Plus One Business Studies Previous Year Question Paper 2018

Kerala Plus One Business Studies Previous Year Question Paper 2018

General Instructions to candidates

  • There is a ‘cool off time’ of 15 minutes in addition to the writing time.
  • Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
  • Read the instructions carefully.
  • Read the questions carefully before answering.
  • Calculations, figures, and graphs should be shown in the answer sheet itself.
  • Malayalam version of the questions is also provided.
  • Give equations wherever necessary.
  • Electronic devices except nonprogrammable calculators are not allowed in the Examination Hall.

Plus One Business Studies Model Question Papers Paper 2 01

Answer all questions from question numbers 1 to 9. Each carries one score.
Plus One Business Studies Previous Year Question Papers and Answers 2018 1

Question 1.
The broad classification of business activities includes and.
a. Trade and Auxiliaries to trade
b. Industry and Commerce
c. Industry and Traded
d. Internal Trade and External Trade
Plus One Business Studies Previous Year Question Papers and Answers 2018 2

Question 2.
Which among the following is the main characteristic of Hindu Undivided Family Business?
a. Single ownership
b. Transfer of membership
c. Membership by birth
d. Registration is compulsory
Plus One Business Studies Previous Year Question Papers and Answers 2018 3

Question 3.
VSAT (Very Small Aperture Terminal) is satellite-based…
a. rail transport service
b. communication service
c. banking service
d. air transport service
Plus One Business Studies Previous Year Question Papers and Answers 2018 4

Question 4.
An apex bank set up in India to provide financial assistance to small business organizations is …………..
Plus One Business Studies Previous Year Question Papers and Answers 2018 5
a. SIDBI
b. RSBDC
c. IDBI
d. IBRD

Question 5.
Identify the document issued by public companies to invite public to subscribe to its shares.
a. Prospectus
b. Memorandum of Association
c. Table A
d. Articles of Association
Plus One Business Studies Previous Year Question Papers and Answers 2018 6

Question 6.
Fill in the series as per hint given:
a. Equity Shares Owned Capital
b. Debentures?
Plus One Business Studies Previous Year Question Papers and Answers 2018 7

Question 7.
Which among the following is against bush ness ethics?
a. Using fair weights and measures
b. Fair treatment to workers
c. Earning reasonable profits
d. Charging unfair price
Plus One Business Studies Previous Year Question Papers and Answers 2018 1

Question 8.
Find the odd one from the following:
a. Supermarkets
b. Multiple shops
c. Market traders
d. Mail order houses
Plus One Business Studies Previous Year Question Papers and Answers 2018 9

Question 9.
Which cine of the following is NOT an export document?
a. Letter of credit
b. Bill of Lading
c. Bill of entry
d. Certificate of origin
Plus One Business Studies Previous Year Question Papers and Answers 2018 10

Answer any five from question numbers 10 to 15. Each carries two scores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 11

Question 10.
Write any two social responsibilities of business towards consumers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 12

Question 11.
Suggest any two payment mechanisms used in e-Business.
Plus One Business Studies Previous Year Question Papers and Answers 2018 13

Question 12.
‘A public sector undertaking formed by passing an Act in the Parliament’. Identify it. Give an example.
Plus One Business Studies Previous Year Question Papers and Answers 2018 14

Question 13.
Write any two merits of retained earnings as a source of finance.
Plus One Business Studies Previous Year Question Papers and Answers 2018 15

Question 14.
Differentiate the terms Licensing and Franchising in connection with the international business.
Plus One Business Studies Previous Year Question Papers and Answers 2018 16

Question 15.
List any two services rendered by retailers to consumers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 17

Answer any six from question numbers 16 to 22. Each carries three scores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 18

Question 16.
Write any three differences between profession and Employment.
Plus One Business Studies Previous Year Question Papers and Answers 2018 19

Question 17.
There are persons who assemble resources and undertake the necessary steps to form a company. Name such persons, Explain their legal position in the company.
Plus One Business Studies Previous Year Question Papers and Answers 2018 20
Plus One Business Studies Previous Year Question Papers and Answers 2018 21

