11th Commerce Study Materials English Medium PDF Download

ww..
w
w ..
wwww wwww
www.Padasalai.Net www.CBSEtips.in
N Neett N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa aaddaassaa
aaddaassaa
ww. P
. P w
w .P.P
www XI COMMERCEwww
w w
Study Material 2022/2023
N Nett
e N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aaddas
a aa
s
a
Prema Samuel , M.Com, M.Edd
a daa ssaa
. P
.P . P P
. Chennai
.N
w w
w w w w
www www
MCC Matr. Hr. Sec. School,
l a
l i
a N
.i. Neett
lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa aaddaasaa
s
aaddaassaa
ww. P
. P w
w . P
. P
w
www w
www
da
Pa
N Neett N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa ad
adaassaa
aaddaasaa
s
w.
ww. P
. P w
w . P
. P
w
www w
www
ww
N Neett N Neett
l a
l i
a .i. l a
lai.i. l a
l i
a
assaa aaddaasaa
s
ad
a a
d s
a aa
s
w
w .P. P w
w. P
. P
w
www w
www
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
Kindly send me your district question
PP d
aa
papers to our whatsapp number: 7358965593
ww.. w
w ..
wwww wwww
N Ne ett MCC Matric. Hr. Sec. School, e

N N ett
lalai .i. l a
l i
a .i. Chennai.
l a
l i
a
assaa Lesson 1- HISTORICAL BACKGROUND ssaa ssaa
11 COMMERCE th
aaddaa aaddaa
w w. P
. P OF COMMERCE IN THE SUB-
w
w .P.P
CONTINENT
w
wCORRECT ANSWER:
wwTHE
I. CHOOSE
w
www
1. In Pandiya Dynasty the place where the goods are sold is ______________
NN e
(a) t t (b) Market (c) Nalangadi (d) AllangadiNNeet t
e
Angadi
lalai.i. 2. Hindrance of place is removed by _____________

l a
l i
a .i. l a
l i
a
et
assaa (a) Transport (b) Warehouse a (c) d
a d a s
a s
Salesman
a(d)aInsurance
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w
3. Who wrote "Arthasasthra"?
w
w (c) Thiruvalluvar (d) Elangovadigal wwwww
(a) KautilyawwChanakiya
(b)
lai
4. Trade and Commerce was common to ____________ Dynasty.
NN e e tt
(a) Pallava (b) Chola (c) Pandiya (d) Chera
N Ne e tt
l a
l i
a .i. 5. _________ was first sultan who paved waylalinaithe.i.dense forest and helped traders to l a
l i
a
sa
assaa move from one market place to otherss
a d
a d aa saafor their commercial caravans.
place
a a ddaassaa
w w . P
.
(a) Balban (b) Vascoda Gama
P (c) Akbar (d) Alauddin Khilji
w w . P
. P
w
ww ANSWER QUESTIONS wwww
da
II. VERY w SHORT

1. What is meant by Barter system?
Goods were exchanged for goods before the invention of money. To carry on Barter System,
Pa
N Neett
the following conditions must be fulfilled :
N Nee tt
l a
l i
a .i. • Surplus Stock
l a
l ai .i. l a
l i
a
assaa aa aa
• Double coincidence of wants
• Personal Meeting
d da as s ddaass
a a aa
w.
w w . P
. P w
w . P
. P
ww w
* The place where w
2. What is meant by Nallangadi?
the goods were sold was called ‘Angadi’. w
w w
w
ww
*Day market was called as Nallangadi.
NNe ett
3. What is meant by Allangadi?
N N e ett
l a
l i
a .i. *The night market was called as Allangadi.
l lai.i.
*The place where the goods were sold was called ‘Angadi’.
a l a
l i
a
assaa III. SHORT ANSWER QUESTIONS: a adda assaa
ad
a a
d s
a aa
s
ww .P P
.the term “Vanigam”. w
w. P
. P
w ww
1. Explain the meaning
w of
w www
*The word vaniyam or vanipam would have had a Dravidian origin.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t early Tamils produced their products and goodsNNinetheir

e t t lands and bartered their
lalai .i. surplus.
*The
l a
l i
a .i. l a
l i
a
assaa Thirukkural. d d aa
*The word ‘Vanigam’ has been widely
aa
ssaa
used in sangam literature like Purananuru and
a d
a a
d s
a aa
s
w w . P
. P w w .P. P
ww w w
2. State the meaning of Maruvurapakkam and Pattinapakkam.
w w w w
i). Maruvurpakkam:
*Poompuhar had the ‘Maruvurappakam’ (inland town).
NN ee t t N N e et tfor the purpose of selling or

lalai.i. buying different commodities and food stuff. lalai.i.
*It had market and bazaars where many merchants met
l a
l i
a
et
assaa ii). Pattinapakkam: a a d daas aa
s
a ad a
d s
a aa
s
. P
is a .
P . P
. P
.N
➢ Pattinapakkam
➢ Theyw w w w w Coastal town.
ww w w
w
were w w
engaged in different kinds of fishing pearls, and conches
salts and built ships.
and produced
lai
3. What are the ports developed by Pandiya kingdom?
NNe et
➢ tPort towns like Tondi, Korkai, Puhar and Muziri were
N N ee talways
t seen as busy with
l a
l i
a .i. markets to imports and exports. lalai.i. l a
l i
a
sa
assaa ➢
a as aa
s a
Domestic trade used to Boats like ‘Padagu’,‘Thimil’,‘Thoni’,‘Ambu’,‘Odampunai’
➢ For foreign trade Kalam,aad d
etc.
a d
a d s
a aa
s
w w . PP Marakalam,
.QUESTIONS
Vangam, Navai etc.. were used.
w
w . P
. P
w w w w
da
IV. LONG ANSWER

w w
1. What are the hindrances of business?
w w
i. Hindrance of place
Pa
NNee
➢t tProduction takes place in one centre and consumers
N Ne et tspread throughout the country
l a
l i
a .i. and world. l a
lai .i. are
l a
l i
a
assaa ii. Hindrance
➢ Rail, air, sea and land transports s
a ad da a saathe products to the place of consumer.
bring
a ad d aasaa
s
w.
of time
w w . PP .
.products whenever they have money, time andwwillingness
w w P P
. to
www w
➢ Consumers want
www
ww
buy.
➢ Goods are produced in anticipation of such different regional centres.
➢ So that they can be distributed at the right time to the consumers.
NN e ett N N e e tt
l a
l i
a .i. ➢ Fire, theft, floods and accidents may bring
iii. Hindrance of risk of loss
l a
lai.i . l a
l i
a
assaa ➢ Insurance companies served
aa d
toa as s
cover
atheariskhuge
of
loss to the business.
such losses.
ad
a a
d s
a aa
s
w w . P
. P w
w . P
. P
ww
Advertising
w
iv. Hindrance of knowledge
w
and communication help in announcing the arrival of new
w w and their
wwproducts
uses to the people
N Neett
v. Hindrance of finance
N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et tand other financial institutions provide funds toNproducers

Ne e t t and traders to carry on the
lalai .i. business activities smoothly.
Banks
l a
l ai .i. l a
l i
a
assaa 2. State the constraints in barter a a d da as
system.saa
a a d a
d s
a aa
s
ww . P
i). Lack of double coincidenceP
.buyer and seller do not coincide, barter cannotw
of Wants
w w . P
. P
If the wants ofw
w w
w w both the
ii). Non – existence of common measure of value
w w take place.
It was difficult to compare the values of all articles as there was no common measure of
N Nett
e value
N Neett
lalai.i. l l i
a .i.
iii). Lack of direct contact between producer and consumers
a l a
l i
a
et
assaa aa aa
It was not always possible for buyers and sellers to meet each other for exchanging goods
for goods.
dd a as s d a
d s
a s
.
iv). Lack of surplus stock
P
.P a a . P
. Paa
.N
w w w www
If the buyers and sellers do not have surplus stock then barter cannot take place.
www
3. Briefly explain the coastal trade in ancient Tamilnadu.
www
lai
➢ The ‘Maruvurappakam’ and ‘Pattinapakkam’ had market and bazaars.
N Neett N Neett
➢ Port towns like Tondi, Korkai, Puhar and Muziri were always seen as busy
l a
l i
a .i. l l i
a .i.
markets with imports and exports.
a l a
l i
a
sa
assaa aa aa
➢ Coastal region people engaged in coastal trade and developed their
ddaass
intercontinental trade contacts.
ddaass
. P
. Paa . P Paa
➢ Boats like ‘Padagu’, ‘Thimil’, ‘Thoni’, ‘Ambu’ ‘Odampunai’ etc… were used
.
www w w
w
www www
da
in domestic trade.
➢ Kalam, Marakalam, Vangam, Navai etc.. were used for crossing oceans for
foreign trade.
Pa
NN e et t 2 - Objective of Business NNeet t

Lesson
l a
l i
a .i. I. CHOOSE THE CORRECT ANSWER l a
lai .i. l a
l i
a
assaa 1. The Primary objective of aabusiness ad d a as saa
aaddaasaa
s
w.
is
w w .
(a) Making Profit (b) Not PP
. of the above
making Profit
w
w . P
. P
(c) Special Skill w w
wwofw (d) None
www
ww
2. Occupation a Doctor is
(a) Employment (b) Business
(c) Profession (d) Sole Proprietor
N Neett N Neett
3. The following does not characterize business activity?
l a
l i
a .i. l aai
(a) Production of goods and services
l .i. (b) Presence of risk
l a
l i
a
assaa saa
s s aa
s
(c) Sale or exchange of goods and services (d) Salary or wages
aaddaa ad a
d a
4. Activities undertaken out of love and affection or with social service motive are
a
termed as:
w
w .P. P w
w. P
. P
w
www
(a) Economic activities
w
www
(b) Monetary activities
c) Non-Economic activities (d) Financial Activities
II. VERY SHORT ANSWER QUESTIONS
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN1.e e t t Economic Activities. NN e e tt

lalai .i. Activities undertaken with the object of earninglalmoney
Define
i
a .i.are called economic activities. l a
l i
a
assaa e.g. selling of fruits, working asaa a doctor.ss
d da a aa
aad d aassaa
w
2. What do you mean by
w . PP
. to earn profit through production, distribution,
Business?
w w . P P
.purchase
It is an economicw wservices” w
wwand
and sale of goods
activity undertaken
www
e.g. Sundar Stationery, Ramesh Bros., Britannia Industries
NN3.e
et t do you mean by Employment?
What
NN eett
lalai.i. Itofrefers to the occupation in which people work fori.
l a
l a i . and get remuneration in the form
others
l a
l i
a
et
assaa e.g. Manager, Clerk, Factory Workers, s s aa s aa
s
wages or salaries.
a ad da a
etc.
a ad a
d a
. P P
. QUESTIONS: . P
. P
.N
III. SHORT ANSWER w w w
w w w ww
w w
1. What do you mean by human activities?
ww
lai
Human Activity is an activity performed by human being to meet his needs and wants
N Neett N N ett
or may be for personal satisfaction. It can be categorised into economic and non-
e
l a
l i
a .i. economic activities
l a
l i
a .i. l a
l i
a
sa
assaa aa aa
I. Economic Activities are undertaken to earn money. E.g. Selling Fruits, Working
as a doctor.
ddaass ddaass
II.
. P
. Paa . P
. Paa
Non-Economic Activities are undertaken to satisfy social and psychological
w
w w
w
needs. E.g. Cooking food, celebrating festivals
w w w
w
da
ww w
w
2. Write short notes on: a) Business b) Profession
a) Business:
•
Pa
It is an economic activity undertaken to earn profit through production,
N Neett NN e ett
distribution, purchase and sale of goods and services”
l a
l i
a .i. • e.g. Sundar Stationery, RameshlBros.,
ala i .iBritannia
. Industries l a
l i
a
assaa b) Profession:
a ad da as saa
a d
a a
d s
a aa
s
w.
w
w
✓ Those who engage. P P
✓ Professions involve rendering
.in a profession are called professionals. Their w w w . P
is .
P
of personal services of a special and expert nature.
w
wwwFees. E.g. Doctor, Engineer, Lawyer, etc. www
Professional
income
ww
3. Explain the classification of a business.
N Neett N N ett
Business Activities are classified on the basis of size, ownership and function
e
l a
l i
a .i. I)
l a
lai.i. l a
l i
Activities on the Basis of Size – on the basis of size, Business may be grouped
a
assaa saa
s s aa
s
into two categories a) Small Scale b) Large Scale
aaddaa ad
a a
d a
a. Small Scale – business require less capital, as they carry business on small
w
w .P. P w
w. P
. P
scale. Eg. Manufacturing Matchsticks Industry, candle making, etc.
w
www w
www
b. Large Scale – business require huge capital, as they carry business on large
scale. Eg. Ramraj Cotton, Raymonds, etc.
II) Activities on the Basis of Ownership –
On the basis of ownership, business may be grouped into three categories, namely
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i.
a. Private Enterprises – are owned, managed and controlled by persons other
l a
l i
a
assaa aa aa
than government. E.g. J.K. Stores, IJS Stationery
d da a ss a
b. Public Enterprises – are owned, managed and controlled by government or any
d d s
a s
. P a a
of it’s agencies or both.
P
.STC (State Trading Corpn.) . P
. P aa
w w w w w w w
wbyw
E.g. ONGC,
ww
c. Joint Enterprises – are owned, managed and controlledw private persons.
e.g. Maruti Suzuki
NN e
III)et t on the basis of Function – on the basis ofNN
Activities e et t business may be grouped
functions,
lalai.i. into two categories, namely l a

l ai .i. l a
l i
a
et
assaa a a dd aas s
a. Industries – are production
aactivities
a of business.
a ad a
d s
a aa
s
. P P
.– are exchange of goods and services from www.
e.g. Bread, Butter, Cheese, etc.
. P P
.N
w w w w w
wwproducers
b. Commerce
to consumers
w w
lai
IV. LONG ANSWER QUESTIONS
N 1.e
N et t the characteristics of Business. N N e e tt
l a
l i
a .i. Explain
l a
l i
a .i. l a
l i
a
sa
assaa i. Production or Procurement of Goods: a
a ad d aa ss a
aaddaassaa
ii. Sale, Transferw ww P
➢ Goods must be produced
. . P or procured in order to satisfy human wants.
ww. P
. P
w w w
da
w w or Exchange:
➢ There must be sale or exchange of goods or services.
ww
➢ When a person weaves cloth for his personal consumption, it is not business because
Pa
N Ne e t t in Goods and Services:

there is no transfer or sale.
N N e ett
l a
l i
a .i. iii. Dealing
l ala i .i. l a
l i
a
assaa ➢ Goods produced may be consumer
a a d da a ssaa like cloth, pen, brush, bag etc.,
goods
supply of electricity, gas or water, transportation,ad
a a
d s
a aa
s
w.
w w .
banking, insurance. P
Services refer to activities
. P like
ww . P
. P
ww
iv. Regularity
w w
of Dealings: www w
ww
➢ The Business transactions must be regular.
NNeett
v. Profit Motive
N N eett
l a
l i
a .i. ➢ An important feature of business is profitlalmotive.
ai.i. l a
l i
a
assaa vi. Element a ad d as saamakes the people do business.
➢ It is in fact, the attraction of profit that
a a a ddaasaa
s
of Risk
Business w w w . P P w
w.
. risk like change in consumer preferences,wshortage PP
. of raw
materials,
w crisis, etc. which may result in loss. www
wwpower
Activity involves
2. Compare business with profession and employment
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa aaddaassaa
aaddaassaa
ww. P
. P w
w .P.P
w
www w
www
N Nett
e N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aaddas
a aa
s
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w
w www
www www
l a
l i
a NN e ett
lai
.i. 3. Discuss the objectives of business? lalai.i. NN e ett
l a
l i
a
sa
assaa i. Economic Objectives:
a a d da as saa
a ad a
d s
a aa
s
w w . PP
.best use of available resources.
Economic objective is earn profit, which includes creation of
ww . P
.
customers, P
regular
w w ww
da
w w
innovations and
ii. Social Objectives:
w w
❖ Objectives which are benefit to the society, should be achieved.
Pa
N Neett N N e tt
❖ No activity of business should give trouble to the society.
e
l a
l i
a .i. iii. Organisational Objectives:
l a
l ai .i. l a
l i
a
assaa aa aa
It is expansion and modernisations, supply of quality goods to customers, customer
satisfaction, etc.
d da as s ddaass
aa aa
w.
iv. Human Objectives:

w w . P P
. well being as well as fulfilment w
w . P
. P
wwww
Objectives aim at the w
www
ww
of expectation of employees, social and psychological

satisfaction of employees and development of
NNeett human resources.

v. National Objectives :
N Neett
l a
l i
a .i. National Objectives are providing employment
l alai.i. l a
l i
a
assaa d da as aa promoting
s
opportunities, paying tax to government,
aa ad
a a
d s
a aa
s
.
social justice, etc.
w w P
. P w
w. P
. P
Lesson 3w –w
w w
Classification of Business Activities w
w
ww
I. Choose the Correct Answer
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i. l a
l i
1)The industries engaged in extraction of iron ore are known as
a
assaa aa aa
(a)Construction Industries
ddaass
(b)Manufacturing Industries
ddaass
P aa
(c)Extraction Industries
. . P .P.Paa
www
(d)Genetic Industries
w w
w
www www
2)Production which involves several stages for manufacturing finished
products is known as
(a)Analytical Industry
(b)Synthetic Industry
N Nett
e (c)Processing Industry
N Neett
lalai.i. l a
l
(d)None of the abovei
a .i. l a
l i
a
et
assaa s aa
s s aa
s
3)Normally high level risk involved in
aad
(a)Industry
daa ad
a a
d a
. P
.P
(b)Commerce
. P
. P
.N
w w
w www
www www
(c)Trade
(d)All of the above
lai
II. Very Short Answer Questions
1)t t tt
i NNee Define Commerce
.i. Ans. : i N
.i. Ne e i
l a
l a l a
l a l a
l a
sa
assaa aad d aa s aa Operations deal with the buying and aassaa
s
According to Evelyn Thomas, “Commercial
of commodities and the contribution of finished ad
a d
products.”
ww . P
selling of goods, the exchange
. P w w . P
. P
w wmean by Industry ? w w
da
2) Whatw w
do you w w
Ans. :
• Industry refers to economic activities, which are connected with conversion of
Pa
N Neett resources into useful goods.

