BUSINESS STUDIES (054)

CLASS XI
ANSWER KEY FIRST TEST 23-24

1 MARKER
1. Answer the following Multiple-Choice questions. Write the correct choice in
the answer sheet.
(i) Name the Hundi payable to the presenter or bearer of it.
(A) Shah Jog (B) Dekhan-har
(C) Firman Jog (D) Jokhmi

(ii) Name the trade centre, which was the headquarter of foreign traders.
(A) Varanasi (B) Tamralipti
(C) Kaveripatta (D) Mithila

(iii) Prit joined a partnership firm in the year 2018 as a partner. As per the
provisions of the firm she joined, her liability was limited in the firm along with
some partners except for one. Which of the following type of partnership is
referred to in the above case?

(A) Partnership at will (B) Particular Partnership

(C) General Partnership (D) Limited Liability Partnership

(iv) Nilesh is presenting himself as a partner of XYZ Associates through his

conduct. Clients dealing with the firm accept him as a partner due to his self-
acclaimed attitude. What type of partner Mr. Nilesh is referred to in the above
case?

(A) Dormant Partner (B) Partner by Estoppel

(C) Partner by holding out (D) Active Partner

(v) Which law governs the Joint Hindu Family Business?

(A) Hindu Law, 2002 (B) Hindu Undivided Law, 1994
(C) Hindu Family Law, 1965 (D) Hindu Succession Act, 1956

(vi) Assertion: (A) Sole trading concern is treated as "ONE MAN SHOW".
 Reason: ( R ) It is owned, controlled, managed & operated by the owner all
alone.
(A) Both (A) & (R) are true. R is the (B) Both (A) & (R) are true. R is not
correct explanation of A. the correct explanation of A.

(C) A is correct, but R is incorrect. (D) A is incorrect, but R is correct.

(vii) Among the following documents, which are not mandatory to be submitted to
the registrar along with an incorporation application by the pvt.co.?

(A) Address of Registered office (B) Statement of capital

(C) List of Directors (D) List of directors & statement of
capital

(viii) If a company can make arrangements for raising the capital privetely, so
that public appeal is unnecessary, the company is required to prepare a
__________
(A) Prospectus (B) Statement in lieu of Prospectus
(C) Certificate of Prospectus (D None of the above
)

(ix) Which is not true in case of a One Person Company?

(A) No person shall be eligible to
incorporate more than a One
Person Co.
(C) An Indian citizen or/and
resident of India is eligible to
incorporate a One Person Co.
(B) Minor can become a member
of a One Person Co.
(D Such company can be
) incorporated or converted into
a company under section 8 of
the Act.

(x) A person gets a stock worth Rs. 50,000 insured for Rs. 70,000. A fire
occurs and the whole stock gets damaged. The insurance company
admits a claim of Rs. 50,000 only and not Rs. 70,000. Identify the
principle of Insurance being applied?
(A) Principle of Indemnity (B) Principle of subrogation
(C) Principal of contribution (D Principle of Insurable interest
)
(xi) Which of the following financial instrument can never be dishonoured as
it is issued by bank after receiving the payment?
 (A) Cheque (B) Bill of exchange

(C) Demand draft (D Promissory note

)
(xii) Which of the following is not a contract of Indemnity?
(A) Marine Insurance (B) Life Insurance
(C) Fire Insurance (D All of the above
)

(xiii) Select the services not offered by e-banking.

(A) ATM (B) NEFT & RTGS
(C) Pos & EDI (D NFT & EDT
)

(xiv) Assertion: (A) The subject matter of life insurance is human life.
Reason: ( R ) Marine Insurance has the element of protection only.
(A) Both (A) & (R) are true. R is (B) Both (A) & (R) are true. R is
the correct explanation of A. not the correct explanation of
A.
(C) A is correct, but R is incorrect. (D Both (A) & (R) are incorrect.
)

(xv) Responsibility towards the government is________

(A) Safety of investment provided (B) Pay taxes regularly &
to shareholders honestly
(C) Protect the natural (D Both (B) & (C)
environment )

1. 16. Primary Industry:

These include all those activities which are concerned with the extraction and
production of natural resources and reproduction and development of living
organisms, plants, etc. It is further divided as follows:

a) Genetic Industry:
  These industries are engaged in breeding plants and animals for their use
in further reproduction.
 Examples: Cattle breeding farms, poultry farms, plant nurseries,
honeybee breeding and fish breeding, etc.

b) Extractive Industry:
 These industries extract or draw products from natural sources.
 They supply some basic raw materials which are transformed into useful
goods by manufacturing industries.
 Example: Farming, mining, lumbering, hunting, fishing, etc.