Question 18.
Write any three differences between departmental undertakings and statutory corporations.
Plus One Business Studies Previous Year Question Papers and Answers 2018 22

Question 19.
List out any three features of cottage industries.
Plus One Business Studies Previous Year Question Papers and Answers 2018 23

Question 20.
A large retailing unit, selling a wide variety of consumer goods on low price and with a self-service concept. Identify it and mention any two advantages.
Plus One Business Studies Previous Year Question Papers and Answers 2018 24

Question 21.
From the items given in brackets, choose the suitable mode of entry into international business for the following cases. (Joint venture, Contract manufacturing, Licensing)
a. Agreement with a manufacturer of a foreign country to get the products produced.
b. A contractual arrangement to access the patent or technology of a firm for producing goods in the foreign country.
c. Establishing a firm jointly with a foreign partner.
Plus One Business Studies Previous Year Question Papers and Answers 2018 25

Question 22.
Briefly explain the objectives of the International Monetary Fund.
Plus One Business Studies Previous Year Question Papers and Answers 2018 26

Answer the following question which carries four scores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 27

Question 23.
Match the following,
Plus One Business Studies Previous Year Question Papers and Answers 2018 28
Plus One Business Studies Previous Year Question Papers and Answers 2018 29

Answer any two from question numbers 24 to 26. Each carries four scores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 2

Question 24.
A Business Organization joins hands with the other one for mutual benefits.
a. Name the type of a business referred here.
b. Describe any three benefits of it.
Plus One Business Studies Previous Year Question Papers and Answers 2018 31

Question 25.
Distinguish between goods and services.
Plus One Business Studies Previous Year Question Papers and Answers 2018 32

Question 26.
Mithra opines that e-Business and e-Commerce are the same. Do you agree with her? Justify your answer.
Plus One Business Studies Previous Year Question Papers and Answers 2018 33

Answer any three from question numbers 27 to 30. Each carries five scores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 3

Question 27.
Explain briefly the multiple objectives of a business.
Plus One Business Studies Previous Year Question Papers and Answers 2018 35

Question 28.
Write notes on different kinds of social responsibilities of a business.
Plus One Business Studies Previous Year Question Papers and Answers 2018 36

Question 29.
What is meant by Memorandum of Association? Explain any four clauses.
Plus One Business Studies Previous Year Question Papers and Answers 2018 37

Question 30.
Describe the services rendered by wholesalers to the manufacturers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 38

Answer any two from question numbers 31 to 33. Each carries eight scores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 39

Question 31.
Mr. Mohammed. and Mr. Sajan entered into an agreement to start a business to share profits. Identify the form of business they decided to start. Explain its four merits and three limitations.
Plus One Business Studies Previous Year Question Papers and Answers 2018 40
Plus One Business Studies Previous Year Question Papers and Answers 2018 41

Question 32.
Explain the major functions of Commercial Banks In India.
Plus One Business Studies Previous Year Question Papers and Answers 2018 42 Plus One Business Studies Previous Year Question Papers and Answers 2018 43

Question 33.
Explain the various external sources of finance available for Joint Stock Companies in our country.
Plus One Business Studies Previous Year Question Papers and Answers 2018 44

Answers

Answer 1.
b. Industry and Commerce

Answer 2.
c. Membership by birth

Answer 3.
b. Communication service

Answer 4.
a.SIDBI

Answer 5.
a. Prospectus

Answer 6.
Creditorship capital

Answer 7.
d.Charging unfair price

Answer 8.
Market traders

Answer 9.
a or c

Answer 10.

  • Supply of the right quantity of goods.
  • Supply of the right quantity of goods
  • Supply of goods at reasonable pa rice.
  • Free from adulteration, poor quality, misleading advt etc.