N Neett
l a
l i
a .i. l a
lai .i. l a
l i
• The production side of business activity is referred as Industry.
a
assaa aa aa
3) What is Trade ?
Ans. :
ddaass ddaass
aa aa
w.
ww. P
• Trade is an essential part of Commerce.
. P w
w . P
. P
• The term ‘trade’ is used to denote buying and selling.
w
www w
www
• Trade may be classified into internal trade and external trade.
ww
III. Short Answer Questions
NNeet t
1)what do you mean by tertiary industries ?
N Ne e tt
l a
l i
a .i. Ans. : l a
l ai .i. l a
l i
a
assaa * They do not produce goodsa
aa d d a s saa
ad
a a
d s
a aa
s
. P P
.industry and commerce.
* These industries produce
* They helpw w
utility services and sell them at a profit
w
w. P
. P
* wItww w banking, insurance, warehouse, etc. www
trade,
includes w
2)Write a short note on Transportation.
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet t• N Ne ett
lalai .i. • l l i
a .i.
Goods are to be sent to different places where they are demanded.
a l a
l i
a
assaa aa aa
The medium which men and materials from one place to another is called
transport.
dda as s ddaass
•
. P Paa
.QUESTIONS .P Paa
Rail, Air, Sea and Land Transports are the different modes of transport.
.
w w ww w
w w
w
w
IV. LONG ANSWER
w
1. Compare Industry, Commerce and Trade (any 5)
w
w
N Nett
e N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aaddas
a aa
s
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w
w www
www www
l a
l i
a N
.i. Neett
lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa aaddaasaa
s
aaddaassaa
ww. P
. P w
w . P
. P
w
www w
www
da
Pa
NNeett
2. Write a short note on :
N N e e tt
l a
l i
a .i. a) Analytical Industry : l a
lai .i. l a
l i
a
assaa d da a ss
* It analysis and separates different
a a
aelements
a from the same material.
a a ddaasaa
s
w.
* Example – An oilP P
and petrol,w w . . P
refinery
. . P
separates crude oil into kerosene, gasoline, diesel,
w w
oil
ww
b) Genetic w w:
Industry
etc.
www w
ww
* These industries are engaged in breeding plants and animals for their
use in further reproduction.
NNeett N e ett
* The Nursery, Poultry, Dairy, Hatcheries, Fisheries, etc.
N
l a
l i
a .i. c) Construction Industry : l a
l ai.i. l a
l i
a
assaa a a d da as saa
a a d a
asd
s
a aa
s
w w P. P
These industries are involved
. w w . P
. P
in the construction of building, dams, bridges, roads,
w w w w
well as tunnels and canals.
w ww w
LESSON 4 - SOLE PROPRIETORSHIP
N Neett
I. CHOOSE THE CORRECT ANSWER
N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN1.ee t t is the oldest form of Business organisation?NNeet t

lalai .i. a) Sole Proprietorship b) Partnership lalai.i.
Which
l a
l i
a
assaa c)2. InCo-operative Society d) Company ss
aa dd aa aa
aaddaassaa
a) Joint Enterprise
w w . P
which form the owner, establisher
P
b) Government
and manager is only one?
.d) Sole Proprietor
Company
w
w .P.P
w
www of sole proprietor-ship is ______ www
c) Co-operative Society
3. A major disadvantage
w
a) Limited liability b) Unlimited liability
c) Easy Formation d) Quick decision
N Nett
e N eett
4. From the following which one is Non-corporate form of business?
N
lalai.i. a) Joint stock company
l a
l i
a .i.
b) Sole trading business
l a
l i
a
et
assaa s aa
s s aa
s
c) Government company d) Co-operatives
aa ddaa ad
a a
d a
. P
.P . P
. P
.N
w w w www
wwaw
1. Who is called Sole Trader? www
ANS. :
l a
l i
a N
.i. Neettcalled Sole Trader.
lai l a
l i
a N
.i. N ett
➢ A Business Organisation which is owned and controlled by a single individual is
e
l a
l i
a
➢ It is also known as Sole Proprietorship or individual entrepreneurship.
sa
assaa 2. What are the Non-corporateaaenterprises?
ddaassaa
aaddaassaa
w w . P
. P w
w . P
. P
w
w are w
www
da
ANS. :
wwenterprises
Non-corporate
➢ Sole Trading concern
Pa
NN e ett
➢ Partnership Firms
N Neett
l a
l i
a .i. 3. What are the Corporate enterprises? lalai.i.
➢ Joint Hindu Family Business
l a
l i
a
assaa ANS. : a ad da a ssaa
aaddaasaa
s
w.
w w . P
. P w
w . P
. P
www w
Corporate Enterprises are
w
www
ww
(A)Government
i)Public Undertaking
NN e et tii)Public Utilities N Neett

l a
l i
a .i. (B)Private l a
lai.i. l a
l i
a
assaa i)Joint Stock Companies d
aa a
d s
a aa
s
ad
a a
d s
a aa
s
w w .P. P w
w. P
. P
(C)Co-operative
III. SHORTw
ww QUESTIONS
wANSWER w
www
1. How is it possible to maintain secrecy in Sole Proprietorship?
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe et t: N N e ett
lalai .i. ➢ Since the sole trader manages all thelaffairs
ANS.
al i
a .i.of the business, the secrecy can be l a
l i
a
assaa maintained easily.
➢ The sole trader isP a ad d a a s saa
a d
a a
d s
a aa
s
w w . . P
not bound by law to publish his business account.
w w . P
. P
w
wwwliability?
➢ It enables him
2. What is unlimited
www w
to keep all the information related to business confidentially.
ANS. :
NNeet tThe liability of the sole trader is unlimited NNeet t

➢
lalai.i. ➢ When business assets are not sufficientltoalapayi.ibusiness

. debts he has to pay from his
l a
l i
a
et
assaa 3. Givepersonal property
a a dd a a s saa
a ad a
d s
a aa
s
. P
. P
examples of Sole trading business.
. P
. P
.N
w w w w w w w w
ANS. :
w w
Examples of Sole Trading is
w w
lai
➢ Grocery Shops
N Neett ➢ Medical Stores

N Neett
l a
l i
a .i. ➢ Stationery Shops
l a
l i
a .i. l a
l i
a
sa
assaa s aa s aa
➢
➢
Beauty Parlour
d a
d a s ddaa s
Sweet Stalls
. P P a a
.QUESTIONS . P
. Paa
IV. LONG ANSWER
w w w w
w of Sole trading business. (any 5) www w
w
da
wwcharacteristics
1. Explain the
ANS. :
Pa
NN e ett N Neett
Following are some of the characteristics of Sole Trading Business:
l a
l i
a .i. i) Ownership by one man l ala i .i. l a
l i
a
assaa d da
➢ This is owned by single person
a a
s
a s aa
aaddaasaa
s
w.
. PP
and.manager of the entire business
➢ The Sole Trader contributes
ww
Capital
w
w . P
. P
w w
➢ He is the owner
ii) Freedomw ofw
w
www
ww
Work and Quick Decision

• As he is the only owner of his business, he need not consult anybody in decision
N Ne e tt making
N Ne e tt
l a
l i
a .i. • Hence he can take quick decision
l a
lai .i. l a
l i
a
assaa iii) Unlimited Liability
When Business Assets are aa d da as saa
a d
a a
d s
a aa
s
personal property. w w .P. Pnot sufficient
ww . P
. P
to pay business debts, he has to pay from his
iv) Enjoyingw
w
wwProfit
Entire www w
➢ He enjoys all the profits of his hard work.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe t
➢ tAs there is no one else to share the profit with, He e
e N N et t enjoys the full profit of the
lalai .i. business. l a
l ai .i. himself
l a
l i
a
assaa v) Maintenance of Secrecy aaddaassaa a a dd aassaa
Since the sole trader.P
. P . P
. P
w w w manages all the affairs of the business, the secrecy
w w
w
can be www easily.
maintained www
2. What are the advantages of Sole trading business? (any 5)
NN eett
ANS. :
NN e e tt
lalai.i. The advantages of Sole Trading Business arelal: ai.i. l a
l i
a
et
assaa i)Easy Formation a ad da as saa
ad
a a
d s
a aa
s
. PP .
.of doing business can start with necessary www. P
P
.N
w w
➢ No Legal formalities
w are required to start the business
www
➢ Any person
resources
capable
www
ii)Small Capital
l a
l i
a NNe e t
.i. relatives lai l a
l ai N
.i. N et tand
➢ tHe invests from his savings or borrows from his friends
➢ Sole Trader can start a business with small capital
e
l a
l i
a
sa
assaa iii)Credit Standing
Since his personal propertyacand
a da as saa
used to pay business debts he gets more financial ad
a a
d s
a aa
s
assistance from others .P P P P
be
w w . the Customers w w . .
w
wwwis small he can have personal contacts with the w www
da
(iv)Personal Contacts with

Since the business customers
(v)Flexibility
Pa
Since the business is small sole trader can easily change the nature and scope of business
N Neett
as and when required.
N Neett
l a
l i
a .i. l a
la i .i.
3. What are the disadvantages of Sole trading business?
l a
l i
a
assaa ANS. : aad da as saa
aaddaasaa
s
w.
w . P
.
The disadvantages of Sole
w P
Trading Business are :
w
w . P
. P
wwww
i) Limited Capital w
www
ww
Since the capital is contributed by a single person, business operations have to be done on
a limited scale
Nii)e
N et t Managerial Skill NN e e tt
l a
l i
a .i. Since the sole trader has to be perform all thelalmanagerial
Limited
ai .i. functions like sales, purchase, l a
l i
a
assaa marketing, etc., his managerialaability a d da a
is ssaato be limited.
bound
a a ddaasaa
s
iii) Unlimited Liability .P. P . P
. P
w w w w ww ww
w w
➢ The major disadvantage of sole trading is unlimited liability w
➢ If the business assets are not sufficient to pay off the business
w
debts, the sole trader has to pay from his personal property
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe
iv)e
tLack
t of Specialisation N N e ett
lalai .i. Since the business unit is small and the financial
l a
l ai .iresources
. are limited, experts in l a
l i
a
assaa different fields cannot be employeda ad dtoaas saamaximum advantages
secure
aa ddaassaa
v) Hasty Decisions .P. P . P
.P
w w w
wis more likely to take hasty decision as he needw ww w w
else.
ww
Sole Proprietor w
not consult anybody
N Neett N Neett
lalai.i. l l i
a .i.
Lesson 5 – Hindu Undivided Family & Partnership
a l a
l i
a
et
assaa I. CHOOSE THE CORRECT
aad da s
a saaANSWER
a d
a a
d s
a aa
s
. P P
. (b)Karta
1.The firm of Hindu Undivided family is managed by whom ?
. P
. P
.N
(a)Ownerw w ww
w w w w (d)Partner
(c)Manager w w ww
2.In the firm of Hindu Undivided family how one gets the membership ?
lai
(a) By Agreement (b) By Birth
N Neett N N ett
(c) By Investing Capital (d) By Managing
e
l a
l i
a .i. l a
l i
a .i.
3.The members in the Joint Hindu family are called ____
l a
l i
a
sa
assaa aa aa
(a)Karta (b) Coparceners (c)Generations (d) Partners
ddaass ddaass
4.’Only Male members in the family get the right of inheritance by birth’ as
_____
. P
. Paa . P
. Paa
ww
(a) Hindu Law (b) Mitakshara Law
w w w
w
www www
da
(c) Dayabagha Law (d) None of these

5. A Partnership is formed by _____
(a) Agreement (b) Relationship among persons
(c) the direction of Government (d) Friendship
Pa
N Neett N Neett
6. Registration of Partnership is _______
l a
l i
a .i. (a) Compulsory
l a
lai .i.
(b) Optional
l a
l i
a
assaa ssaa saa
s
(c) Not necessary (d) None of the above
ad
adaa a ddaa
7.A temporary partnership which is formed to complete a specific job during
a
w.
ww. P
. P .
a specified period of time is called ______
w
w P
. P
w
www w
www
(a) Partnership-at-will (b) Particular partnership
(c) Limited partnership (d) Joint Venture
ww
8.The Partnership Deed also called _____

(a) Articles of Association (b) Articles of partnership
N Neett (c) Partnership Act (d) Partnership

N Ne ett
l a
l i
a .i. l lai.i.
9. A Partnership is registered with ______
a l a
l i
a
assaa aa aa
(a) Registrar of Companies (b) Registrar of Co-operatives
d aa ss
(c) Registrar of Firms (d) District Collector
d d a
d s
a s
VERY SHORTa a aa
II.
1. Who is calledw
w .P P
.? ANSWER QUESTIONS
w
w. P
. P
Ans.w
:
w w w Karta
w www
➢ Karta is the senior most male member of the family
➢ He manages and controls all the affairs of a Joint Hindu Family
N Neett 2. What are the two schools of Hindu Law ?

N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeett : N N e ett
lalai .i. There are two schools of Hindu Law lalai.i.
Ans.
l a
l i
a
assaa aa
❖ Dayabhaga – Prevalent dda as saa
aaddaassaa
w w
❖ Mitakshara Law. PP
. ?
–
in Bengal and Assam
Prevalent in the rest of the country.
ww.P.P
w
w w w
3. Who is called a Partner
wwww
Ans. :
The persons who enter into partnership are individually called ‘Partner’
NNet
e t N Neett
lalai.i. Ans. :
4. Who is a Sleeping Partner ?
l a
l i
a .i. l a
l i
a
et
assaa d
➢ He contributes Capital
➢ But he does nota a da as s
and
aShares
a in the Profits or Losses of the firm aassaa
ad
a d
. P
.P take part in the management of the business.
. P. P
.N
w
manyw
w w w w w
5. Howw
w types of Dissolution ? www
Ans. :
t t
lai tt
Types of Dissolution
i N
.i. Nee i N
.i. N e e i
l a
l a i)Dissolution of Firm
l a
l a l a
l a
sa
assaa ii)Dissolution of Partnership ss
a ad d aa aa
aaddaassaa
w w . P P
.the order of the Court
i)Dissolution of Partnership firm is taken place in two ways :
w
w . P
. P
➢w w w
www
da
ww Without
➢ By order of the Court
Pa
N NeetAns.t : Following are three features of HUF NNeet t

1. Write any three features of Hindu Undivided Family
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa i) Governed by Hindu Law
ad
ada as :a
s a
The business of the Joint Hindu Family is
aaddaasa
s a
w.
controlled and managed under Hindu Law

ii)
w w
Management
*w
. PP
. of Joint Hindu Family business are controlled
:
w w . P
. P
ww w
by one person who is known as ‘Karta’ or ‘Manager’w
All the affairs
www and managed
ww
* Karta is the senior most male member of the family

iii) Membership by Birth :
N Neett N N e ett
• Membership is acquired only by birth.
l a
l i
a .i. l la i.i.
• As soon as a child is born in the family, he becomes a member.
a l a
l i
a
assaa ssaa s aa
s
2. What is the minimum and maximum number of members in the Partnership
firm ?
aaddaa aad a
d a
Ans. :
w
w .P. P w w . P
. P
w
www• Minimum number of persons required to formw
aw
w w
partnership is two.
• Maximum number of persons in a partnership is 50
• Partnership is the outcome of an agreement
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNee t
3. tWhat is the meaning of Partnership Deed ?
N Neett
lalai .i. Ans. : l a
l i
a .i. l a
l i
a
assaa aa s aaamong the partners.
s
• It is a written agreement
• It avoidsaa d d aaddaassaa
ww . P P misunderstandings.
. be properly stamped and registered. www.
• It should .PP
IV. LONGw
w
ww QUESTIONS
ANSWER www
1.What are the contents of Partnership Deed ?
Ans.t:tThe Contents of a Partnership Deed are tt
i NNee
.i. ➢ Name of the firm i N
.i. Nee i
lala l a
l a l a
l a
et
assaa a
➢ Nature of the business proposed
➢ Duration of partnershipa a dd a ssaa
ad
a a
d s
a aa
s
. P P
.partners . P
. P
.N
w w
➢ Capital contribution
w
of each partner
w on Drawings www
wInterest
➢ Rate ofw
➢ Withdrawal of the from the firm
www
➢ Loan from Partners
lai
➢ Salary and Commission of Partner
N Ne et t the types of Dissolution of Partnership Firm.