17.
a) The occupation in which Latika is engaged is Employment.
b) The features of employment are:
I. The employee is required to perform work as per service contract or rules
of service.
II. The employee is required to possess qualification and training as
prescribed by the employer.
18. Types of Bank Accounts:
1. Current A/C:

 This type of bank account is mostly opened by businessmen. Associations,

Institutions, Companies, Religious Institutions and other business-related works,
the current account can be opened.
 There is no fixed number of times that money can either be deposited or
withdrawn from such accounts.
 Overdraft facility is available for current bank accounts
 There is no interest that is paid on such accounts

2. Saving A/C:

 There is no limit to the number of times the account holder can deposit money in
this account but there is a restriction on the number of times money can be
withdrawn from this account.

3. Recurring A/C:

 Any individual or an Institution can open a recurring deposit account either

separately or jointly
 Periodic or monthly instalments needs to be added in the account.
  The range of months for which an RD account can be opened varies from 6
months to 120 months

4. Fixed Deposit A/C:

 It is a one-time deposit and one time take away account. Under this type of
account, the account holder needs to deposit a fixed amount of sum for a fixed
time period
 The amount deposited in FD account can only be withdrawn all at once and not
in instalments
 Banks pay interest on the fixed deposit account
 The rate of interest depends upon the amount you deposit and for the time
duration of the FD.

19.
Following are the advantages of e- business :
(a) Digital payment and transparency
(b) 24*7 Services
(c) Convenience
(d) Financial discipline
(e) Unlimited access
(f) Less risk .

20. Explain Any three points: (1 mark

each)
Top management commitment
Publication of a code
Establishment of compliance mechanisms
Involving employees at all levels
Measuring results

5 MARKER

21.a. “He used to pull the output of all the individual members and took it to the city
to sell the output at best possible price.” (1)
b. Marketing cooperative societies: (Any 3 points: 1 mark each)
  Such societies are established to help small producers in selling their
products.
 The members consist of producers who wish to obtain reasonable prices for
their output.
 It aims to improve competitive position of its members by securing a
favourable market for the products.
 It pools the output of individual members and performs marketing functions
like transportation, warehousing, packaging, etc., to sell the output at the best
possible price.
 Profits are distributed according to each member’s contribution to the pool of
output.

22. Functions of promoter: (1 mark for explaining each point)

Name approval:
 The promoters must select a name for the company and apply to the registrar for its
approval.
 The proposed name may be approved if it is not considered undesirable; if it is not
identical with the name of any existing company, or the name is not misleading.
 Three names, in order of their priority are given in the application to the Registrar of
Companies.
Fixing up signatories to the MOA:
 Promoters have to decide about the members who will be signing the Memorandum
of Association of the proposed company.
 Usually, the people signing memorandum are also the first Directors of the
Company.
 They must give written consent to act as Directors and take up the qualification
shares.

Appointment of professionals:
 Certain professionals are appointed by the promoters like auditors, merchants,
bankers, CAs, advocates etc. to assist the promoters in the preparation of
necessary documents at the time of registration.
Preparation of necessary documents:
 The promoter takes up steps to prepare certain legal documents which are to be
submitted to the registrar of the companies for getting the company registered.
 The documents to be submitted are Memorandum of association, Articles of
association, Consent of directors, etc.