Answer 11.
Payment mechanism
Plus One Business Studies Previous Year Question Papers and Answers 2018 45
Payment can be done in any of the following methods:
Plus One Business Studies Previous Year Question Papers and Answers 2018 46

a. Cash on Delivery (CoD)
Plus One Business Studies Previous Year Question Papers and Answers 2018 47Plus One Business Studies Previous Year Question Papers and Answers 2018 48
Here the payment is made at the time of physical delivery of goods.
Plus One Business Studies Previous Year Question Papers and Answers 2018 49

b. Cheque: Here cheque is received and upon realization, the delivery goods are. made
Plus One Business Studies Previous Year Question Papers and Answers 2018 50

c. Net-banking transfer
Plus One Business Studies Previous Year Question Papers and Answers 2018 51
Modern banking system provides the facility of electronic transfer of funds over the net to the customers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 52

d. Creditor Debit card
Plus One Business Studies Previous Year Question Papers and Answers 2018 53Plus One Business Studies Previous Year Question Papers and Answers 2018 54
They are popularly known as plastic money. Credit cards are issued by the bank, that allows the holder to make purchase on credit. The amount due from the cardholder to the online seller is assumed by the card issuing bank, who transfers the amount which is involved in the transaction.

The debit card also facilitate the process of payment as one can make a purchase through it to the extent of the amount lying in the persons own savings account.
Plus One Business Studies Previous Year Question Papers and Answers 2018 56

e. Digital cash
Plus One Business Studies Previous Year Question Papers and Answers 2018 57
This is a type of electronic currency that exists only in cyberspace. It has physical features but has the capability of using it as real currency in an electronic format.
Plus One Business Studies Previous Year Question Papers and Answers 2018 58

Answer 12.
Statutory corporations.
e. g., LIC, RBI, SBI etc.

Answer 13.
Retained earnings (plowing back of profit)
Plus One Business Studies Previous Year Question Papers and Answers 2018 59
A portion of net earnings which are not distributed to shareholders but are retained in the business for use in the future, known as retained earnings.
Plus One Business Studies Previous Year Question Papers and Answers 2018 60

Merits
Plus One Business Studies Previous Year Question Papers and Answers 2018 61

  • It is a permanent source of funds available to an organization.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 62
  • No cost in the form of interest, dividend.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 63
  • A greater degree of operational freedom and flexibility.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 64
  • It may lead to an increase in the market price of the equity shares of a company
    Plus One Business Studies Previous Year Question Papers and Answers 2018 65

Answer 14.
Licensing and franchising
Plus One Business Studies Previous Year Question Papers and Answers 2018 66
Permitting a person/ firm in a foreign country to produce and sell goods under your trademarks, patents or copyrights for a fee is another way of operating an international business. Franchising is somewhat similar to licensing with the difference that it is connected with the provision of services.
Plus One Business Studies Previous Year Question Papers and Answers 2018 67

Answer 15.
a. Retailers maintain regular availability of various products produced by different manufacturers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 68
b. Retailers provide new products information to customers by arranging an effective display of products and through personal selling.
Plus One Business Studies Previous Year Question Papers and Answers 2018 69

Answer 16.

Profession Employment
Membership of a professional body and certificate of practice Appointment letter and service agree­ment
Rendering of per­sonalised, expert services Performing work as per service cont­ract or rules of ser­vice
Expertise and tra­ining in a specific field is a must Qualification and training as prescri­bed by the employer

Answer 17.
Licensing and franchising
Plus One Business Studies Previous Year Question Papers and Answers 2018 70
Permitting a person/ firm in a foreign country to produce and sell goods under your trademarks, patents or copyrights for a fee is another way of operating an international business. Franchising is somewhat similar to licensing with the difference that it is connected with the provision of services.
Plus One Business Studies Previous Year Question Papers and Answers 2018 71

Answer 18.
Departmental undertaking

  1. The funding of these enterprises come directly from the Government Treasury and are an annual appropriation from the budget of the Government. The revenue earned by these is also paid into the treasury.
  2. They are subject to accounting and audit controls applicable to other Government activities.
  3. The employees of the enterprise are Government servants and their recruitment and conditions of service are the same as that of other employees directly under the Government. They are headed by Indian Administrative Service (IAS) officers and civil servants who are transferable from one ministry to another.