N Neett
l a
l i
a .i. 2.Explain
l a
l i
a .i. l a
l i
a
sa
assaa Ans. :
a ad da as saa
aaddaassaa
There are two types :
i)withoutw w w . PP
.of the Court and w
w . P
. P
w of Court w
www
da
ii)bywworder
the order
the
i) Without the Order of Court
a. By Agreement or Mutual Consent
Pa
N Neett N Neett
A firm may be dissolved when all the partners agree to close the affairs of
l a
l i
a .i. the firm.
l a
lai .i. l a
l i
a
assaa ssaa saa
s
b. By Insolvency of all the partners or one
aad da a
*If any of the partners adjudged an insolvent
aaddaa
w.
w
w . P
. P
*Or if all the partners become insolvent
w
w . P
. P
c.w
w
wwthe Objective becomes illegal
*It is necessary to dissolve the firm
w
www
ww
When
When the business of the partnership becomes illegal,
N Neett the partnership is automatically dissolved.

N N e e tt
l a
l i
a .i. d. By notice of Dissolution la l a i.i. l a
l i
a
assaa d
tod
a as saatawill, when any partners
In the case of partnership
a a ad
a a
d s
a aa
s
w w .P
dissolved.. P
gives in writing dissolve the firm, the firm will be
w
w. P
. P
w
www of the Court
ii)By the Order w
www
a) When a partner becomes insane
b) Permanent incapacity of any partner
N Neett c) Misconduct of any partner
N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet td) Transfer of Interest to Third Person NNeet t

lalai .i. e) Continued Loss l a
l i
a .i. l a
l i
a
assaa 3.Write the Procedure for Registration
a a dd a as saa
of a firm.
aaddaassaa
Ans. :
w w . P
. P w
w .P.P
A statementw
w w
wwthe following particulars should be preparedwww
stating
i)Name of the firm
NNe et t
ii)The Principal Place of Business
NN e ett
lalai.i. iii)Name of other places where the firm carried
l a
l i
a .i.business
on
l a
l i
a
et
assaa iv)Names and Addresses of all thea
aad d as saa
Partners
ad
a a
d s
a aa
s
P P
v)Date on which each .partner
. . P
. P
.N
w w w joined the firm
www
www
vi)The duration of the firm www
•
lai
This statement is signed by all the partners.
•
N Ne e tt •
N Neett
And submitted to the Registrar along with Registration Fee.
Any change in the above particulars must be communicated to the
l a
l i
a .i. l a
l ai .i.
Registrar within 14 days of such alteration.
l a
l i
a
sa
assaa Chapter 6 – Joint StockaCompany ad da as saa
aaddaassaa
Choosew w . P P
.Correct Answer w w. P
. P
I.
w w the
ww
da
w w w w
1. The relationship between outsiders and the company is defined in ______
a. Prospectus b. Articles of Association
Pa
NNe ett N Neett

l a
l i
a .i. 2. Table A of the Companies Act is a ______ lalai.i.
c. Memorandum of Association d. Certificate of Incorporation
l a
l i
a
assaa a ad d a assaa
aaddaasaa
s
w.
ww P
. P w
w . P
. P
a. Model minutes book b. Model form of Balance Sheet c. Model of AOA d. Model of MOA
.
www w w
www
3. Which of the following is created by a Special Act of Parliament or in State Assemblies?
ww
a. Chartered company b. Foreign company c. Government company d. Statutory company
4. The Board of directors of a company is elected by _______
NN e ett NN e tt
e
l a
l i
a .i. 5. Companies established as a result of a charter
a. Creditors b. Debtors c. Debenture holders
l a
la i.i. by the King or Queen of a
d. Share holders(members)
l a
l i
a
assaa country is called _________ aaddaassaa s aa
s
granted
ad
a a
d a
w w .P.
a. Chartered companies P b. Statutory companies
w w . P
. P
www w
c. Registered companies d. Foreign companies www w
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Ne tt
e N Neett
lalai .i. II. Very Short Answers :
l a
l i
a .i. l a
l i
a
assaa 1.Ans.What: are the different typesaaofdCompanies
daas aa?
s
aaddaassaa
ww . P
. P w
w .P.P
wwww
(I) On the basis of Incorporation w
www
➢ Chartered Companies
➢ Statutory Companies
N Nett
e
➢ Association Not for Profit
N Neett
lalai.i. (II) On the basis of Membership
l a
l i
a .i. l a
l i
a
et
assaa ➢ Public Companies
aaddas
a aa
s
ad
a a
d s
a aa
s
. P
.P
➢ Private Companies . P
. P
.N
w w
w www
www
(III) On the basis of Liability
www
➢ Company Limited by Shares
lai
➢ Company Limited by Guarantee
N Neett
➢ Unlimited Companies
N Neett
l a
l i
a .i. (IV) On the basis of Control
l a
l i
a .i. l a
l i
a
sa
assaa ➢ Government Companies
aaddaasaa
s
aaddaassaa
w
➢ Holding Companies
w. P
. P w
w . P
. P
w
www w
www
da
➢ Subsidiary Companies
(V) On the basis of Nationality

Pa
N Nee tt
➢ Domestic Companies
N Neett
l a
l i
a .i. ➢ Foreign Companies
l a
lai .i. l a
l i
a
assaa 2. Define a Company. aaddaassaa aa
➢ Multinational Companies
ddaass
aa
w.
w w. P
. P w
w . P
. P
Ans. :
w
www w
www
“A Company is an artificial person created by law having a separate entity with perpetual succession
ww
and a common seal” - Section 2 of the Companies Act, 2013
NN e tt
3. What is meant by Limited Liability ?
e N Neett
l a
l i
a .i. Ans. : l a
lai.i. l a
l i
a
assaa ➢
a ddaasaa
s
ad
a a
d s
a aa
s
A member is liable to pay only the uncalled money due on shares held by him
a
➢
w w . P P
. of a company. w
w. P
. P
Personal Properties of the member are not held responsible
4. Write any twow

w w
w
Ans. :
w w Characteristics
w
w
N N ett
The two characteristics of a company are :
e N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. a)Limited Liability
l a
l i
a .i. l a
l i
a
assaa s saa ssaa
A member is liable to pay only the uncalled money due on shares held by him.
a
b)Transferability of Shares
addaa aaddaa
ww . P
. P w
w .P.P
w
wwbywChartered Company ?
Shares in a Company are freely transferable
5. What is meant
w
www
Ans. :
N Nett
e N Neett
Chartered Companies are established by the King or Queen of a country.
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aa aa
➢ Powers and Privileges of the Company are specified in the charter
dda as s d a
d s
a s
. .P a a
➢ E.g. East India Company, Bank of England
P . P
. Paa
.N
ww
III. Short Answers w w
: w
www
w w
1. What are the advantages of Companies (Any 3)
w
w
lai
Ans. :
N Neett N Neett
l a
l i
a .i. i)Large Capital
l a
l i
a .i. l a
l i
a
sa
assaa saa
s ssaa
A Company can secure large capital compared to sole trader or partnership
aaddaa aaddaa
ii)Limited Liability
ww. P
. P w
w . P
. P
w
www w
www
da
➢ The Liability of a share holder is limited

➢ This will motivate many people to become a share holder
iii)Transferability of Shares
Pa
NN e ett N Neett
Any share holder can easily convert his shares into money by selling his shares
l a
l i
a .i. 2. What is meant by Government Company ?lalai.i. l a
l i
a
assaa Ans. :
ad
a da s
a saa
aaddaasaa
s
w.
w w . P
. P w . P
. P
➢ A government company is defined as “Any Company in which not less than 51% of the Share
w
wwww w
www
Capital is held by the central government or by any state government or governments or
partly by the central government and partly by one or more state governments and includes
ww
a company which is a subsidiary company of such a government company.”

➢ E.g. Steel Authority of India
NN3.eet t is meant by Foreign Company ? N Neett

l a
l i
a .i. Ans. :
What
l a
lai.i. l a
l i
a
assaa aaddaa s aa
s
ad
a a
d s
a aa
s
➢ A Company which is incorporated outside India under the law of that country.
w w . P
. P w
w. P
. P
wwww
➢ And establish business in India w
www
➢ It must file the following documents
i)A certified copy of the charter or statutes under which the company is incorporated
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i.
ii)The full address of the registered office of the company
l a
l i
a
assaa ssaa ssaa
iii)A List of Directors and Secretary of a Company
aaddaa aaddaa
iv)The name and address of any person resident of India to receive any notice
w w. P
. P w
w .P.P
wwww w
www
v)The full address of the Company’s Principal place of business in India
IV. Long Answers

1.What are the contents of Memorandum of Association ?
N Nee t: t N Neett
lalai.i. Ans.
l a
l i
a .i. l a
l i
a
et
assaa s aa
s s aa
s
The Contents of Memorandum of Association are :
aaddaa ad
a a
d a
a)Name Clause
. P
.P . P
. P
.N
w w
w www
www www
b)Situation Clause
c)Objective Clause
lai
d)Liability Clause
N Neett
e)Capital Clause
N Neett
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aa aa
f) Association Clause
ddaass ddaass
a)Name Clause
. P
. Paa . P
. Paa
www w w
w
➢ It states the legal and recognised name of the company.
www www
da
➢ The company name should not resemble the existing company name.
b)Situation Clause
Pa
N Neett N N ett
It states the physical location of the registered office
e
l a
l i
a .i. of the company
l a
lai .i. l a
l i
a
assaa c)Objective Clause
ad
adaassaa
aaddaasaa
s
w.
. P P . P P
➢ It states the main objectives and ancillary objectives of the company.
ww . w
w .
w
www w
www
➢ The objectives should be free from any provisions that contravene laws or public good.
ww
d)Liability Clause
N Neett N N ett
It states the liability of the shareholders of the Company
e
l a
l i
a .i. e)Capital Clause
l a
l ai.i. l a
l i
a
assaa aadd as saa
➢ It states the company’s authorised capital
a
➢ The different Categories of Shares
ad
a a
d s
a aa
s
ww .P. P
➢ And the nominal value of the Shares
w
w. P
. P
w
w of Articles of Association ?
wwcontents
2.What are the w
www
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i.
The Contents of Articles of Association are :
l a
l i
a
assaa ssaa ssaa
i)Amount of Shares, Capital, Value and type of Shares
aaddaa
ii)Manner of Transfer of Shares
aaddaa
ww. P
. P w
w .P.P
w
www
iii)Declaration of Dividends
iv)Seal of the Company

w
www
v)Borrowing Powers of the Company
N Nee tt N eett
vi)Rules regarding issue of shares and debentures
N
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa 3.What is meant by multinational aa? aa
vii)Procedure for conducting meeting, proxy, quorum, etc.
d da s
a s d a
d s
a s
. P
. P a a company
. P
. Paa
.N
Ans. :
w ww www
www www
A Multinational Company (MNC) is a huge industrial organisation which
lai
i)Operates in more than one country
N Neett N Neett
ii)Carries out Production, Marketing and Research Activities on International Scale
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aa aa
iii)Seeks to maximise profits world over
ddaass
➢ A Domestic Company or a Foreign Company can be a MNC
ddaass
. P
. Paa . P
. Paa
ww
➢ e.g. Microsoft Corporation
w w w
w
www www
da
Pa
NN e e t t 7 - Co-Operative Organisation
LESSON
NNeett
l a
l i
a .i. I. CHOOSE THE CORRECT ANSWER l a
lai .i. l a
l i
a
assaa 1. Membership in a Co-operative a a d a
d as saa
aaddaasaa
s
w.
organization is :
(a) Not open to all w w . P
. P w
w . P
. P
(c) Open to w w
allww(d) None of them
(b) Selective
w
w w
w
ww
2. Co-operative fails because of _________

(a) Unlimited membership (b) Cash trading
N Neett
(c) Mismanagement (d) Loss-making
N Neett
l a
l i
a .i. l lai.i.
3. All Co-operatives are established with
a l a
l i
a
assaa aa aa
(a) Philanthropic motive (b) Service Motive
(c) Profit motive
aass
(d) Reform motive
dd d a
d s
a s
.P. Paa . P
. P
4. Consumers Co-operation was first successful in ________aa
(a) England
w w
w(b) USA (c) Swiss
w
w
(d) India
w
www www
5. Rochdale Society of equitable pioneers was started by ________
(a) Robert Owen (b) H.C. Calvert
(c) Talmaki (d) Lambert
N N ett
e N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t do you mean by cooperative organization?NNeet t

lalai .i. Ans. :
1.What
l a
l ai .i. l a
l i
a
assaa a a dd
➢ It is a form of business
aa ss aa
a d
a a
d s
a aa
s
w w
people who. P P
. House, Mother Diary
use its products, supplies or services.
w w . P
.P
organisation which is owned and controlled by the
ww w
➢ E.g. wIndian Coffee
w w w w
2.Define cooperatives.
NNeet t Co-operation is better forming, better business

Ans. :
N Nee tt
lalai.i. Plunkett l a
l ai .i. and better living – Sir Horace
l a
l i
a
et
assaa 3.What is Credit co-operatives?a ad da as saa
a a ddaassaa
. P
.P . P
. P
.N
w w w w w ww
wwwto help their
Ans. :
➢w
wIt is formed for the purpose of providing short-term financial
members
lai
➢ Agriculturalists, salaried employees, artisans, Industrial Workers form these
NN e ett credit co-operatives.

N Neett
l a
l i
a .i. 4. Who are Rocha dale Pioneers? l a
l ai .i. l a
l i
a
sa
assaa Ans. : a ad a
d as saa
a a ddaassaa
w w . PP
. Owenmovement
➢ It was the first co-operative
ww . P
. P
www w www w
da
➢ It was started by Robert in the year 1884

➢ He formed a Consumers Co-operative Society with 28 workers as members, called
Rocha dale society of equitable pioneers.
Pa
NNeett
III. SHORT ANSWER QUESTIONS:
N N eett
l a
l i
a .i. 1. What are the disadvantages of Cooperatives?
l alai .i. l a
l i
a
assaa Ans. :
A)Limited Funds d
aa da as saa
aaddaasaa
s
w.
w w
➢ The. P P
. the funds available are limited
membership fees collected is low
w
w . P
. P
ww w w
➢ Therefore
w
w w
w
ww
B)Lack of Secrecy
➢ Business Secrets cannot be maintained in co-operatives
N Neett N Neett
➢ Because all members are aware of the activities of the enterprise
l a
l i
a .i. C)Lack of Managerial Skills la l ai.i. l a
l i
a
assaa ➢ Members ofd
a a d a
the a ss aa committee may not have required
managing
ad
a a
d s
a aa
s
➢w
. P P
.results in inefficient management, poor functioning
qualification
w skill or experience.
w w . P. P
w
wwwenterprise.
This
www w of the
2. Write a note on Housing cooperatives.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neet tAns. : NNe ett

lalai .i. l a
l i
a .i. to their members on ownership
➢ Meant to provide residential accommodation
l a
l i
a
assaa basis or on rent
➢ These societies a
ad da a ssaa
loans to members repayable over a period of 15a
a d daassaa
years
w w . P P advance
.P
.tenant however can own the houses after payingwthewwcost..Pto 20
3. Whatw
ww by Producers cooperative society? www
wmeant
➢ The
is
member
Ans. :
➢ Established and operated by producers
N Nett
e N Ne tt
e
➢ They are organised to process, market and distribute their own products
lalai.i. l a
l ai .i.
➢ E.g. Co-operative weavers societies, co-operative carpenting units
l a
l i
a
et
assaa IV. LONG ANSWER QUESTIONS a ad daas saa
ad
a a
d s
a aa
s
. P
. P . P
. P
.N
1. What are the principles of cooperatives? (Any 5)
w ww www
wwwand Open Membership
Ans. :
(i)Voluntary www
➢ Membership is open to all
lai
➢ Any person with common interest can become a member
N Neett N Ne e tt
➢ The membership fee is kept low so that everyone can join and benefit from co-
l a
l i
a .i. operative society
l a
l ai .i. l a
l i
a
sa
assaa a
(ii)Democratic Member Control
a add a s saa
a a ddaassaa
➢ It w w . P P
➢ Co-operative
. that members have equal rights in managingw
Society is run on the principle of one man one vote
w w . P P
.of the
ww w
da
implies the affairs

ww business w w
➢ Members cannot dominate the management by buying majority shares
(iii)Members’ Economic Participation
Pa
N Neett N N e ett
l a
l i
a .i. l a
la i .i.
➢ Members contribute equally to the capital of the co-operative and
l a
l i
a
assaa aa aa
democratically controlled
d d a as s ddaass
➢ This helps the members to conduct business with co-operation rather than
a a aa
w.
w w. P
on the capital invested
. P w
w . P
. P
ww
(iv)Autonomy
ww
and Independence
www w
ww
➢ Co-operatives are autonomous self help organisations

