K.R.

MANGALAM WORLD SCHOOL, VAISHALI

SUBJECT: BUSINESS STUDIES (054)
TERM II (2021-22)
Class XI

Time Allowed: 2 Hours Max.Marks:40

General Instructions:
1. This is a Subjective Question Paper containing 12 questions. All questions are
compulsory.
2. This paper contains 4 questions of 2 marks each, 4 questions of 3 marks each and 4
questions of 5 marks each.
3. 2 marks questions are Short Answer Type Questions and are to be answered in 30-50
words.
4. 3 marks questions are Short Answer Type Questions and are to be answered in 50-80
words.
5. 5 marks questions are Long Answer Type Questions and are to be answered in 80-120
words.
6. This question paper contains Case/Source Based Questions.

1. (i) Funds required to purchase ……………. is called fixed capital requirement.

(ii) …………………….. are also known as residual owners, since they receive what
is left after all the other claims of the company’s income and assets have been settled.
(2)

2. (i) Match the following sources of finance on the basis of their Merits:
(I) Trade credits a) only limited amount of funds can be raised
(II) Public Deposits b) is a convenient and continuous source of funds
c) it is not having any charge on the assets of the
company
d) it is difficult for the new businesses to raise the funds

(ii) Match the following financial instruments on the basis of features: (2)
SIDE A SIDE B

a. Democratic control over the a. Retained earnings

management of the company

b. Do not enjoy the voting b. Equity shares

rights

c. Preference shares
3. (i) Intellectual property rights related with creativity of mind is being given for
………………..

(ii) ……………. any word, name or symbol that lets us identify the goods or services
made by an individual, company etc. (2)

4. (i) On the basis of services of wholesaler to retailer, match the following:

1. Undertake advertising and other a. Risk sharing

sales promotion activities
b. Availability of goods
2. Helps them to manage their
business with relatively small c. Grant of credit
amount of working capital
d. Marketing support
3. Maintain adequate stock of
commodities to offer variety to
customers

(ii) Which of the following is known as the ‘Risk Capital’ from company’s prospects?
(a) Debentures (b) Preference shares
(c) Equity shares (d) Retained earnings
(2)
SECTION B
5. Quest Corp, a company dealing in electronics is planning to expand their business on
account of growing demand of consumer’s electronics. So the company requires
additional funds. The finance manager reported that company is not in a position to
bear extra burden of explicit cost and equity shareholders insisted not to issue more
shares as there is risk of losing control.
On the basis of the given information about Quest Corp., answer the following
questions:
(a) Suggest a source of owner’s fund most suitable for the company.
(b) State the merits of source of owner’s fund identified in part (a). (3)
6. State with reasons whether the followings statements are True or False:
(a) Equity shareholders are to be given dividend irrespective of the fact whether the
company has earned sufficient profits or not.
(b) Debenture holders are paid interest only when the company earns sufficient
profits.
(c) Preference shares create a charge on the assets of the company. (3)
7. Ethos Limited is an authorised retailer selling several luxury watch brands. Every
watch that Ethos sells comes with the brand warranty and also places its Ethos stamp.
Well trained staff and great looking boutiques ensure that Ethos makes shopping for
watches an enjoyable and unforgettable experience. Now, Ethos Limited with an
outlet of watches exclusively for men at Lajpat Nagar, Delhi, is planning to open
 more branches in Delhi to meet the increasing demand. It operates with the policy of
cash sales and is very popular about the timing of the store.
On the basis of the given information about Ethos Ltd., answer the following
questions:
(a) Quoting the lines from the above paragraph, identify the type of retailing
business, Ethos Limited is planning to engage in.
(b) Explain any two features of the same business. (3)
8. Safe Electronics, an European company manufacturing washing machines wish to
expand its product line by launching new products in India namely air conditioners
and refrigerators. Out of the list of authorised dealers, the company selected a 25 year
old, electronic wholesale from whose proposal was very competitive. This wholesale
firm of washing machine took the services of Rohit Enterprises to sell washing
machines at competitive prices in Delhi. Rohit informed wholesale firm that the
consumer of Delhi wish to buy vacuum cleaner of same brand. He assured wholesale
firm that he will take appropriate steps to implement the company's promotional
schemes and offers from time to time.
On the basis of the given information about Safe Electronic, answer the following
questions:
(a) Explain two services rendered by Rohit Enterprises to wholesale firm which
are highlighted in the above case.
(b) Explain two services rendered by Rohit Enterprises to the consumers. (3)
9. ITC limited challenge Britannia Industries Limited for the use of their trade secret of
no added sugar and no maida in a range of their biscuits name Sunfeast Farmlite
biscuits. As per the former company, later company's product Nutrichoice Digestive
Zero was also a no added sugar and no maida product and also had a packaging which
was deceptively similar to product packaging of Sunfeast Farmlite. Allegedly, both
the products were being sold in the colour combination of Yellow and Blue.
On the basis of the given information about ITC Ltd., answer the following questions:
(a) Identify and explain the concept of business protection laws can help ITC limited
to protect themselves against Britannia Industries?
(b) What is the basic purpose served by the above identified concept? (5)
10. India, known as the home of spices, boasts a long history of trading with the ancient
civilizations of Rome and China. Today Indian spices are the most sought-after
globally, given their exquisite aroma, texture, taste and medicinal value. India is the
world's largest producer, consumer and exporter of spices; the country produces about
75 of the 109 varieties and accounts for half of the global trading in spices.
Top spices produced in the country include pepper, cardamom, chilli, ginger,
turmeric, coriander, cumin, celery, fennel, dill seed, garlic, clove and nutmeg among
others. Major importers of Indian spices are USA, China, Vietnam, UAE, Indonesia,
Malaysia, UK, Sri Lanka, Saudi Arabia and Germany.
On the basis of the aforesaid information about spices, answer the following
questions:
(a) Explain the two benefits available to the Indian business firms who are
engaged in spice export.
 (b) How do the different nations engaged in trade of Spices stands to gain? (5)
11. VTM textile mills is one of the largest manufacturer of various types of textile
products from Ahmedabad, Gujarat. The company is equipped with state-of-the-art
dyeing, printing and processing and garmenting facilities. Due to slackness in the
market demand, company is facing shortage of funds.
The company needs fund for meeting its day to day expenses like daily wages and
overheads etc. The finance manager of the company approached one of its supplier to
grand 2 months credit on purchase of raw cotton. This would enable the company to
get cotton supplies without making immediate payment.
On the basis of the given information about VTM Textile Mills, answer the following
questions:
(a) identify and explain the source of finance highlighted in the above case.
(b) Explain any four merits of the source of finance identify in part (a). (5)
12. Sarthak is dealing in goods on larger scale. He buys the goods directly from the
manufacturing industries in bulk and supply the same to the shops in the local areas.
He is not dealing with the customers directly. He even provides financial support to
manufacturer, by providing advance while placing order. Sarthak maintains huge
quantity of stock, due to which he has to maintain large amount of capital.
On the basis of the given information about Sarthak, answer the following questions:
(a) Which type of business Sarthak is engaged in?
(b) Name the parties between which Sarthak is acting as a Linking pin.
(c) Discuss the services rendered by Sarthak to manufacturers identify in part (b).
(5)