Statutory corporation

  1. Statutory corporations are set up under an Act of Parliament and are governed by the provisions of the Act. The Act defines the objects, powers, and privileges of a statutory corporation.
  2. This type of organization is wholly owned by the state. The government has the! ultimate financial responsibility and has the power to appropriate its profits. At the same time, the state also has to bear the losses, if any.
  3. A statutory corporation is a body

Answer 19.

  • These are organized by individuals, with private resources
    Plus One Business Studies Previous Year Question Papers and Answers 2018 72
  • Normally use family labor and locally available talent: the equipment used is simple
    Plus One Business Studies Previous Year Question Papers and Answers 2018 73
  • Capital investment is small
    Plus One Business Studies Previous Year Question Papers and Answers 2018 74
  • Produce simple products, normally in their own premises
    Plus One Business Studies Previous Year Question Papers and Answers 2018 75

Answer 20.
1. Supermarkets
Plus One Business Studies Previous Year Question Papers and Answers 2018 76
it is a large scale retail organization deals in different kinds of consumer goods. A unique feature of the supermarket is the absence of salesmen to serve the consumer. It is also known as self-service stores.
Plus One Business Studies Previous Year Question Papers and Answers 2018 77

Advantage
Plus One Business Studies Previous Year Question Papers and Answers 2018 78

  • They offer a wide variety of products at low cost under one roof.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 79
  • As they are located at a central location it results in a high turn over
    Plus One Business Studies Previous Year Question Papers and Answers 2018 80
  • It provides wide selection facility
    Plus One Business Studies Previous Year Question Papers and Answers 2018 81
  • No bad debts as goods are sold on a cash basis
    Plus One Business Studies Previous Year Question Papers and Answers 2018 82

Answer 21.
a. Contract manufacturing
b. Licencing
c. Joint Venture

Answer 22.
a. To promote international monetary cooperation.
b. To facilitate, expansion of balanced growth of international trade.
c. To promote exchange stability.

Answer 23.
Plus One Business Studies Previous Year Question Papers and Answers 2018 83

Answer 24.
a. Joint ventures
b. It helps to execute large projects requiring huge capital outlays and manpower.
The foreign business firms benefit from local partners knowledge of the host countries.

Answer 25.

Basis Service Goods
Nature An activity or process A physical object
Type Heterogeneous Homogenous.
Intangibility Intangible Tangible
Inventory Can not be kept in stock Can be kept in stock
Involvement Participation of customers at the time of service delivery Involvement at the time of deliv­ery not possible
Inconsistency Different customers having different demands Different customers getting standardized demands fulfilled.
Inseparability Simultaneous production and consumption. Separation of production and consumption

Answer 26.
I do not agree with her.
e-business may be defined as the conduct of industry, trade, and commerce using computer networks.
Plus One Business Studies Previous Year Question Papers and Answers 2018 84
e-business is a broader term and e-commerce is a part of e-business, e-business includes all the electronically conducted business functions such as production, accounting, personnel etc.e-commerce is the buying and selling of goods and services over the internet.
Plus One Business Studies Previous Year Question Papers and Answers 2018 85
Plus One Business Studies Previous Year Question Papers and Answers 2018 86

Answer 27.
1. Market standing
Plus One Business Studies Previous Year Question Papers and Answers 2018 87
It refers to the position of an enterprise in relation to its competitors.
Plus One Business Studies Previous Year Question Papers and Answers 2018 88

2. Innovation
Plus One Business Studies Previous Year Question Papers and Answers 2018 89
It is the introduction of new ideas or methods in the way something is done or made. It accelerates the growth of an enterprise.
Plus One Business Studies Previous Year Question Papers and Answers 2018 90

3. Productivity
Productivity is ascertained by comparing the value of output with the value of the input. It is used as a measure of efficiency
Plus One Business Studies Previous Year Question Papers and Answers 2018 91

4. Physical and financial resources:
Plus One Business Studies Previous Year Question Papers and Answers 2018 92
The business must aim at maximum utilization of available physical and financial resources.
Plus One Business Studies Previous Year Question Papers and Answers 2018 93