➢ Controlled by their members
N Neet t(v)Education, Training and Information

N N ee tt
l a
l i
a .i. ➢ Co-operatives provide Educationi.
l a
l a i
&.Training to Members, Elected l a
l i
a
assaa representative Managersa
➢ So that they cand
a a d aa s s a
and
contribute
Employees
effectively for the development of their Co- d
aa daasa
s a
➢w w w . P
.
operative P w w . P
. P
w w wThis
w w
will help the Members to develop their Co-operative
w weffectively.
(vi)Co-operation among Co-operatives
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett NN e e t t by working together through

lalai .i. l a
l ai .i. structures.
➢ It strengthens the Co-operative movement
l a
l i
a
assaa aa Society? aa
local, national, regional and international
d da a ss
2. What are the Advantages of Co-operative
d daass
Ans. :
. P. P a a . P
. P a a
ADVANTAGES
w w w w w w
www
(i)Voluntary Organisation :-
➢ Membership is Open to All www
➢ Any person with common interest can join
➢ Membership Fee is kept low, so that every one can join and benefit
N Nett
e from Co-operative Society.
N N e ett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aais run on the principle of one man one vote aassaa
(ii)Democracy :-
d d as
a s d d
➢ .ItP
. P a
➢ Co-operative
a Society
. P
. P aa
.N
implies members have equal rights in managing the affairs of the
w w w w w w
www Enterprise
(iii)Easy Formation :-
www
lai
➢ Co-operatives can be formed easily with 25 members
NNeett N Nee tt
➢ Legal formalities are simple as compared to a company.
l a
l i
a .i. (iv)Limited Liability l a
l i
a .i. l a
l i
a
sa
assaa a ad da
➢ The liability a saa are limited to the extent of their Capital aassaa
ofsmembers
a a d d
w
w . PP
. members are personally not liable for the debts
Contribution
w . P P
the.society
ofw
w ➢
wwwLegal Entity www w
da
The
(v)Separate
➢ It enjoys separate legal entity, distinct from its members
Pa
NNeett N N ett
➢ It’s continuance is not affected by the death, insolvency or insanity
e
l a
l i
a .i. (vi)Each for All and All for Each lalai.i.
of its’ members
l a
l i
a
assaa a a d da as saa
aaddaasaa
s
w.
w w .
➢ Members P
➢ Formed on the
P basis of Self Help and Mutual Help
. help himself and help others. w
w . P
. P
w
wwwtypes of Cooperative society?
3. What are the w
www
ww
Ans. :
Types of Co-operative Societies
N Neett (A)Consumer Co-operatives

➢ Organised by Consumers
N Ne ett
l a
l i
a .i. l a
l ai.i.
➢ Who want to buy quality goods or services for better prices
l a
l i
a
assaa a
System (PDS)
a d d assaa
ad
a d s
a aa
s
➢ They also supply essential commodities through Public Distribution
a a
ww .P. P w
w. P
. P
w w
(B)Producers
ww
Co-operatives
➢ Are established and Operated by producers
w
www
➢ They are organised to process, market and distribute their own products
➢ E.g. Co-operative weavers Societies, Co-operative Carpenting Units
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett NNe ett

lalai .i. (C)Marketing Co-operatives
l a
l ai .i. for the purpose of marketing l a
l i
a
assaa s saa s aa
s
➢ Associations of Small producers formed
a
their produce
ad d a a a d
a a
d a
➢ w w .
➢ They secureP
. P better prices for their members
w w . P
.P
w
wwwCo-operatives
(D)Credit www w
Advance also given to members against produce deposited with the society.
➢ Formed for the purpose of providing short-term financial help to their
N Nett
e members
N Neett
lalai.i. l l i
a .i.
➢ Agriculturalists, Salaried Employees, Artisans, Industrial workers form
a l a
l i
a
et
assaa aa aa
these Credit Co-operatives
d da a s s
➢ Encouraging thrift among members is the objectives of these societies
d a
d s
a s
. P
. P a a . P
. Paa
.N
w
➢ w
w
(E)Housing Co-operatives
w w w w
w on
ww ww
Meant to provide residential accommodation to their
ownership basis or on rent
members
lai
➢ These societies advance loans to members, repayable over a period of 15
N Neett to 20 years
N eett
➢ The member tenant however can own the house after paying the cost.
N
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aaddaassaa
aaddaassaa
Chapter 8 –www . P
. P w
w . P
. P
w w
w
da
Multinational Corporations
ww
w
w
Pa
1) A Multinational Corporation can be defined as a firm which
N Neett N e
a. Is beyond the control of any government
N ett b. is one of the top 200 firms in the world
l a
l i
a .i. l a
lai .i.
c. owns companies in more than one country d. All the above
l a
l i
a
assaa ssaa saa
s
2. Centralized control in MNC’s implies control exercised by
ad
adaa aaddaa
w.
a. Branches b. Subsidiaries c. Headquarters d. Parliament
ww. P
. P w
w . P
. P
3. Enterprises operating in several countries but managed from one country is termed
as _______
w
www
a. Government company
w
www
b. Multinational Company
ww
c. Private company d. Joint Venture

4. Dispersal of decision-making power to branches/affiliates/subsidiaries by head office
N eett
represents
N N Neett
l a
l i
a .i. a. Centralization
l a
lai.i.
b. Decentralization c. Power d. Integration
l a
l i
a
assaa II. VERY SHORT ANSWER aa aa
5. Coca-Cola company is an example of ______
dda ass
a. MNC b. Government company c. Joint Venture d. Public company
d a
d s
a s
. P Paa
.Company QUESTIONS
. P
. Paa
w w w w w w
w corporation owns and manages businesswinwtwowor more
wwmultinational
1. Define Multinational
Ans. : “A
countries”. – Neil H. Jacoby
2. Write any two advantages of MNC’s
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeetAns.t : NN eett
lalai .i. a) Low Cost Labour – MNC ‘s setup theirlalfacilities
a i .i. in low cost countries and l a
l i
a
assaa a a d aa ssaand
produce goods
d
a services at lower cost.
– MNC’s are in a position to properly utilise idle,ad
a a
d s
a aa
s
w w .
Physical andP
b) Proper use of idle resources
P
.MNCs
Human resources of the host Country.
w w . P.P
ww w w
3. Give two examples
Ans. : a)
of
Coco-Cola Corporation wwww
b) Unilever Limited
c) Infosys
NNett
e N Neett
lalai.i. III. SHORT ANSWER QUESTIONS l a
l ai .i. l a
l i
a
et
assaa 1. Name the type of business thats
aad da a saa in more than one country.
operates
ad
a a
d s
a aa
s
. P
.P
Ans. : Philips, Coco-Cola Company
. P
. P
.N
IBM w
w w w w w
www Informatics , Tata
, Britannia
Micromax, www
2. Write any three Indian MNC’s
lai
Ans. :
N Neett Bajaj
N Neett
l a
l i
a .i. TVS
l a
l i
a .i. l a
l i
a
sa
assaa saa
s ssaa
Britannia
aaddaa
Hero Motocorp.
aaddaa
ww. P
. P w
w . P
. P
w
ww QUESTIONS : w
www
da
IV. LONGw
ANSWER
1.What are the advantages of MNCs ? (any Five )
Pa
N Neeta)tLow Cost Labour – MNC ‘s setup their facilities

Ans. :
NN e et tcost countries and
l a
l i
a .i. l a
la i .i. at lower cost.
in low
l a
l i
a
assaa ssaaare in a position to properly utilise idle, aassaa
produce goods and services
b) Proper use of idle resourcesa–a
a add MNC’s
a d
a d
w.
w w .
Physical andP P
.MNC’s help in producing quality goods and services
Human resources of the host Country.
w w . P P
.least
w
www possible cost.
c) Quality Products –
wwww at
ww
d) Improvement in standard of living – By providing super quality products and

services, MNC’s help to improve the standard of living of people of
N Neett host countries.

N Ne ett
l a
l i
a .i. l a
lai.i.
e) Promotion of International Brotherhood and Culture – MNC’s promote
l a
l i
a
assaa aa dd as saa
2. What are the disadvantages of MNCs ? (any Five)
aa dd asaa
s
international brotherhood and culture and pave way for world peace and prosperity.
a a
Ans. : ww . P
. P w w . P
. P
a) Transfer
w
wwofwoutdated technology – MNC’s transfer outdatedww ww
technology to host
countries
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet t benefit to poor people – MNC’s produce things N Neet t are used by rich people.
lalai .i. Therefore poor people do not get any benefit.lalai.i.
b)No which
l a
l i
a
assaa a d
c)Deprivation of Job Opportunity
a da a s
ofs
aa
Local People – MNC’s may not generate job
a addaassaa
. PP
. of natural resources – MNC’s cause rapid depletion
opportunities to the people
ww
of home country.
w w . P P
.some of
w
www natural resources of the host country. www
d)Careless exploitation
the non-renewable
w of
e)Selfish Promotion of Alien Culture – MNC’s tend to promote Alien Culture in host
N Ne ett N Neett
country to sell their products. This promotion of foreign culture is injurious to the health
lalai.i. of people.
l a
l i
a .i. l a
l i
a
et
assaa Chapter 9 – Government aad as
a saa
Organisation
d ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w ww w w
w
wwof the government company must not be less w
1. The sharew
capital ww
than
(a) 49% (b) 60% (c) 95% (d) 51%
l a
l i
a N
.i. Ne
(a)
ePublic
lai
t t Sector Undertakings (b) Departmental
2. The oldest form of organization in public sector
l a
l ai N
.i. Neett
Undertakings
l a
l i
a
sa
assaa (c)3. AMulti-National Corporations
a a dd a a saa Corporation
(d)sStatutory
aaddaassaa
Government company
w w . P
. P
purchases shares in the name of
w
w . P
. P
www w www w
da
(a) Prime Minister (b) President

(c) Chief Justice of India (d) State Chief Minister
Pa
N N et t profit N N ett
4. The primary objective of the state enterprises is to --------------
e e
l a
l i
a .i. (a) Earn (b) Provide
l a
lai
Employment .i. l a
l i
a
assaa (c)II. Serve the People
a a ssaa
(d) All the Above
aa d d aaddaasaa
s
w.
VERY SHORT ANSWER

ww . PP
. Enterprises
QUESTIONS
w
w . P
. P
www w
1. Give two examples of Public w
www
ww
Ans. :
✓ Life Insurance Corporation of India
NNe ett
✓ The Indian Airlines
N Neett
l a
l i
a .i. 2. Give two examples of Departmental undertaking?
l a
lai .i. l a
l i
a
assaa Ans. : aa ddaa s saa
ad
a a
d s
a aa
s
w w . P
. P w
w. P
. P
www w
❖ All India Radio
❖ Doordarshan w
www
3. What is meant by Red-Tapism?
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe et:t N N e ett

lalai .i. ➢ There is too much of procedures whichlresults
Ans.
a
l i
a .i.in delay. l a
l i
a
assaa d da a
➢ Commercial organisation cannot
a a
ssaadelay in taking decisions.
afford
aaddaassaa
III. SHORT ANSWER w w . PP
. QUESTIONS: w
w .P.P
wwww
1. What is meant by Departmental undertakings? www w
Ans. :
NNe et t✓ It is the oldest form of organization.

NN e et t of the Government.
lalai.i. ✓ A public enterprise is run as a separate
✓ No distinction was made between the
l a
l ai .i. ministry.
routine functions
l a
l i
a
et
assaa s saa ssaa
full-fledged
aad d a
✓ For example, Indian Railways,a Post and Telegraph services, All India Radio, Doora
a ad d a
darshan.
. PP
. Company? . P
. P
.N
w w w w ww w w
➢
w w
2. What is meant by Government
Ans. : A government company is defined as
w w
“Any Company in which not less than 51% of
lai
the Share Capital is held by the central government or by any state government or
N Neett N N ett
governments or partly by the central government and partly by one or more state
e
l a
l i
a .i. l l a i .i.
governments and includes a company which is a subsidiary company of such a government
a l a
l i
a
sa
assaa 3. What is meant by Public Corporation? aa aa
company”.
a
➢ E.g. Steel Authority of India
d d a ss d d aass
. P
. P aa . P
. P aa
w ww w ww ww
da
Ans. :
w w ww
➢ It is form of public enterprise which is created as an autonomous unit, by a special
Act of the Parliament.
Pa
N Neett N N ett
➢ It is created by a Statute. It is also known as a statutory corporation.
e
l a
l i
a .i. l a
lai .i. l a
l i
➢ Examples: Life Insurance Corporation of India, the Indian Airlines, the Air India
a
assaa IV. LONG ANSWER QUESTIONS aa aa
International
ddaass ddaass
aa aa
w.
1. What are thew

w . PP .
. of Departmental undertaking ? www. P
P
Ans.w w
: ww
advantages
www
ww
i. Easy Formation:
➢ It is easy to set up a departmental undertaking.
N Neett N N e tt
➢ The departmental undertaking is created by an administrative decision of
e
l a
l i
a .i. l lai.i.
the Government, involving no legal formalities for its formation.
a l a
l i
a
assaa aa aa
ii. Direct and Control of Parliament or State Legislature:
d d aa s s a
The departmental undertaking is directly responsible to the Parliament or
d d s
a s
.P. Pa a . P
. Paa
the State legislature through its overall head i.e. the minister concerned.
w ww w w w
www www
iii. Secrecy Maintained:
➢ Strategic industries like defence and atomic power cannot be better managed
other than government departments.
➢ Department undertakings can maintain secrecy in their working.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neet t iv. Lesser Burden of Tax on Public: NNeet t

lalai .i. l a
l i
a .iare. entirely paid into Government l a
l i
a
assaa s saa ssaa
➢ Earnings of departmental undertaking
a d d a a
treasury, resulting in lesser
a tax burden on the public.
aaddaa
v. Instrument of.P . P .P.P
w w w Social Change:
w w w
www ➢ Government can promote economic and social w
departmental undertakings.
w wthrough
justice
N Neett N N ett
2. What are the features of Public corporation? (Any 5)
e
lalai.i. Ans. :
l a
l i
a .i. l a
l i
a
et
assaa i. Special Statute:
aadda as saa
is created by a special Act of the Parliament or the aa d daassaa
. PP
➢ A public corporation
. . P
. P State
.N
w w w w w w
ww Legal Entity: www
Legislature.
ii.wSeparate
lai
➢ A public corporation is a separate legal entity with perpetual
N Neett succession and common seal.