23.Intra-B Commerce: (Any 4 points: 1 mark each)

 Intra B commerce refers to the interactions and dealings which take place
between different departments or people of the same firm.
  It gives benefits of efficient inventory and cash management, greater
utilization of plant and machinery, effective handling of customers’ orders, and
effective human resource management.
 Intranet facilitates well-informed decisions, better coordination, faster
decisions and speedier workflows among organizational units.
 E.g., marketing department to interact constantly with the production
department and inform them about the preferences and requirements of the
customers.
 A firm’s interactions with its employees, is referred to as B2E commerce.
Companies can conduct meetings, personnel recruitment, interviewing and
selection, training and development, submission of reports, etc.

24.Explain any four: (1 mark each)

Justification for existence and growth
Long term interest of the firm
Avoidance of government regulation
Availability of resources with business
Better environment for doing business
Holding business responsible for social problems

6 MARKER

25.Banking “lacks the required funds”

Transportation “home delivery services”
Advertisement “products to get popular”
Insurance “secure her shop”
(1/2 mark for identification and 1 mark for explanation)

 26. Merits:
Balanced decision making, More funds, Sharing of risks
Demerits:
Unlimited liability, Possibility of conflicts, Lack of continuity (1 mark for
explaining each point)

27. Capital Subscription: (1 mark for explaining each point in

brief)
1) SEBI Approval:
 A public company inviting funds from the public must make adequate
disclosure of all relevant information and not conceal any material
 information from the potential investors. This is necessary for protecting
the interest of the investors.
 This, prior approval from SEBI is required before going ahead with raising
funds from public.

2) Filing of Prospectus:
 A copy of the prospectus or statement in lieu of prospectus is filed with the
Registrar of Companies.
 Investors make up their minds about investment in a company primarily
based on the information contained in this document.
 Hence there must not be a misstatement in the prospectus and all material
significant information must be fully disclosed.

3) Appointment of Bankers, Brokers, Underwriters:

 Bankers are appointed so that the money from the application shares can
be received and deposited in a bank.
 Brokers sell the shares by distributing the forms and encouraging the
public to apply for the shares.
 In case the company is not sure of good public response they may appoint
Underwriters, who undertake to buy the shares if not subscribed by
public, for a commission.

4) Minimum Subscription:
 According to the Companies Act, company must receive applications for
a certain minimum number of shares before going ahead with the
allotment of shares.
 In case the company does not receive share applications for an amount of
90% of the issued capital, then it cannot allot shares and the application
money must be returned to the applicants.

5) Application to Stock Exchange:

 An application is made to at least one stock exchange for permission to
deal in its shares or debentures.
 If such permission is not granted before the expiry of ten weeks from the
date of closure of subscription list, the allotment shall become void.
 All money received from the applicants will have to be returned to them
within eight days.

6) Allotment of Shares:
 Application money received should remain in a separate bank account
and must not be used by the company till the shares are allotted.
 In case the number of shares allotted is less than the number applied for,
or where no shares are allotted to the applicant, the excess application
money is to be returned to applicants.
 Allotment letters are issued to the successful allottees.
  ‘Return of allotment’, signed by a director or secretary is filed with the
Registrar of Companies within 30 days of allotment.

 28. a. Subrogation: 3 marks

 It refers to the right of the insurer to stand in the place of the insured, after
settlement of a claim.
 After the insured is compensated for the loss or damage to the property
insured by him/her the right of ownership of such property passes on to the
insurer.
 This is because the insured should not be allowed to make any profit, by
selling the damaged property or in the case of lost property being
recovered.
 E.g., Goods are insured for ₹1 lakh and damages are worth ₹90,000 and
goods worth ₹10,000 are saved then insurance company has right over
saved goods if it pays full amount of ₹1 lakh.

 b. Contribution: 3 marks
 In case of double insurance, the insurers are to share the losses in
proportion to the amount assured by each of them.
 When there is more than one policy on the same property, the insured will
have no right to recover more than the full amount of his actual loss.
 If the full amount is recovered from one insurer the right to obtain further
payment from the other insurer will cease.
 E.g., If a person gets his house insured against fire with insurer A for ₹15
lakh, with B ₹10 lakh. There is a loss of ₹7 lakh. Then A is liable to pay
₹4,20,000 and B is liable to pay ₹2,80,000. Both insurance companies will
pay the compensation in the ratio of 3:2.