5. Earning profit
Earning maximum profit is the primary objective of every business. Profit is required for the survival and growth of a business.
Plus One Business Studies Previous Year Question Papers and Answers 2018 95

6. Manager performance and development
Plus One Business Studies Previous Year Question Papers and Answers 2018 96
Efficient managers are needed to conduct and coordinate business activities. Managers performance and development is also an important objective of business enterprises
Plus One Business Studies Previous Year Question Papers and Answers 2018 97

7. Workers performance and attitude
Plus One Business Studies Previous Year Question Papers and Answers 2018 98
Workers performance and attitude determine their contribution towards productivity and profitability of any enterprise. Every enterprise must aim at improving its workers performs nee.
Plus One Business Studies Previous Year Question Papers and Answers 2018 99

8. Social responsibility
Plus One Business Studies Previous Year Question Papers and Answers 2018 100
It refers to the obligation of a business firm to contribute resources to solving social problems and work in a socially desirable manner.
Plus One Business Studies Previous Year Question Papers and Answers 2018 101

Answer 28.
a. Economic Responsibility
Plus One Business Studies Previous Year Question Papers and Answers 2018 102
A business enterprise is basically an economic entity and therefore, its primary social responsibility economic produce goods and services that society wants and sell them at a profit.
Plus One Business Studies Previous Year Question Papers and Answers 2018 103
Plus One Business Studies Previous Year Question Papers and Answers 2018 104

b. Legal Responsibility
Plus One Business Studies Previous Year Question Papers and Answers 2018 105
Every business has a responsibility to operate within the laws of the land. Since these laws are meant for the good of the society wants and sell them at a profit,
Plus One Business Studies Previous Year Question Papers and Answers 2018 106

c. Ethical Responsibility
Plus One Business Studies Previous Year Question Papers and Answers 2018 107
This includes the behavior of the firm that is expected by society but not codified in law.
Plus One Business Studies Previous Year Question Papers and Answers 2018 108

d. Discretionary Responsibility
Plus One Business Studies Previous Year Question Papers and Answers 2018 109
This refers to purely voluntary obligation that an enterprise assumes for instance providing charitable contribution to educational institutions or helping the affected people during floods or earthquakes.
Plus One Business Studies Previous Year Question Papers and Answers 2018 110

Answer 29.
Memorandum of association is the charter or Magna Carta of the company. It is the fundamental document of the company. It defines the objects of the company and provides the framework beyond which the company cannot operate. Its purpose is to enable the shareholders, creditors, and others who deal with. the company to know the scope of the company’s operations. Contents of the memorandum clauses of a memorandum.
Plus One Business Studies Previous Year Question Papers and Answers 2018 111

A Name clause
Plus One Business Studies Previous Year Question Papers and Answers 2018 112
The name clause furnishes the name of the company. The name should not be identical with, or similar to, the name of an existing company. The name should not suggest any connection with or patronage of a national hero. The name must not directly or indirectly imply any participation of the central or state government. In case of a public company, the name should end with the word ‘limited’ and in case of a private company the name should end with the word ‘private limited’.
Plus One Business Studies Previous Year Question Papers and Answers 2018 113

B. Registered office clause
Plus One Business Studies Previous Year Question Papers and Answers 2018 114
This clause specifies the name of the state wherein which the registered of the company is proposed to be situated. Full address of the company must be filed with the registrar within 30days of incorporation of the company. It is also known as situation or domicile clause.
Plus One Business Studies Previous Year Question Papers and Answers 2018 115

C. Object Clause
Plus One Business Studies Previous Year Question Papers and Answers 2018 116
his is the most clause of the memorandum it defines a purpose for which the company is formed. A company is not legally/7 entitled to undertake an activity, which is yond the objects stated in this clause.
Plus One Business Studies Previous Year Question Papers and Answers 2018 117

D. Liability clause
Plus One Business Studies Previous Year Question Papers and Answers 2018 118
It states whether the liability of members is limited by shares or by guaranty.
Plus One Business Studies Previous Year Question Papers and Answers 2018 119