N Ne ett
l a
l i
a .i. l a
l
iii. Capital Provided by the Government: i
a .i. l a
l i
a
sa
assaa ➢ The capital of a
a ad d as saacorporation is provided by the Government or aassaa
a public
a add
w . P
. P
by agencies
w
controlled by the government.
ww . P
. P
w w w w
da
w w
iv. Financial Autonomy:
➢ A public corporation enjoys financial autonomy.
w w
➢ It prepares its own budget;
Pa
N Neett v. Management by Board of Directors:

NN e ett
l a
l i
a .i. l
➢ Its management is vested in a
aa
l i .i. of Directors, appointed or nominated lalai
assaa aa aa
Board
by the Government. ss ss
a a dd aa a ad daa
w.
w w .
3. What are the FeaturesP
. P
of Government Company? (Any 5)
w w . P
. P
Ans. :
wwww www w
ww
i. Registration under the Companies Act:
➢ A Government company is formed through registration under the

N Neett N N e ett
l a
l i
a .i. any other company.
l a
l ai.i.
Companies Act, 1956; and is subject to the provisions of this Act, like
l a
l i
a
assaa ii. Executive Decision of a
a ad d as saa
Government:
aa d a
d s
a aa
s
w w .P P
. without seeking the approval of the Parliament
➢ A Government company is created by an executive
w
decision
w
of. P
theP
. State
www w Government,
Legislature. www w or the
iii. Separate Legal Entity:
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l ai .i.
➢ A Government company is a legal entity separate from the Government.
l a
l i
a
➢ It can acquire property; can make contracts and can file suits, in its own
assaa name.
iv). Own Staff:P aad da a ssaa
aaddaassaa
w w . . P ww .P. P
www w w
w officials
wwGovernment
➢ A Government company has its own staff; except
who are sent to it on deputation.
➢ Its employees are not governed by civil service rules.
N Nett
e N Neett
lalai.i. l a
l i
v). Free from Procedural Controls:
a .i. l a
l i
a
et
assaa controls,a
add a s s
✓ A Government company
a aais free from budgetary, accounting and audit aassaa
a ad d
. P
. P applicable to Government undertakings.
. P
. P
.N
w ww w w w
www www
Chapter 10 – Reserve Bank of India
l a
l i
a NN e e tt
lai
.i. 1. Which bank has the power to issue Banklnotes?
a
l i
a N
.i. Neett
l a
l i
a
sa
assaa (a) Central Bank (b) Commercial aa d daas saa
Bank
aaddaassaa
ww P
(c) Co-operative Bank .(d)
. PForeign Bank
w
w . P
. P
w wof India is w
www
da
wwBank
2. The Central
(a) PNB (b) SBI (c) IClCI (d) RBI
Pa
NN e ett N Ne e tt
3. The Reserve Bank of India commenced its operations from April 1,
l a
l i
a .i. (a) 1936 (b) 1935 (c) 1934 (d) 1933 lalai.i. l a
l i
a
assaa 4. Bankers are not only dealersaaofddmoney
aassabutaalso leaders in aaddaasaa
s
w.
w w.
(a) Economic Development P
. P(b) Trade Development
w
w . P
. P
(c) Industryw w
ww (d) Service Development
Development w
www
ww
5. Which of the following is not a function of a Central Bank?
N N ett
(a) Guiding and regulating the Banking system of a Country
e N N e ett
l a
l i
a .
i . (b) Deal with general public (c) Acts
l a
l a
essentially i.
asi.government banker
l a
l i
a
assaa (d) Maintains deposit accountsaofadalldaother aa
assbanks ad
a a
d s
a aa
s
w
II. VERY SHORT ANSWER
w. P
. P QUESTIONS
w
w. P
. P
1. What arew ww included in Service businesses?
wservices
the www w
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN eet t included in service businesses are Education,NHealth,

Ne et tBanks, Hotels, Transport,
lalai .i. Communications, Electricity, etc.
Services
l a
l i
a .i. l a
l i
a
assaa 2. Write the meaning of ‘Bank.’ a a ddaas saa
a d
a a
d s
a aa
s
Ans. :
w w . P
. P w w .P.P
❖ The wordw www
Bank normally refers to commercial bank. www w
❖ It plays a vital role by providing the money required by industries and commerce for their
NN e ett
regular functioning and development.
N N e ett
lalai.i. 3. Briefly explain about Central Bank. lalai.i. l a
l i
a
et
assaa Ans. :
a ad d a as saa
ad
a a
d s
a aa
s
.
➢ Every nation has one P
.P . P
. P
.N
central bank.
➢ It is owned byw w w
w
➢ Central
w the Government of the country.
www w
wwbanksware known by different names in different countries.
➢ In India, the Reserve Bank of India is the Central Bank
lai
t t are the functions of RBI. tt
i N
.i. Ne e i N
.i. Ne e i
l a
l a 1. What
l a
l a l a
l a
sa
assaa Ans. :
a a dd a as saa
aaddaassaa
. P
.
→ Leadership and Supervisory
w w P Functions –
ww. P
. P
w
wwwfastest growing economy in the World, it has tow w
ww the quality
da
India being the transform

and size of the banks in India, to the level of Banks in developed countries.
→ Traditional Functions -
Pa
NN e et t Functions are those functions, which everyNN e e t tbank of each nation performs
l a
l i
a .i. all over the world.
Traditional
l a
l ai .i. central
l a
l i
a
assaa → Promotional Functions - aaddaassaa a add aasaa
s
w.
w P P
RBI perform a wide.range
w . of promotional functions to support National
w w . P
. P
Objectives
w wof RBI.
wworigin
2. Explain the www w
ww
Ans. :
N Ne➢
et t N N e et t
In 1926 the Hilton Young Commission or the Royal Commission on Indian Currency
l a
l i
a .
i . and Finance made recommendation to
l a
l ai
create
.i
a
.
Central Bank.
l a
l i
a
assaa aa aa
➢ As a result, the RBI Act 1934 was passed. RBI launched its operations from April 1,
1935.
d da as s d a
d s
a s
➢ After independence, thea a of India passed Reserve Bank Act, 1948. a a
➢ From Januaryw 1,w. PP
. RBI started functioning as a government owned
Government
w w . P P
. bank
www
of India. w 1949,
www w central
3. Who are the persons involved in RBI administration?
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet t: N Neett
lalai .i. The twenty one member board is appointed bylaltheaiGovernment
Ans.
.i. l a
l i
a
assaa ➢ One Governor and Four Deputy s saa s aa
s
of India, which consists of
aad daa a ad a
d a
w w . PP
. fieldsGovernors for a period of Four Years
w w .P.P
➢ Ten Directorsw w w w
w w from various
➢ Two Government Officials

w w
➢ Four Directors – One each from local boards.
N NeetLONG
t ANSWER QUESTIONS NNeet t
lalai.i. IV.
l a
l i
a .i. l a
l i
a
et
assaa 1. Classify the various functions
aadda as saaBank of India.
of Reserve
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
Ans. :
w w
w www
wwwof the RBI can be grouped under three heads.www
The Five Functions
→ A. Leadership and Supervisory Functions
l a
l i
a NNe tt
.i. → C. Promotional Functions.lai
→ B. Traditional Functions and
e
l a
l ai N
.i. N e e tt
l a
l i
a
sa
assaa The following are the five functionsa ad da as s
of RBIaa
aaddaassaa
i)
w w . P
. P
India’s representative in World Financial Institutions
w w . P
. P
www w w
wwBank)wand
da
RBI represents government of India in International Bank for

Reconstruction and Development (IBRD . i.e. World
International Monetary Fund (IMF) in which India is a member since
December 27, 1945.
Pa
N Neet tii) N N e ett

l a
l i
a .i. Monetary Authority
l a
lai .i. l a
l i
a
assaa s aa saa
The RBI Formulates, implements and monitors the monetary policy of the
d d a a s ddaa s
country in order to maintain price stability, controlling inflationary trends and
aa aa
w.
ww . P
. P
economic growth.
w w . P
. P
iii) w
w ww of Note Issue
Monopoly ww ww
ww
• The RBI is the sole authority for the printing and issue of all
Currency Notes in India, except 1 Re. Note
N Neett •
N N e tt
1 Re. Note and all coins are issued by the Ministry of Finance.
e
l a
l i
a .i. •
l lai.i.
Currency Notes are printed at Nasik, Dewas, Salboni, Mysore and
a l a
l i
a
assaa aa aa
Hoshangabad
Banker’s Bankd da a ss ddaass
Iv)
. P P a a
. RBI maintains the current accounts of all Commercial. P P a a
. Banks
w ww
• The
w w w
www• inAllthescheduled
country.
w w w
Banks should deposit a percentage of cash reserve
with RBI
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neet t v) N N e ett
lalai .i. Lender of the Last Resort
l a
l ai .i.Bank in India can approach RBI for l a
l i
a
assaa s aa s aa
• In times of emergency,
d a
d a s any
ddaa s
. .
• RBI aa
Financial
P P
Assistance.
provides them Credit
. P
. Paa
ww•wAll Banks can obtain Loan from RBI when theirw ww
www exhausted. www credits are
NN e et tChapter 11 – Types of Banks NNeet t

lalai.i. I CHOOSE THE CORRECT ANSWER l a
l i
a .i. l a
l i
a
et
assaa 1.Which Bank is not a Industriala adda s
a
Bank
s
?
aa
ad
a a
d s
a aa
s
. PP
. (c) SIDBI (d) IDBI . P
. P
.N
w ww www
wwwBanks are promoting www
(a) ICICI (b) HSBC
2. The Local Area
lai
(a) Rural Savings (b) Business Savings
NN e etIndustrial
(c) t development (d) Agricultural development N Neett
l a
l i
a .i. 3. Foreign banks are begun their operation lsince
al i
a .i. l a
l i
a
sa
assaa (a) 1978 (b) 1979 (c) 1980 d
aa da a ssa
(d) 1981
a
aaddaassaa
w w . P
. P w
w . P
. P
w
w Questions w
www
da
wwAnswer
II. Very Short
1. Give the meaning of Commercial Banks
Pa
N Neett Ans. :
N Neett
l a
l i
a .i. l a
la i .i. l a
l i
*Banks which accept deposits from the public and grant loans to traders, individuals,
a
assaa s aa saa
agriculture, industries, transport, etc. in order to earn profit.
dda a s
*Examples : i) State Bank of India
ddaa s
a a aa
w.
ww . P
. P
ii) Karur Vysa Bank
w
w . P
. P
w w w w w
w w
w
ww
2. What do you mean by Industrial Banks ?

Ans. :
N Neett N N ett
* Huge finance required for investment, expansion and modernisation of big
e
l a
l i
a .i. l a
lai.i. l a
l i
industries and others are granted by a separate type of Banks called Development
a
assaa aa aa
banks.
d daass
* They are also called Industrial Banks
d a
d s
a s
P a
* example : IFCI, IDBI
. P a
.Banks ? . P
. Paa
w ww w w
w
ww www
3. What are Foreign
Ans. : w
* Banks which have registered office in a foreign country and branches in
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N N e ett
lalai .i. India are called Foreign Banks.
l a
l aiin.i.India. l a
l i
a
assaa
* In 2017, there were 42 Foreignaa aa
d da as s Banks
ddaass
PP a
* Examples : Barclays
. .: a Banks, Bank of America
.P.Paa
w w w w w
w
www www
1. Write a short note on Local Area Banks. Give two examples
Ans. :
N Nett
e N Neett
* Local Area Bank (LAB) was introduced by the RBI in August, 1996
*LAB’s are small private sector banks established in rural and semi-urban areas.
lalai.i. l a
l i
a .i. l a
l i
a
*Their main objective is to mobilise rural savings and invest them in the same areas.
et
assaa aaddas
a aa
s
ad
a a
d s
a aa
s
*examples : Coastal Local Area Bank, Vijayawada, Andhra Pradesh
Krishnabhima smruddhi Local Area Bank, Mahabub Nagar,
. P
.P . P
. P
.N
w w
w Telangana.
www
www www
2.What are the objectives involved in Regional Rural Banks ?
Ans. :
*Their objective is to develop Rural Economy
lai
*And play supplementary role to co-operative societies
N Neett N Ne ett
*They mobilise deposits from the rural public
l a
l i
a .i. l l i
a .i.
*And provide finance to rural artisans, small entrepreneurs and farmers
a l a
l i
a
sa
assaa s aa s aa
And try to avoid their dependency on money lenders
d da a s ddaa s
. P
. Paa
IV. Long Answer Questions
. P
. Paa
w w w
wvarious types of Banks based on the functions.www ww
wFive)
da
w
Ans. :
w
1.Explain the (any
a)Commercial Banks
Pa
N Neett N N ett
*Banks which accept deposits from the public and grant loans to traders, individuals,
e
l a
l i
a .i. l a
lai .i.
agriculture, industries, transport, etc. in order to earn profit.
l a
l i
a
assaa aa aa
*Examples : i) State Bank of India
ddaass
ii) Karur Vysya Bank
ddaass
aa aa
w.
b) Industrial Banks
ww. P
. P w
w . P
. P
* Huge finance required for investment, expansion and modernisation of big
w
www w
www
industries and others are granted by a separate type of Banks called Development
ww
banks.
* They are also called Industrial Banks
* Examples : IFCI, IDBI
N Neett c) Foreign Banks

N N e tt
e
l a
l i
a .i. l a a .foreign
i
ina
l i. country and branches in l a
l i
a
assaa aa aa
* Banks which have registered office
d aas s
India are called Foreign Banks.
d d a
d s
a s
P Pa
* In 2017, there were
. a42 Foreign Banks in India.
. Banks, Bank of America . P
. Paa
w w
* Examples : Barclays
d) Localw w w w w w
w w Area Banks.
w w
* Local Area Bank (LAB) was introduced by the RBI in August, 1996
*LAB’s are small private sector banks established in rural and
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neet t semi-urban areas. NN eett

lalai .i. l a
l ai .i. and invest them l a
l i
a
assaa ssaa ssaa
*Their main objective is to mobilise rural savings
in the same areas.
a a d d aa aaddaa
w w . P P
. smruddhi Local Area Bank, MahabubwNagar,
*examples : Coastal Local Area Bank, Vijayawada, Andhra Pradesh
w
w .P.P
w w w wTelangana.
Krishnabhima
w w w
e) Regional Rural Banks
*Their objective is to develop Rural Economy
N Nett
e N Neett
*And play supplementary role to co-operative societies
lalai.i. l l ai .i.
*They mobilise deposits from the rural public
a l a
l i
a
et
assaa aa aa
*And provide finance to rural artisans, small entrepreneurs and farmers
d aas s
And try to avoid their dependency on money lenders
d d a
d s
a s
. P
. P a a . P
. Paa
.N
2.Explain the types w
ofw ww
*Any Bankww w w banks based on ownership patterns.
in which not less than 51% of shares are owned by the ww w w are called
government
Government Bank or public sector commercial bank
lai
*All Banking companies owned by private people are called private sector commercial
N Neett
bank
N Neett
l a
l i
a .i. l l i
a .i.
*All Co-operative Banks are owned by its members from the public.
a l a
l i
a
sa
assaa aa aa
*In order to channelise the funds with these commercial banks, towards national priorities
ddaass ddaass
and to develop Agricultural and rural sector, government paid the share capital of those
. P
. Paa . P
. Paa
Banks to the private owners and took over as government banks. This is called
www
Nationalisation of Banks.
w w
w
www www
da
*Examples :
a) Nationalised Banks – Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce
b) Public Sector Banks – SBI, IDBI Bank Ltd. And all Nationalised Banks
Pa
N Neett N N ett
c) Private Sector Banks – Karur Vysya Bank , Kotak Mahindra Bank, Lakshmi Vilas Bank
e
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa a ad da as saa
aaddaasaa
s
w.
. P
. P
Chapter 12 – Functions of Commercial
w w
Banks
w
w . P
. P
I. CHOOSE THE
w w wwBEST ANSWER:
w
w w
w
ww
1. Electronic banking can be done through

(a) Computers (b) Mobile Phones (c) ATM (d) All of the above
NN2.e et t how much amount can be transferred through N N e e tt

l a
l i
a .i. (a) Any Amount (b) Rs. 50,000 (c) Rs. 2 Lakhs
Minimum
l a
lai.i.(d) Rs. 5 Lakhs
RTGS?
l a
l i
a
assaa 3. The largest commercial bankaofadIndia. daas saa
ad
a a
d s
a aa
s
w w . P P
. (d) RBI w w . P
. P
w w
(a) ICICI (b) SBI
w w (c) PNB
w w w w
4. In which kind of account, it is compulsory to deposit certain amount at certain time?
(a) Savings Deposit (b) Fixed Deposit
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N N e et t Deposit (d) Recurring Deposit NNeet t

lalai .i. (c) Current
l a
l i
a .i. l a
l i
a
assaa 5. Which of the following is notaaadtypedaaofsadvance
saa provided by the commercial bank? ddaassaa
aa
. P
. P
ww Business information (b) Overdraft wwww .P.P
ww
(a) Collection and Supplying
ww ww
(c) Cash Credit (d) Discounting of Bills
NN e et t SHORT ANSWER QUESTIONS NNeet t

lalai.i. 1. What is Mobile Banking?
II. VERY
l a
l i
a .i. l a
l i
a
et
assaa a ad
➢ Most of the Commercial Banks daa ss aa
have designed Computer Programs, called Apps d
a a a
d s
a aa
s
. P P . PP
.smart phone a customer can operate his accountwtransactions
. from
.N
w w
which can be downloaded
➢ With thisw
in Smart Phones.
ww
www
anywhere.
app in the
www
➢ This service is known as mobile banking.
l a
l i
a NNee
➢
lai
t tATM card is also called debit card.
2. Write a short note on Debit card.
.i. ➢ This card is more useful in purchase oflgoodsa

l ai N N
.iand e ett
. services anywhere in India. l a
l i
a
sa
assaa 3. Write a short note on Creditacard. a d da assaa
a a ddaassaa
w w . P
. P w w . P
. P
w w w w
da
➢ Banks issue credit cards to customers and other eligible persons.

➢ Withw w
this card, the holder can purchase goods and services onw w
credit at any shop in
India
➢ If the dues are paid within the stipulated time, no interest is charged.
Pa
N4.e
N e t t do you mean by ATM?
What
NNe ett
l a
l i
a .i. ➢ A customer can withdraw money anytime, l a
la i .i. in India from the ATM machine. l a
l i
a
assaa s aa in the Customer’s Account, provides aassaa
anywhere
d
➢ This Machine shows the Balance
da a s
available
dd
a a aa
w.
. P
. P
statement of the few past
w w
transactions, etc.
w w. P
. P
ww w
III. SHORT ANSWER w QUESTIONS:
w w w w
ww
1. What is E-Banking?
➢ Banking through internet is called E- banking.
N Neett ➢ It can also be called as electronic banking.

