy the goods directly from the manufacturers in bulk and sell them in relatively smaller quantities to the larger number of retailers.

(3) Therefore, they serve as an important link between manufacturers and retailers.(ii) Retail Trade : Retail trade refers to Buying of goods and services in relatively small quantities from wholesaler and

selling them to the ultimate consumers. The traders who deal in retail trade are known as retailers.(or)

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The various ways by which a contract can be discharged are as follows :(i) Discharge by performance :

(1) Performance implies carrying out the obligation of the contract.(2) Performance must be completed according to the real intentions of the agreement Performance

must be done according to the time and manner prescribed.(3) Performance of the contract may be of two types. namely :

�� Actual performance�� Attempted performance

(ii) By Agreement on consent : Agreement between the parties comes to an end by mutually agreeing for it. Any contract is created by

an agreement, hence in the same way, it can be discharged by an agreement. The consent may be of the following types : (1) Express consent (2) Implied consent(iii) By impossibility of performance : A contract may be discharged if its performance becomes impossible. There are two types of impossibility

of performance such as : (1) Impossibility existing at the time of agreement. (2) Impossibility arising subsequent to the formation of contract.(iv) By Lapse of time :

(1) According to the Limitation Act, 1963, a contract must be performed within a specified time.(2) If it is not performed within this specified time limit and against which if no action is taken by the

promisee in the Court of Law within specified time, then the promise is deprived of his remedy at Law.

(3) In such cases, the contract is discharged.(v) By operation of Law : A contract can be discharged by the operation of law. The operation of law by which contract can be

discharged as follows :(1) By death(2) By Merger(3) By insolvency(4) By unauthorised alternation of the terms of a contract.(5) Rights and Liabilities vesting in the same person.

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Model Question Papers...Concentrating only on the book-back questions and/or previous year...

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Transcript of Model Question Papers...Concentrating only on the book-back questions and/or previous year...