E. Capital clause
Plus One Business Studies Previous Year Question Papers and Answers 2018 120
This clause specifies the maximum capital which the company will be authorized sed to raise through the issue of shares,
Plus One Business Studies Previous Year Question Papers and Answers 2018 121

F. Association Clause
Plus One Business Studies Previous Year Question Papers and Answers 2018 122
This clause state that the subscriber express of their willingness and agreement to form a company.
Plus One Business Studies Previous Year Question Papers and Answers 2018 123

Answer 30.
1. Services to manufacturers
a. Facilitate large-scale production
Plus One Business Studies Previous Year Question Papers and Answers 2018 124
Bulk orders from wholesalers enable the producers to undertake production on a large scale and take advantages of economies of scale.
Plus One Business Studies Previous Year Question Papers and Answers 2018 125

b. Bearing risk
Plus One Business Studies Previous Year Question Papers and Answers 2018 126
The wholesaler deals in goods in their own name and takes the risk of loss or damage in storage and transit.
Plus One Business Studies Previous Year Question Papers and Answers 2018 127

c. Financial assistance
Plus One Business Studies Previous Year Question Papers and Answers 2018 128
Wholesalers provide financial assistance to manufactures b means they make ready cash payment for purchases and even advance money to producers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 129

d. Expert advice
Plus One Business Studies Previous Year Question Papers and Answers 2018 130
As wholesalers are in direct contact with retailers they provide useful information regarding customer taste and preference and market condition t 0 manufacturers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 131

e. Help in marketing function:
Functions of wholesalers relieve producers from many of the marketing activities and enable them to concentrate on the production activity.
Plus One Business Studies Previous Year Question Papers and Answers 2018 132

f. Facilitate production continuity by purchasing the goods and when these are produced

g. Storage/warehousing of goods produced
Plus One Business Studies Previous Year Question Papers and Answers 2018 133

2. Services to retailers:
Plus One Business Studies Previous Year Question Papers and Answers 2018 134
a. Availability of goods:
Plus One Business Studies Previous Year Question Papers and Answers 2018 135
The wholesalers make the products’ of various manufacturers readily available to the retailers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 136

b. Marketing support:
The wholesalers perform various marketing functions and provide support to retailers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 138

c. Grant of credit
Plus One Business Studies Previous Year Question Papers and Answers 2018 139
WhoJesalers provide credit facilities to retailers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 140

d. Specialized knowledge:
Plus One Business Studies Previous Year Question Papers and Answers 2018 141
The wholesalers specialize in one line of products and know the pulse of the market. So they offer expert advice to retailers.
Plus One Business Studies Previous Year Question Papers and Answers 2018 142

e. Risk sharing
Plus One Business Studies Previous Year Question Papers and Answers 2018 143
Wholesalers sell goods to retailers in small quantities and thus retailers do not face the risk of storage, pilferage, obsolescence etc.
Plus One Business Studies Previous Year Question Papers and Answers 2018 144

Answer 31.
PARTNERSHIP
Plus One Business Studies Previous Year Question Papers and Answers 2018 145
A partnership is a relation between persons who have agreed to share the profits of the business carried on by all or any one of them acting for all.
Plus One Business Studies Previous Year Question Papers and Answers 2018 146

MERITS
Plus One Business Studies Previous Year Question Papers and Answers 2018 147

  • There is ease information as well as the closure of a business.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 148
  • Balanced decision making in partnership decision is taken by all partners.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 149
  • More funds In a partnership the capital is contributed by a number of partners.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 150
  • Sharing of risk like profit sharing losses also shared by partners.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 151
  • Secrecy Since partnership firm is not legal not required to publish its accounts and submits its reports, it can maintain the confidentiality of information relating to its operation.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 152

LIMITATION
Plus One Business Studies Previous Year Question Papers and Answers 2018 153