N Ne ett
l a
l i
a .i. ➢
l a
lai .i. l
This reduces cost and time and makes banking service convenient to the customers.
a
l i
a
assaa s saa s aa
s
➢ This service is a substitute for drafts, cheques and other paper based transfer of funds.
a ad d aa ad
a a
d a
2. Write a short note on.-P
. P . P
. P
w w w RTGS.
w by the RBI in 2013. ww w
w
✓ It wasww
launched w w
✓ RTGS facility is available between 9.00 am to 4.30 pm on weekdays.
✓ RTGS transfers are not allowed on Sundays and bank holiday
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et
✓ tMinimum limit for RTGS transaction is 2 lakhs. e
N N tt
e
lalai .i. 3. Explain - NEFT. l al ai .i. l a
l i
a
assaa ✓ This was launched by thea ad da as saa
aaddaassaa
w w
✓ Once in every half. P P
hour
RBI
from
in 2005.
. in a day.
8.00 am to 7.30 pm.
w
w .P.P
✓ NEFT w
w
✓ 23 settlements are allowed w
w are not allowed on Sundays and bank holidays.www
wtransfers
✓ IFSC is provided by IDRBT Hyderabad.
NN e e tt
IV. LONG ANSWER QUESTIONS
NN e ett
lalai.i. 1. Discuss the various primary functions performed
l a
l i
a .i.by the commercial banks. l a
l i
a
et
assaa The primary functions of a commercial
a a dda a ssa a are of three types.
bank
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
They are:
w w w w w w w w
w w
a) Accepting Deposits
b) Granting Loans and Advances.
ww
lai
c) Creation of Credit
N Neetta) Accepting Deposits

N Ne ett
➢ In these days banks compete with each other to attract customers by adding
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aa aa
facilities.
d daa s s
➢ Broadly deposit accounts can be classified into (i) Demand Deposits and (ii)
ddaass
Time Deposits.
. P P aa . P Paa
w w -.These deposits are repayable on demand on any day.
ww .
w
wwwDeposits www w
da
(i) Demand Deposits

➢ Savings
➢ Current Deposits
Pa
N Neet t
(ii)
N N eet t
Time Deposits - They include fixed deposits and recurring deposits which are
l a
l i
a .
i . repayable after a period.
l a
l ai .
i . l a
l i
a
assaa ➢ Fixed Deposits (FD)
a
➢ Recurring Deposits (RD)
ad da a s saa
a d
a a
d s
a aa
s
w.
➢ Granting Loans
w w . P
. P
and Advances
w w . P
. P
w w specific sums as loans which are repayablew
➢ It is lending
wwprovide
➢ Banks
money in order to earn interest income.
ww w
along with interest.
ww
➢ But both terms are used interchangeably.
N Neetti). Advances
N N e ett
l a
l i
a .i. ➢ Overdraft
l a
lai.i. l a
l i
a
assaa aa aa
➢ Cash Credit
dd
➢ Discounting of Billsa ass d a
d s
a s
P. Paa
ii). Loans Generally.commercial . P
. Paa
w w w
wLoan
banks provide the following loans
w ww
w
▪
▪
w w
Housing
Consumer Loans
w w
▪ Vehicle Loans
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Ne et t Educational Loan N N e ett

lalai .i. ▪
▪
l a
l ai .i. l a
l i
a
assaa aa aa
Jewel Loan
ddaass d daass
c) Creation of Credit
. P Pa a
. and the sector to which this credit moneywis w . P
.Pa a
w w w
➢ Credit money of commercial banks is far greater in volume than the
w
currency money.
www
➢ The volume,
channelized.
the purposes
www to be
NNeet tExplain the various secondary functions of commercial

2.
N Neet t banks.
lalai.i. ➢ Apart from the basic or primary functionsl al ai .icommercial
. l a
l i
a
et
assaa s aa functions. s aa
banks render various other
services which are knowna
d dasa s
secondary
d daa s
➢ These services can abea a a
. P
. P broadly
. P
. P
classified into Agency Services and General Utility
.N
Services. ww w w
I. Agencyww w w
Functions Banks act as agents of customers and provideww ww
certain services. They
are called Agency Functions which are as follows:
l a
l i
a .
i N
. Neet t•
•
lai
Transfer of Funds
l l i N
.i. Neett
Collection and Payment of Cheques
a a l a
l i
a
sa
•
s
asaa • aa aa
Conduct Share Market Transactions
ss aassaa
•
P P add
Preparation of Income Tax Return
a P Paadd
• ww. .
Dealing in Foreign Exchange
w
w . .
w
www w
www
da
Acting as Correspondent
II. General Utility functions In addition to primary, secondary and agency functions,
commercial banks offer some services for the general welfare of the customers. They are
Pa
NNeett N Neett
called general utility services. They are as follows.
l a
l i
a .i. ➢ Safety lockers l a
lai .i. l a
l i
a
assaa ➢ Letters of credit
➢ Travelers cheques ad
ad a as aa
s
aaddaasaa
s
w.
➢ Gift cheques .P . P . P
. P
w w w w w
w
www
➢ Reference service
w
w w
ww
Lesson 13 – Warehousing
I. Choose the Correct Answer :
N 1.e
N et t remove the hindrance of _____ NNeet t
l a
l i
a .i. Warehouses
l a
la i.i. l a
l i
a
assaa (a)2. APersonWarehouse holds goods a asaadda assaa
(b) Time (c) Risk (d) Knowledge
ad
a a
d s
a aa
s
w w . P P
. (c) Distribution (d) Selling
____ center.
w
w. P
. P
w w w
(a) Marketing (b) w
Sorting
w
w w
w
3. ____ can be given as a collateral security for getting
financial assistance from bank.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t Warrant (b) Warehouse Receipt NNeet t

lalai .i. (c) Dock Receipt (d) Warehouse Warrant
(a) Dock
l a
l ai .i. l a
l i
a
assaa 4.____ warehouses are licensedaabydda as saa
the government and are permitted to accept theaaddaassaa
goods on bond.
w w. P
. P ww . P
. P
(a)Bonded w
wwStorage (c) Public (d) All the above www
wCold
(b)
w
NN e ett N Ne ett
5._____warehouses are used for storing perishable goods like
lalai.i. Fruits, vegetables, etc. l a

l ai .i. l a
l i
a
et
assaa (a) Bonded (b) Private (c)aCold a dda ass aa(d) Co-operative
Storage
a d
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w w
6.The document which authorizes to deliver the goods either in part or
w w
full
w w
is called
______
w w
(a) Warehouse Warrant (b) Dock Receipt
w w
lai
(c) Dock Warrant (d) None of these
NN e et tinstitutional warehouse started with the supportN N e ett

l a
l i
a .i. Government is _______
7.The
l a
l i
a .i.
of the
l a
l i
a
sa
assaa (a) Bonded Warehouse (b)aPublic a d da as s aa
aaddaassaa
w w . P. P Warehouse
w
w . P
. P
w w w
w
da
(c) Food Corporation of India (d) Custom Bonded

w w
II. Very Short Answer :
w
w
1.what is warehouse ?
Pa
NNe et:t N N eett

l a
l i
a .i. ➢ It is a place where goods are stored forlfuture
Ans.
a
l ai .iuse.
. l a
l i
a
assaa ➢ It acts as distribution centres a
aa dd as aa
s
aaddaasaa
s
w.
2.List the various types .ofP

. P . P
. P
w ww warehouses?
w w
w
Ans. : www www
ww
Warehouse can be classified as follows :
NN e et t B. On the Basist of Commodity Stored

A. On the Basis of Ownership
NN ee t
l a
l i
a .i. i)Private warehouses l a
l a i.i. warehouses
i)General
l a
l i
a
assaa ii)Government warehouses aaddaassaaii)Special Commodity warehouses aaddaassaa
iii)Public warehouse
w
w .P
. P iii)Cold Storages
w w .P
. P
iv)Co-operative ww
wwwarehouses www
iv)Climate controlledw
warehouses
v)Bonded warehouses
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t warehouses N Neett
lalai .i. vii)Distribution Centre warehouses
vi)Institutional
l a
l i
a .i. l a
l i
a
assaa 3.Give any two functions of warehousesaa d a
d s
a aa
s
aaddaassaa
w w . P
. P w
w .P.P
Ans. :
www w w
www
i) Storage
The surplus goods are stored properly for the purpose of supplying them at the right place at
NN e ett
the right time.
N Neett
lalai.i. ii)Price Stabilisation l a
l a i .i. l a
l i
a
et
assaa a ad d a a
Warehousing ensures price stabilisation ssasupplying
by
a goods as and when demanded. aassaa
ad
a d
4.Give a note on FCI .P . P . P
. P
.N
w w w w
wset up under the Food Corporation Act, 1964 www ww
w
➢ The FCI w was
➢ It provides storage facilities for food grains
lai
➢ The available storage capacity of FCI is 74.6 million tonnes
NN e et tAnswers :
Short
NN ee tt
l a
l i
a .i. 1.Differentiate the warehouse warrant fromlthealaiwarehouse
.i. receipt (any 3) l a
l i
a
sa
assaa Ans. : aadd aas saa
aaddaassaa
w w . P
. P w w. P
. P
www w wwww
da
Pa
N Neett N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa ad
adaassaa
aaddaasaa
s
w.
ww. P
. P w
w . P
. P
w
www w
www
ww
2. Explain Cold Storage Warehouse
NNeett
Ans. :
NN e ett
l a
l i
a .i. ➢ These warehouses are used for storing l a
la i.i. goods like fruits, vegetables,
perishable
l a
l i
a
assaa eggs, butter, fish, meat, etc. sa
aad d
➢ Goods stored in cold-storagesa a s a
can be made available, throughout the year
ad
a a
d s
a a
s a
w . P
. P
➢ Goods are transported
w in refrigerated containers and stored in
ww . P
.
refrigerated P
ww w w
warehouses
w w w w
Long Answers :
1. Explain the different types of Warehouses
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet:t N Neett
lalai .i. A. Private Warehouses
Ans.
l a
l ai .i. l a
l i
a
assaa ➢ These warehouses area
➢ To store theP a ad d as
builtsaa
a
and owned by private business and enterprises
d
a a
d s
a aa
s
ww . . P
products produced by them
w w . P
. P
w ww wWarehouses
B. Government w w w w
➢ They are created and operated by government
➢ Their services are mostly available to government only
N Nett
e N Ne e tt
lalai.i. C. Public Warehouses
➢ It is open for public at large la l ai .i. l a
l i
a
et
assaa ➢ They may be owned by an
➢ They operate asa a d d a a ssaa or some agency
individual
ad
a a
d s
a aa
s
. P
. P per the rules and regulations of the government
. P
. P
.N
w w w w w w
www
D. Bonded Warehouse
➢ These warehouses are licensed by the government
www
lai
➢ They store imported goods for which customs duty not paid by the importer
NNe et tCold storage

E.
NN e ett
l a
l i
a .i. ➢ These warehouses are used for storing l a
l ai .i. goods like fruits, vegetables,
perishable
l a
l i
a
sa
assaa aa d d
➢ Goods stored in cold-storagesa
eggs, butter, fish, meat, etc.
s
a aabe made available, throughout the year aassaa
s
can
aa dd
w w . P P
.of warehousing w w . P
. P
w
2.Explain the advantages
www wwww
da
Ans. :
i)It safe guards the stock of the merchants who do not have storing place.
Pa
NNeet tii)It reduces the distribution cost of the traders

N Neett
l a
l i
a .i. iii)It helps in selection of channel of distribution
l alai .i. l a
l i
a
assaa iv)It helps in maintaining the a
a a dd as s aa sales and avoids ‘out of stock’ position aassaa
continuous
aadd
w.
ww . P P
. opportunities for both skilled and unskilledwworkers
v)It creates employment
w w . P
. P
wwww www
ww
Chapter 14 – Transportation
NN e ett
I. Choose the Correct Answer :
N Neett
l a
l i
a .i. 1)Transport removes the hindrance of _____lalai.i. l a
l i
a
assaa (a) Time (b) Place
a d da as
(c) Person
a
saa(d) Knowledge
ad
a a
d s
a aa
s
w w .
2)A Consignment Note isP. P
prepared in _____ forms
w
w. P
. P
w
w(b)wTwo (c) Three (d) Four
(a) Onew w
www
3)_______ is a document acknowledging the receipt of goods by a carrier
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN ee t(a)t Waybill (b) Consignment Note (c) CharterNparty

Ne et(d)t Bill of lading
lalai .i. 4)Which is the fastest means of transport ? lalai.i. l a
l i
a
assaa (b) Road a a d da assaa
aaddaassaa
(a) Rail
w w . P
. P(c) Sea (d) Air
w w.P.P
w w w w w w w w
1.Define Transport
NN e e t:tAccording to K.K. Saxena, “The transport systemNNacts
ee twitht reference to the area it
lalai.i. serves in the same way as a candle does in a darklalaroom.”
Ans.
i .i. l a
l i
a
et
assaa 2.State any two services rendered aa d daa s saa
by Transport.
a d
a a
d s
a aa
s
. P
. P . P. P
.N
w ww
w of production. w w w
www
Ans. :
* It increasesw wefficiency
the
lai
*It develops and expands the market.
NN e
*It
et t in price stability by distributing goods all overNN
helps e
the
ett
country.
l a
l i
a .i. *It aids to economic growth. l a
l a i .i. l a
l i
a
sa
assaa 3.Write any two advantages ofaawater d da as saa
transport.
aaddaassaa
w w . P
. P w
w . P
. P
Ans. :
wwww w
www
da
*It is the cheapest mode of transport among the other modes of transport.
*It is most suitable for heavy loads.
Pa
NN e e tt
*There is lesser pollution in Water Transport
N Ne e tt
l a
l i
a .i. III. Short Answers l a
la i .i. l a
l i
a
assaa 1.What is Bill of Lading a a
? dd
a
s
a aa
s
aaddaasaa
s
w.
w
w . P
. P w w. P
. P
Ans. :
w w the terms and conditions of the contract w
wwcontaining ofw
w w
ww
*It is a document carriage

*It is issued by the shipping company and signed by the captain of the Ship.
NN e
*It ett
acknowledges
N N e
the receipt of the goods described in it, onet t the Ship.
board
l a
l i
a .i. *It also serves as an official receipt of goods lalai.i. l a
l i
a
assaa 2.What is Charter Partya?addaassaa a a ddaasaa
s
w w .P. P w w . P
. P
Ans. :
*When goods w
w w
ware towbe consigned in large quantity, it is advantageouswtowhirewthe whole or
substantial part of the Ship.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN eetdocument
t through which this contract is made isNknown N e etast ‘Charter Party’ may also be
lalai .i. known as ‘Voyage Charter’ or ‘Time Charter’.lalai.i.
*The
l a
l i
a
assaa *The person who hires the Shipaa d da a
is knowns saa
as Charter.
a ad daassaa
*The Charter Party brings.P
. P . P
.P
w w w the vessel and the crew under the control of the
w w w
charters.
IV. Longw ww
Answers www
1.Explain different types of Transport.
NN e e
Ans.t:t N Neett
lalai.i. Transport can be divided into three important types,
l a
l ai .namely
i . l a
l i
a
et
assaa (a)Surface Transport aa d daas saa
ad
a a
d s
a aa
s
(b)Water Transport w . . P P . P
. P
.N
w w www
www
(c)Air Transport www
lai
(a)Surface Transport
N N eett N Nee tt
Transport of People and goods by Land Vehicle is known as Surface Transport. It is also
l a
l i
a .i. called as Land Transport.
l a
l ai .i. l a
l i
a
sa
assaa The a a s
following are the various means of Land
a a dd s aaTransport
aad a
d s
a aa
s
i)Pack Animals
w w . P P
.Mule, Donkey, Camel, Elephant, etc. are usedw w w . PP
. small
www w wAnimals
da
loads in backward
Horse,
was Pack
areas, hilly tracks, forest regions and deserts known w
Animals like for carrying
ii)Bullock Carts
Pa
NN e e t tIt constitutes the predominant form of rural roadNtransport

N e e t tin India for goods traffic and
l a
l i
a .i. to some extent for passengers’ traffic. lalai.i. l a
l i
a
assaa iii)Motor Lorries and Buses aaddaassaa a a dd aasaa
s
w.
w w
Introduction of Petrol. P P
. elements of speed and greater carrying capacity.
Engine and Diesel Engine vehicles revolutionised
ww
the . P
.
RoadP
w w w w
Transport and introducing the
w w w w
ww
iv)Railways
Introducing of Steam Engine by James Watt, revolutionised the mode of transport all
N N ee tt N N e e tt
over the world. Railways are the cheapest and quickest means of transport for carrying heavy
l a
l i
a .i. goods and people over long distance.
l a
l ai.i. l a
l i
a
assaa (b)Water Transport
a a d da s
a saa
a ad daasaa
s
w w . P P
.river, etc. Water Transport are of two types : www.
Water Transport is the process of moving people, goods, etc. by Boat, Ship or
.
Sail P P
Boat over
www w
the sea, ocean, lake, canal,
i)Inland Waterways
www
ii)Ocean Waterways
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et tTransport N N e ett
lalai .i. Air Transport is the fastest and the costliest mode
(c)Air
l a
l ai .itransport.
. Commercial Air Transport is l a
l i
a
assaa now one of the most prominentamodes ofss aa transport. s aa
s
of
ad d aa overseas
a a d a
d a
ww . P
. P w w . P
. P
ww
2.Discuss the
w w
advantages of Railway Transport ( Any Five ).
w
www
Ans. :
NN e e tt N N e ett
i)Railways are well suited for carrying heavy and bulky goods over long distances.
lalai.i. ii)It can provide long distance travel throughoutlaltheai.dayi. and night with unbroken services. l a
l i
a
et
assaa iii)It can provide better protection a adanda
d as saato the goods than motor transport.
safety
a a ddaassaa
P
iv)It has regular schedule.of
. P . P
. P
.N
w w w timing and is available throughout the year.
w w w
v)It providesw ww services whether rainy or shiny weather conditions.
unaffected www
l a
l i
a NN e e t t
.i. I. Choose the Correct Answer :laiLesson 15 – Insurance
l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa 1. The basic principle of Insurance aad da as saa
is ______
aaddaassaa
w w P
(a) Insurable Interest .(b)
. PCo-operation
w
w . P
. P
w
www(d) Proximate causa w
www
da
(c) Subrogation
2. _____ is not a type of general insurance
Pa
N Ne et t
(a) Marine Insurance (b) Life Insurance
N Neett
l a
l i
a .i. (c) Fidelity Insurance (d) Fire Insurance
l a
la i .i. l a
l i
a
assaa 3.(a)Which a as saaof Insurance ?
of the following is not a function
a ad d aaddaasaa
s
w.
Lending Funds
w . P P
.Protection of Life
(b) Risk
w
Sharing
w
w . P
. P
ww w w
(c) Capital Formation (d)
w w w
w
ww
4.Which of the following is not applicable in life insurance contract ?
N Ne et t
(a) Unilateral Contract (b) Conditional Contract
N Neett
l a
l i
a .i. (c) Indemnity Contract
l lai.i.
(d) Inter-personal Contract
a l a
l i
a
assaa 5.Which one of the following is a type s
aa d da a of a
s a insurance ?
marine
ad
a a
d s
a aa
s
(a) Money Back
w w . P P
. Cargo Insurance
(b) Mediclaim
w
w. P
. P
www w
(c) Hull Insurance (d) w
www
Very Short Answers :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN1.eet tany five important type of policies N Neett

lalai .i. Ans. :
List
l a
l i
a .i. l a
l i
a
assaa ➢ Whole Life Policy a a dda a s saa
aaddaassaa
➢ Joint-Life Policy .P. P .P.P
w w w w w
w
www Assurance Policy
➢ Annuity Policy
➢ Endowment-Life
www
➢ Children’s Endowment Policy
NN ee tt N Ne e tt
lalai.i. 2.What is Health Insurance ? l a
l ai .i. l a
l i
a
et
assaa Ans. : a a d da as saa
a addaassaa
. P P . P
.agrees to provide specified health insurance atwthewagreedP
. upon
.N
• It is a contract between
• In which w w w an insurer and an individual or group
w
pricew ww the insurer
www
lai
Short Answers :
NN1.e
et t Insurance
Define
N Ne ett
l a
l i
a .i. Ans. : l a
l i
a .i. l a
l i
a
sa
assaa “Insurance is a plan by themselves a a d d aa
which
s saanumber of people associate and transfer to the aassaa
large
a a d d
w w P P
shoulders of all, risk that .attacks
. to individuals.”
w w . P
. P
www w wwww
da
- according to John Merge

2. Give the meaning of Crop Insurance.
Pa
NNe e t tThis policy is to provide financial support to farmers,

Ans. :
N Ne e tintcase of a crop failure due to
l a
l i
a .i. drought or flood
•
l a
lai .i. l a
l i
a
assaa • It generally covers all risks ofa
a ad d a
lossssaa
or damages relating to production of rice, wheat, a
a a d d s
a aa
s
w.
. P
.
millets, oil seeds and
ww P
pulses, etc.
w w . P
. P
www w
• It comes under Miscellaneous Insurance
www w
ww
2. Write a note on IRDAI

Ans. :
e•t tIRDAI – Insurance Regulatory Development and Authority

e e e t t of India is the statutory,
l a
l i
a NN
.i. independent and apex body. l a
la i N
.i. N l a
l i
a
assaa • It was constituted in thea
ad d as saathe insurance industry in India
• That governs, regulates and supervises
a aa d a
d s
a aa
s
1999
w w . P P year
.in Hyderabad. w w . P
2000, by Parliament of India Act, called IRDAI Act
. P
wwww
• It’s headquarters is
www w
N Neett
Long Answers
N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN ee t
1. tExplain the various types of Insurance
N Neett
lalai .i. Ans. : l a
l i
a .i. l a
l i
a
assaa Insurance can be broadly classified aad d a as aa
s
aaddaassaa
i)Life Insurance or w w . P
. P as
w
w .P.P
www w Life Assurance
w
www
ii)General Insurance
i)Life Insurance
e •t tIt is a contract in which the insurance company undertakes

e ee t t to insure the life of a
lalai NN
.i. person in exchange of a sum of money,lacalled l i
a N N
.i.premium l a
l i
a
et
assaa ii)Fire Insurance a ad d a as saa
ad
a a
d s
a aa
s
. PP
. of a sum of money, called premium www. . PP
.N
caused byw w w w
• It is a contract whereby the insurer undertakes to make good any loss
w
or damage
w w
iii)Marine Insurance
fire in exchange
w w
lai
•
NN e e t tof a sum of money, called premium

N N e tt
It is contract whereby the insurer undertakes to compensate marine losses in exchange
e
l a
l i
a .i. iv)Health Insurance l a
l ai .i. l a
l i
a
sa
assaa • It is a contract between and
aa da as
insurer
saa
and an individual or group
a addaassaa
• In which the insurer
ww . P
. P
agrees to provide specified health insurance at the
w w . P
.
agreed P
upon
w w w w
da
price
w
v)Crop Insurance
w ww
Pa
This policy is to provide financial support to farmers, in case of a crop failure due to drought
NN ee tt
or flood
N N e ett
l a
l i
a .i. 2.Explain the Principles of Insurance lalai.i. l a
l i
a
assaa Ans. : a ad d aa s saa
a d
a a
d s
a aa
s
w.
i)Utmost good faithw

w . P
. P w w . P
. P
www
• According
w :
w
wwintowcontract, in
to this principle both insurer and insured should enter
ww
good faith.
• Insured should provide all the information about the subject matter
NN e e tt
•
e ett
Insurer should provide all the details regarding insurance contract
N N
l a
l i
a .i. ii)Insurable Interest : l a
l ai.i. l a
l i
a
assaa • Insurable Interest means the
a a d d aas s
insured
awilla suffer any financial loss due to damage or aassaa
a add
w w P P
destruction of the.property
. or person.
w w . P
. P
iii)Indemnity : w
ww w www w
• Indemnity means compensate against loss or damages
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeett N N e e tamount
t equivalent to the actual
lalai .i. loss l a
l ai .i.
• In insurance, the insured would be compensated with
l a
l i
a
assaa iv)”Causa a a
• And not the amount exceeding the
Proxima” : P aa dd s s aa
loss
aaddaassaa
w w . . P ww . P
. P
w w
• The word w w Proxima’ means nearest cause
‘Causa w ww w
• According to this principle when the loss is the result of two or more cause, the
proximate cause is taken into consideration
NNe ett
v)Subrogation :
N Ne tt
e
lalai.i. • Subrogation means stepping the shoes onlalothers.
ai .i. l a
l i
a
et
assaa • According to this principle, onces
a ad d aa s
theaclaim
a is settled, the ownership right of the aassaa
a ad d
. P
.P
subject matter of insurance passes on to the insurer.
. P
. P
.N
vi)Mitigation :
ww w w ww w w
ww w w
• In case of mishap, the insured must take up all possible steps to reduce or mitigate the
lai
loss or damage to the subject matter of insurance.
NN e ett NN e ett
l a
l i
a .i. Lesson 16 - EMERGING SERVICE BUSINESS l a
l i
a .i.INDIA l a
l i
a
sa
IN
assaa aadd a as saa

aaddaassaa
w w . P
.
I. Choose the correct AnswerP:
ww . P
. P
w w
w which provides a licence privileges towdowbusiness
w and
da
ww
1. A continuing relationship
provides training, merchandising for a consideration is called
Pa
(a)Franchising (b)Factoring (c)Supply Chain Management (d)Exchanging
N Ne e t t and Selling of goods through electronic network

N Neetistknown as _____
l a
l i
a .i. 2.Buying
l a
lai .i. l a
l i
a
assaa (a)E-Commerce a a dda as
(b)Internet (c)Website
saa(d)Trade
aad a
d s
a aa
s
w.
. P
. P
3.An Organisation carrying out
w w
activities
. P
. P
to move goods from producer to consumer
w w
is
_____
w
ww(b)wLogistics (c)Channels (d)Marketing www
(a) Transport
w
ww
4.The main benefit of Logistics is _____
NN e ett N N e tt
e
(a)Productivity (b)Cost Minimisation (c)Profitability (d)Storage
l a
l i
a .i. 5.The main benefit of outsourcing is _____ lalai.i. l a
l i
a
assaa (a)Productivity (b)Cost Reduction a ad da as
(c) saa
Skill (d)units
ad
a a
d s
a aa
s
Very Short Answer :
w w . P
. P w
w. P
. P
w
www ?
1)Who is a Franchisee
w
www
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN ee tindividual
t who acquires the right to operate the businessN Ne etort use the trademark of the
lalai .i. seller is known as Franchisee”
*The
l a
l i
a .i. l a
l i
a
assaa 2)State two disadvantages ofaFranchising.a d da assaa
a ad d aassaa
Ans. :
w w . P
. P w w . P. P
ww
i)Fixed Royalty
w w w w
Payment : The Franchisee has to make payment of royalty
w wto the franchiser
on a regular basis. This reduces the income of the Franchisee.
NN ee tt N Neett
ii)Lack of Freedom : The Franchisee does not have the freedom to run his business in an
independent manner. He has to abide by management and operational of the franchiser.
lalai.i. 3)What is meant by BPO ? l a

l i
a .i. l a
l i
a
et
assaa Ans. : a ad da as saa
aa d daassaa
. PP
. Outsourcing . P
. P
.N
w w
• BPO – Business w
w contractual services of external companies orw
Process
w w w
wof companies to
ww
• It means getting
complete special work or process of a company
w
group
lai
• For example, Call Centres, Data Entry, etc.
NN e et t is meant by Logistics ?
4)What
N Neett
l a
l i
a .i. Ans. : l a
l i
a .i. l a
l i
a
sa
assaa “Logistics is a logical extensionaaofdtransportation
d aasaa and related areas to achieve an efficient and aassaa
s
a a dd
w .
effective goods distribution
w P
. P
system.”
w w . P
. P
w
ww: w www w
da
Short Answers
1)What are the types of Franchising ?
Pa
NN e e t ttype, the franchisee exclusively deals with a manufacturer’s

A. Product/trade name Franchising :
N Ne et t product. Examples : Kid
l a
l i
a .i. zee, French Loaf
In this
l a
lai .i. l a
l i
a
assaa B .Business format franchisingaa:ddaassaa aaddaasaa
s
w.
w w . P
. P ww . P
. P
package to thew w w w it is called as business format franchising. Example
When a franchisor awards
franchisee ww w w: McDonalds,
rights covering all business aspects as a complete business
ww
Pizza Hut, KFC, etc.
NN e etfirm
2)List the steps in factoring process (Any Three)
t enters into a factoring arrangement with a factor
N N e et t is generally a financial
l a
l i
a .i. institution for invoice purchasing.
*The
l a
la i.i. which
l a
l i
a
assaa *Whenever goods are sold on credit aa dda a s sa a
a d
a
sales an invoice is raised and a copy of the same is sent a
d s
a a
s a
to the factor,
w w . P
. P ww . P
. P
w w
wwwdue to the firm is transferred to the factor throughwassignment
*The Debt Amount ww
*On the Due Date amount is collected by the factor.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Nee t tretaining the service fees, the remaining amountNNis e ettot the firm.
lalai .i. *After
l a
l i
a .i. sent
l a
l i
a
assaa 3)What is the impact of E-Commerce a a dd a assaa
aaddaassaa
w w . P
. P on Buyers ? (Any three)
w
w .P.P
Ans. :
www w www w
➢ Buyers could buy the products or services round the clock from anywhere in the
world
➢ The prices of products bought through E-Commerce are relatively lower than those in
N Ne ett the physical market

N N eett
lalai.i. l al i
a .i. l a i
a
➢ Electronic and Software products could be downloaded immediately after purchase
l
et
assaa IV. Long Answer Questions aaddaassaa ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w
1.Enumerate the Advantages of Franchising (any Five)
www
www www
i) REDUCED RISK - The franchisee will acquire the right of running the business thus eliminating the
risk of starting a new business
tt
lai tt
ii) OPERATIONAL SUPPORT - The franchisee is provided assistance in not only finance also in
i N
.i. Nee i N
.i. Nee i
l a
l a a a a a
deciding business location, design staff training and handling day-to-day operations.
l l l l
sa
assaa aaddaasaa
s
aaddaassaa
iii) COST OF ADVERTISING - The cost of advertising for the franchisor will be reduced since this cost
ww. P
. P
will be shared by the franchisee.
w
w . P
. P
w
www w
www
da
iv) BUSINESS EXPANSION - Franchising provides an opportunity to expand business at regional,
national and global levels without additional expenditure.

Pa
2. Elucidate the features of Factoring
N Neett N Neett
l a
l i
a .i. a)MAINTENANCE OF BOOK -DEBTS
l a
lai .i. l a
l i
a
assaa ssaa saa
s
A factor takes the responsibility of maintaining the accounts of debtors of a business institution.
ad
adaa aaddaa
w.
b)
ww P
. P
CREDIT COVERAGE
. w
w . P
. P
w
www w
www
The factor accepts the risk burden of loss of bad debts..
ww
c) CASH ADVANCES
Around 80% of the total amount of accounts receivables is paid as advance cash to the client.
N Neettd) COLLECTION SERVICE

N Neett
l a
l i
a .i. l a
lai.i. l a
l i
a
Issuing reminders, receiving part payments, collection of cheques form part of the factoring
assaa service.
e) ADVANCE TO CLIENTS
aaddaasaa
s
ad
a a
d s
a aa
s
w
w .P. P w
w. P
. P
The factor is able to provide advices regarding credit worthiness of customers, and
w
www
perception of customers.
w
www
Chapter 17 – Social Responsibility of Business
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e ett N Ne e tt
lalai .i. I. Choose the Correct Answer : l a
l i
a .i. l a
l i
a
assaa 1) Which type of Responsibilityaagives d daa ssaa
aad a
d s
a aa
s
w w . P
. P w w . P
.P
the benefit to the Society out of its profits earned?
ww w w
a.Legal b. Ethical c. Moral d. Economic
w w w w
2) The Stakeholders of Socially Responsible business units are except
a .Share Holders b. Employees c. Government d. Company
N3)e
N et t Social Responsibility of business helps theNNenterprise
e et t in
lalai.i. a.Increase profit b. Decrease profit c. Sustainability
Assuming
l a
l i
a .i. d. Equilibrium l a
l i
a
et
assaa 4) Socially Responsible businessaaprovides
dda as aa
s
ad
a a
d s
a aa
s
. PP goods at
.price c. reasonable price d.moderate pricewww.. P
P
.N
w w w w w
w w
a. High price b. low
w w
5) Social Responsibility towards employees represents the following except
lai
a. Reasonable remuneration b. proper facilities c. Social security d. exploitation
N Neett N Neett
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa II.1)Very Short Answers
Give the meaning of socialaadda s
a aa
s
aaddaassaa
w w . P
. P power
w
w . P
. P
wwww w
www
da
➢ Businessmen have considerable social power.