  • Unlimited liability
    Plus One Business Studies Previous Year Question Papers and Answers 2018 154
    The partners of a firm have unlimited liability the partners are jointly and individually liable for payment of debts.
  • Limited resources
    Plus One Business Studies Previous Year Question Papers and Answers 2018 155
    As there is a restriction on a number of members, capital contributed by them also limited.
  • Possibility of conflicts
    Plus One Business Studies Previous Year Question Papers and Answers 2018 156
    A difference in opinion on some issues may lead to disputes between partners
  • Lack of continuity
    Plus One Business Studies Previous Year Question Papers and Answers 2018 157
    The retirement death insolvency or insanity of any partner can bring an end to the business.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 158
  • Lack of public confidence
    Partnership firm is legally not required to publish its accounts and submits its reports, it results in a lack of public confidence in partnership.
    Plus One Business Studies Previous Year Question Papers and Answers 2018 159

Answer 32.
Functions of commercial banks
Plus One Business Studies Previous Year Question Papers and Answers 2018 160
1. Acceptance of deposits
Plus One Business Studies Previous Year Question Papers and Answers 2018 161
The commercial bank accepts deposits from the people. The different types of deposits area current account, savings account and fixed deposits.
Plus One Business Studies Previous Year Question Papers and Answers 2018 162

2. Lending pf funds
Plus One Business Studies Previous Year Question Papers and Answers 2018 163
ruemo Second major activity of commercial banks is to provide loans and advances out of the money received through deposits. These advances can be made in the form of overdrafts, cash credits, discounting trade bill etc.
Plus One Business Studies Previous Year Question Papers and Answers 2018 164

3. Cheque facility
Plus One Business Studies Previous Year Question Papers and Answers 2018 165
It is the very important service which is provided the customers by this one can any time collect theircheques and drawn on other banks. There are two type of cheques mainly a. bearer cheque and b. crossed cheque
Plus One Business Studies Previous Year Question Papers and Answers 2018 166
Plus One Business Studies Previous Year Question Papers and Answers 2018 167

4. Remittance of funds
Plus One Business Studies Previous Year Question Papers and Answers 2018 168
Another function of commercial bankis pro-viding the facility of fund transfer from one place to another, on account of the interconnectivity of branches.
Plus One Business Studies Previous Year Question Papers and Answers 2018 169

5. Allied services
Plus One Business Studies Previous Year Question Papers and Answers 2018 170
Besides these, a bank also provides allied services such as bill payments, locker facility, underwriting services, buying and selling of shares and debentures on instruction etc.
Plus One Business Studies Previous Year Question Papers and Answers 2018 171

Answer 33.
1. Retained earnings (ploughing back of profit)
Plus One Business Studies Previous Year Question Papers and Answers 2018 172
A portion of net earnings which are not distributed to shareholders but are retained in the business for use in the future, known as retained earnings.
Plus One Business Studies Previous Year Question Papers and Answers 2018 173

2. Trade credit
Plus One Business Studies Previous Year Question Papers and Answers 2018 174
Trade credit is the credit extended by one trader to another for the purchase of goods and services. It is a short term source of finance.
Plus One Business Studies Previous Year Question Papers and Answers 2018 175

3. Factoring
Plus One Business Studies Previous Year Question Papers and Answers 2018 176
It is the method of converting book debts into cash. It is the practice of raising funds by selling firms accounts receivables to another agency called factor. Factor charges fees for the services rendered.
Plus One Business Studies Previous Year Question Papers and Answers 2018 178

4. Lease financing
Plus One Business Studies Previous Year Question Papers and Answers 2018 179
A lease is a contractual agreement whe-reby the owner of the asset (lessor grants the right to use the asset to a third party (lessee), in other words, it is ‘ rending of an asset for some specified period. The lessee has to pay a specified amount called lease rent to the lesser for the use of the asset,
Plus One Business Studies Previous Year Question Papers and Answers 2018 180

5. Public deposit
Plus One Business Studies Previous Year Question Papers and Answers 2018 181
The deposit data raised by the organization directly from the public are known public deposit rates of interest offered on public deposits are usually higher than those allowed by a commercial bank.
Plus One Business Studies Previous Year Question Papers and Answers 2018 182

6. Commercial paper
Plus One Business Studies Previous Year Question Papers and Answers 2018 183
It fs an unsecured promissory note issued by a firm to raise funds for a short period, ! varying from 90 days to 364 days rate of interest on a loan is fixed.
Plus One Business Studies Previous Year Question Papers and Answers 2018 184

7. Issue of shares
Plus One Business Studies Previous Year Question Papers and Answers 2018 185
The capital of a company is divided in to small units called shares. The capital obtained by issue of shares is known as share capital. The one who hold shares is called shareholder.
Plus One Business Studies Previous Year Question Papers and Answers 2018 186

A. Equity shares
do not enjoy preferential right in the matter of the claim of dividend or repayment of capital. They do not get a fixed dividend. They have the right to vote.
Plus One Business Studies Previous Year Question Papers and Answers 2018 188

B. Preference shares
Plus One Business Studies Previous Year Question Papers and Answers 2018 189
Capital raised by the issue of preferenceshares is called preference share capital. The preference shareholders enjoy a preferential right over equity shareholders in two ways:

  • Right to get a fixed rate of dividend,
  • right to claim repayment of capital in the event of winding up of the company.

Plus One Business Studies Previous Year Question Papers and Answers 2018 190

8. Debentures
Plus One Business Studies Previous Year Question Papers and Answers 2018 191
Debenture is an instrument issued by com’ pany raising long term debt capital, under its seal to acknowledge its debt. Debenture holders are creditors of the company . It bears a fixed rate of interest.

9. Commercial Banks
Plus One Business Studies Previous Year Question Papers and Answers 2018 193
Commercial banks provide loans and advances in the form of cash credit , over a draft, term loan, discounting of bill and letter of credit etc.
Plus One Business Studies Previous Year Question Papers and Answers 2018 194

10. Financial Institutions
Plus One Business Studies Previous Year Question Papers and Answers 2018 195
These are the institutions established by state and central government with the core objective of financing projects to bring rapid industrialization on a long term basis. It is also known as lending institution or development bank.
Plus One Business Studies Previous Year Question Papers and Answers 2018 196

11. International financing
Plus One Business Studies Previous Year Question Papers and Answers 2018 197
A. Commercial banks
Plus One Business Studies Previous Year Question Papers and Answers 2018 198
Commercial banks all over the world extend foreign currency loans for business purposes.
Plus One Business Studies Previous Year Question Papers and Answers 2018 199

B. International agencies and development banks
Plus One Business Studies Previous Year Question Papers and Answers 2018 200
A number of international agencies and development banks are provide long and medium-term loans and grants to promote the development of economically backward areas in the world.
Plus One Business Studies Previous Year Question Papers and Answers 2018 201

C. International capital markets
Plus One Business Studies Previous Year Question Papers and Answers 2018 202
1. Global Depository Receipts (GDR’s)
Plus One Business Studies Previous Year Question Papers and Answers 2018 203
It is a negotiable instrument issued abroad by an Indian company to raise funds in foreign currency and it is traded on a foreign stock exchange. The local currency shares : of a company delivered to depositary bank thereafter depository bank issue depository receipts against these shares. Such deposi-tory receipts denominated in US dollars are known as GDRs. The holder of GDR can at any time convert it into a number of shares it represents. They are entitled to the dividend but do not carry any voting rights
Plus One Business Studies Previous Year Question Papers and Answers 2018 204

2. American Depository Receipts (ADR’s)
Plus One Business Studies Previous Year Question Papers and Answers 2018 205
The depository receipts issued by a company in the USA are known as ADRs. It can be issued only to American citizens and can be listed and traded on a stock exchange in the USA.
Plus One Business Studies Previous Year Question Papers and Answers 2018 206

3. Foreign currency convertible bonds (FCCB’s)
Plus One Business Studies Previous Year Question Papers and Answers 2018 207
They are equity linked debt securities that are to be converted into equity or depository receipts after a specified period. The FCCB’s are issued in a foreign currency and carry a fixed interest rate. These are listed and traded in the foreign stock exchange and similar to the convertible debenture issued in India.
Plus One Business Studies Previous Year Question Papers and Answers 2018 208

Plus One Business Studies Previous Year Question Papers and Answers

Leave a Comment

error: Content is protected !!