➢ Their decisions and actions affect the lives and fortunes of the society.
Pa
N Neett
2) What are free enterprises?
N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
➢ A Business enterprise which accepts and discharges social obligations enjoy greater
assaa ssaa saa

s
freedom.
ad
adaa aaddaa
➢ Example The Govt passed consumer Protection act to prevent from adulteration, black
w.
ww. P
. P
marketing and other Anti-social practices.
w
w . P
. P
w
www
3) What is ethical responsibility? w
www
ww
➢ This includes the behaviour of the firm that is expected by the society but not codified in
law.
NN e e tt N N e tt
➢ Example Respecting the religious sentiments, Dignity of people while advertising for a
e
l a
l i
a .i. III. Short Answers
product.
l a
la i.i. l a
l i
a
assaa 1.Define the concept of SocialaResponsibility
ad da a ss aa
ad
a a
d s
a aa
s
w w . P
. P w w . P
. P
Ans. :
wwww www w
“Social Responsibility refers to the obligation to pursue those policies to make those
decisions or to follow those lines of action which are desirable in terms of objectives and
values of our society.”
N Neett N Neett - Howard .R
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et tthe kinds of Social Responsibility N Neett

lalai .i. Ans. :
2.List
l a
l i
a .i. l a
l i
a
assaa i)Economic Responsibility aaddaassaa aaddaassaa
ww . P
. P w
w .P.P
www w
ii)Legal Responsibility
w
www
iii)Ethical Responsibility
iv)Discretionary Responsibility
NN e et t Answers N Neett
lalai.i. 1.Explain the need for Social Responsibilitylalai.i.
IV Long
l a
l i
a
et
assaa i) Self Interest
a adda as saa
ad
a a
d s
a aa
s
. P
. P . P
. P
.N
w w w www
www www
A business unit can sustain in the market for a longer period only by assuming some social
obligations.
ii)Creation of Society
tt
lai tt
Business is a creation of society and uses the resources of society. Therefore it should fulfil
i N
.i. Nee N
.i. Nee
its social obligation to the society.
i i
l a
l a l a
l a l a
l a
sa
assaa saa
s ssaa
iii) Social Power :
aaddaa
* Businessmen have considerable social power.
aaddaa
ww. P
. P w
w . P
. P
w
www w
www
da
* Their decisions and actions affect the lives and fortunes of the society.
iv) Image in the Society
A business can improve its image in public by assuming social obligations.

Pa
N Neett N Neett
Good Relations with workers, consumers and suppliers help in the success of business.
l a
l i
a .i. l a
l ai .i. l a
l i
a
assaa aa aa
v)Free Enterprise
d d a a ss ddaass
a a aa
A Business enterprise which accepts and discharges social obligations
w.
ww . P
. P
enjoy greater freedom.
w
w . P
. P
ww w w
marketing and other Anti-social practices. w
w w
w
* Ex. The Govt passed consumer Protection act to prevent from adulteration, black
ww
2. How do you classify social responsibility ?
NNeet tAns. :
N N e e t t into four categories which

l a
l i
a .i. are as follows : l lai.i.
Social responsibility of business can broadly be
a classified
l a
l i
a
assaa a
i)Economic Responsibility
ad da a ssa a
aa d a
d s
a a
s a
w w . P P
. is basically an economic entity. www. . P P
w
wwwits primary social responsibility is economic i.e.w
*A Business
*Therefore
Enterprise
ww goods
produced
and services that society wants and sell them at a profit
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neet tii)Legal Responsibility NN eett

lalai .i. l a
l ai .i. within the laws of the land l a
l i
a
assaa s saa ssaa
*Every Business has a responsibility to operate
*And these laws area a d da a aaddaa
w w . P
. P meant for the good of the society
w w . P
.P
www w
iii)Ethical Responsibility
www w
*This includes the behaviour of the firm that is expected by society, but not
codified in law,
N Net
e t * Example respecting the religious sentiments andtdignity
N Ne e t of people while
lalai.i. advertising for a product.

l a
l i
a .i . l a
l i
a
et
assaa iv)Discretionary Responsibilitysa
a a dda a s a
a ad a
d s
a aa
s
. PP
.contribution to educational institution or www.
*This refers to purely voluntary
. P P
obligation that an enterprise assume for instant
.N
w w w w
ww
providing charitable
w Helping the affected people during flood or earthquake.w
*w
l a
l i
a N
.i. Nee lai
t tLesson 18 – Business Ethics and Corporate N
l a
l i
a
eett
Governance
.i. N l a
l i
a
sa
assaa a ad da
I. Choose the Correct Answer as aa
s
aaddaassaa
1.
w w . P
. P w
w . P
. P
Which of the following helps in maximising sale of goods to society?
wwww w
www
da
a. Business success b. laws and regulations c. Ethics d. Professional management
2. Ethics is important for

Pa
N Neett N Neett
a. Top management b. Middle level managers c. Non managerial employees d. All of them.
l a
l i
a .i. l a
lai .i. l a
l i
a
3.Which of the following does not ensure effective ethical practices in a business
assaa enterprise
ad
adaassaa
aaddaasaa
s
w.
. P
. P
a. Publication of a code
ww w
w . P
. P
b. Involvement of employees
w
www w
www
c. Establishment of compliance mechanisms d. none of them
ww
4. The role of top management is to guide the entire organisation towards
a. General behavior b.Organisation behaviour
N Neett N Neett
l a
l i
a .i. l a
lai.i.
c. Ethically upright behavior d. Individual behavior
l a
l i
a
assaa saa
s s aa
s
5. The ethical conduct of employees leading to standard practices results in
a. Good behavior
aaddaa ad
a a
d a
ww.P. P b. bad behavior
w
w. P
. P
wwAnswers
c. ethical behavior
wShort
II Veryw
w
www
d. correct decision making
1.What is ethics?
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. Ans. :
l a
l i
a .i. l a
l i
a
assaa ssaa ssaa
Ethics is derived from the Greek word “Ethos” Which means a person’s fundamental
aaddaa
Orientation towards life.
aaddaa
ww. P
. P w
w .P.P
w
www
2. Write any two key elements of business ethics w
www
Ans. :
• TOP MANAGEMENT COMMITMENT
N Nett
e N Neett
Top management has a very important role to guide the entire organization towards
lalai.i. Ethical behaviour.

l a
l i
a .i. l a
l i
a
et
assaa s aa s aa
• CODE
ddaa s d a
d a s
. P
.Paa
followed by the employees of the organization.
. P
. Pa
The organization principles are defined in the written document called code. It should be
a
.N
w w
w www
www www
2. Define corporate governance.
Ans. :
Corporate governance is defined as the system by which companies are directed and
lai
controlled – Cadbury committee.
N Neet tIII Short Answers N Neett

l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aasaa
s
1. What do you mean by the concept of business ethics?
aadd aaddaassaa
Ans. :
ww . P. P w
w . P
. P
wwww w
www
da
➢ It is a set of moral standards to be followed by owners, managers and

business people.
➢ These standards determine the conduct and behavior of business people.
➢ Business ethics reflects the conduct in the context of business.
Pa
N Neett 2. Why MNC’s in India ?

N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa aa aa
Ans. :
ddaass
• India has a huge market.
ddaass
aa aa
w.
ww. P
. P w
w . P
. P
• It is one of the fastest growing economies in the world
w
www w
www
. • Favourable policies of the government toward world FDI.
• Financial liberalization of the country.
ww
• Government encourages and makes continuous efforts to attract foreign investments.
N N ett
IV Long Answers
e N Neett
l a
l i
a .i. l lai.i.
1. Explain the different key element of business ethics.
a l a
l i
a
assaa Ans. :
aaddaasaa
s
ad
a a
d s
a aa
s
w
w P. P
• TOP MANAGEMENT COMMITMENT –
. w
w. P
. P
w
www w
www
➢ It is a very important role to guide the organization towards ethics behavior.
➢ The top level personnel in any organisation should work openly and strongly committed
towards ethical conducts.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett
• PUBLICATION OF A CODE –
N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa ssaa ssaa
➢ The organisation Principles are defined in the written document called ‘Code” –
aaddaa aaddaa
➢ The code covers health and safety in the work place, fair dealing in selling and marketing
activities
ww. P
. P w
w .P.P
w
www
. • ESTABLISHMENT OF COMPLIANCE MECHANISM w
www
To make sure that actual decisions match with a firm ethical standards, suitable mechanism should
be established.
N Nett
e
• INVOLVING EMPLOYEES AT ALL LEVELS
N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aa aa
It is the employees at different levels who implement ethics policies to make ethical business a
reality.
ddas
a s d a
d s
a s
• MEASURING RESULTS
. P
.Paa . P
. Paa
.N
w w
w www
www www
It is difficult to measure the end results of ethics programmes; the firms can certainly audit to
monitor compliance with ethical standards.
lai
2. What are the benefits of corporate governance?
N Neett
Ans. :
N Neett
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aa aa
• Ensures stable growth of an organisation.
d aass
• Improves the images of the company.
d ddaass
. P
. Paa
• Ensures efficient allocation of resources.
. P
. Paa
www w w
w
• Creates a strong brand as on ethical business
www www
da
• Has a positive impact on the share price

• Reduces the cost of capital for companies
• Improves investors confidence and enables raising of capital
Pa
N Neett N N ett
• It Enables corporate success and economic development
e
l a
l i
a .i. l a
lai .i.
• The organisation is managed to benefit the stakeholders
• Eliminates wastages, competition, risks and management.
l a
l i
a
assaa ad
ada a ss aa
aaddaasaa
s
w.
w w. PP
. of Business Finance
Lesson 19 – Sources
w
w . P
. P
w
wwthewCorrect Answer :
I. Choose
w
www
ww
1)What is defined as the provision of money at the time when it is required ?
N Neet t(a) Finance (b) Bank (c) Cash management (d) None
N N eet t of these
l a
l i
a .
i . 2)Internal Sources of Capital are thosea
l lai.i
that .
are _____
l a
l i
a
assaa d da
(a) generated through outsiders
a a as s
such
aasasuppliers
ad
a a
d s
a aa
s
w w .P.
(b) generated through P
loans from commercial banks
w
w. P
. P
w
wwwthrough issue of shares
(c) generated www w
(d) generated within the business
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet t3)Debenture holders are entitled to a fixed rate

N N e t_____
ofe t
lalai .i. (a) Dividend (b) Profits (c) Interestlala(d)i.iRatios
. l a
l i
a
assaa 4) Public Deposits area ad da as saa
aaddaassaa
w w . P
. P the deposits which are raised directly from ____
(b) The Directors (c) The Auditors (d) The Ownersw w. P
.P
www w
(a) The Public
www w
5) Equity shareholders are the _____ of a company
(a)Creditors (b)Owners (c)Debtors (d)Employees
N Net t6) Funds required for purchasing current assets

e N Ne tantexample of
ise
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa ssaa s aa
s
_____
aa dda a
(a) Fixed Capital Requirement (b) Ploughing back of Profits
ad
a a
d a
. P P
. Requirement (d) Lease Financing www. . P
P
.N
w w w
wwofwthe following holder is given voting right ? www
(c) Working Capital
7) Which
lai
(a) Debentures (b) Preference Shares
NNe et t (c) Equity Shares (d) Bonds NNe tt

e
l a
l i
a .i. 8) It may be wise to finance fixed assetsl a
l ai .i. ____ l a
l i
a
sa
assaa aadebts aa
through
(b)dda a s s ddaass
(a) Creditors
. P Paa Long term
. (d) Bills discounting . P
. Paa
w w w
(c) Bank overdraft
w Questions w w
w
www
da
wwAnswer
II. Very Short
1)Write a short note on Debentures.
Pa
NN e t:t
e
Ans.
N N e ett
l a
l i
a .i. Debentures are long term debt capital lalai.i. l a
l i
a
assaa ➢ It bears a fixed rated
a a da as saa
aaddaasaa
s
w.
of interest
w w . P
. P
➢ A person subscribing to Debenture is called Debenture Holder
w
w . P
. P
2)Name anyw w
ww of funds classified under borrowed funds.www
two sources w
ww
Ans. :
NN ett N N e tt
Sources of Funds classified under borrowed funds are debentures, loans from banks, public
e e
l a
l i
a .i. 3)Write any two examples of Post Office Savings
deposits, trade credit, lease financing, etc.
l a
lai.Schemes
i. l a
l i
a
assaa Ans. : a d
a daass aa
ad
a a
d s
a aa
s
w w . P
. P w
w. P
. P
www w
Examples of Post Office
i)National Savings
Savings Schemes are :
Certificate (NSC)
w
www
ii)Public Provident Fund Account (PPF)
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et tOffice Fixed Deposit Account N Neett

lalai .i. iv)Post Office Recurring Deposit Account lalai.i.
iii)Post
l a
l i
a
assaa III. Short Answer Questions a a dda as aa
s
aaddaassaa
w w . P
. P w
w .P.P
w w
1)Define Business
w wFinance
w
w w
w
Ans. :
• “The Finance Function is the process of acquiring and utilizing funds by a business” - R.C.
NN e e tt
Osborn
NN e ett
lalai.i. • “Finance is that business activity which is concerned
l a
l i
a .i.with the acquisition and conservation l a
l i
a
et
assaa ofEnterprises.”
Capital Fund, in meeting the financials
-B.O. Wheeler ad
a da a s aaand overall objectives of Business
needs
a a d a
d s
a aa
s
. P
.P . P
. P
.N
2) What is Pledge ? w w w w
Ans. :
www w www w
lai
➢ A customer transfers the possession of an article with a creditor (banker) and receives
N Neett loan
N Neett
l a
l i
a .i. l l i
a .i.
➢ Till the repayment of Loan, the article is under the custody of the creditor
a l a
l i
a
sa
assaa aa aa
➢ If the debtors fails to repay the loan, the creditor will auction the article pledged and
d
adjust the outstanding loan
daass ddaass
. P
. Paa . P
. Paa
w w w w w
w
ww of Business Finance, on the basis of Period.www
da
3). Classify w
the Sources
Ans. :
Pa
N Neet t N Ne e t t
Business Finance is classified into three types, on the basis of period
l a
l i
a .
i . (i)Long Term Finance – more than Five Years.
a a
by issues of shares and debentures, termlloans
l i .
i .Long term finance can be mobilised
l a
l i
a
assaa s saoneayear and below five years. Medium Term aassaa
from commercial banks, etc.
d
by d
(ii)Medium Term Finance – above
a a a a
public deposits, medium term loans from Banks, etc.a ad d
w.
w w . PP
. – below one year. Short Term Finance canwbewraised
Finance can be mobilised
w . PP
.through
w
ww trade credit, cash credit, etc.
(iii)Short Term
publicwdeposits,
Finance
www
ww
N Ne etLong
t Answer Questions N Ne e tt
l a
l i
a .i. IV.
l a
lai.i. l a
l i
a
assaa 1).Ans.Explain a ass aa Finance. (Any Five)
the kinds of sources of Short-term
aa d d aa d daasaa
s
:
ww . P. P ww . P
. P
w w w w
(i)Loans and Advances
ww w w
• Loan is a direct advance, made in lumpsum which is credited to Separate Loan Account, in
the name of Borrower
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN•eIte
t
cantbe re-paid in one or more instalments
N N ee tt
lalai .i. (ii)Trade Credit l a
l ai .i. l a
l i
a
assaa • It is the credit extended by oneaatrader d da as saa
aa
to another for the purpose of purchasing goods and ddaassaa
services
ww . P
. P w w . P
.P
w
wwand
• It is very simple
wconvenient method of raising short-term Financewww w
(iii)Pledge
NN e e tt N N e ett
• A customer transfers the possession of an article with a creditor (banker) and receives loan
lalai.i. • Till the repayment of Loan, the article is underlaltheai.custody

i . of the creditor l a
l i
a
et
assaa •theIf outstanding
the debtors fails to repay the loan,a
aa d d as
the saa will auction the article pledged and adjust aassaa
creditor
a a d d
loan
. P
.P . P
. P
.N
(iv)Mortgage w w w w w ww
w
ww w w
• It is a type of Loan taken from Bank, by depositing the title deeds of Immovable Assets like
lai
Land & Building
NN e et t Loan
(v)Clean
N N eett
l a
l i
a .i. Banks provide clean loan to certain customer onlaltheai.basis
i . of their character, capacity and l a
l i
a
sa
assaa capability without any physicalasecurityad d a assaa
a d
a a
d s
a aa
s
w w . P
. P w w . P
. P
w
wwwpersonal investment Avenues www w
da
2. Explain any five

Ans. :
Pa
N Ne e tistthe safest long-term investment totally tax free NNeet t

(A)Public Provident Fund
l a
l i
a .i. (i)It
l a
la i .i. l a
l i
a
assaa (ii)PPF Account can be opened in Bank s
a ad da a orsaaOffice
Post
aaddaasaa
s
w.
w w .
(iii)The Money deposited cannotPP
. interest from this account
be withdrawn before 15 years
w
w . P
. P
w w
(iv)An investor can w wearn compound
w
w w
w
ww
(B)Real Estate Fund
NN e et tvalue of real asset may increase depending uponNN e ett

(i)Buying a Flat or Plot is the best decision of investment options
l a
l i
a .i. facilities available therein
(ii)The
l a
la i.i. the area of location and other support
l a
l i
a
assaa (C)Investment in Metals aaddaassaa aa dd aasaa
s
w w . P P
like.Gold, Silver and Platinum is one of the oldest andw w . P
. P
www w
(i)Investment in Metals
investment products www w evergreen
(ii)The values of the Metals rise slowly and steadily with market conditions.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t Office Savings Schemes N N eett

lalai .i. There are different types of Postal/Small Savings
(D)Post
l a
l i
a .iSchemes
. namely : l a
l i
a
assaa i)National Savings Certificatea(NSC) ad da s
a aa
s
aaddaassaa
w w . P
. P w
w .P.P
www w
ii)Public Provident Fund Account (PPF)
wwww
iii)Post Office Fixed Deposit Account
iv)Post Office Recurring Deposit Account
NN e et t Deposits NN e ett
lalai.i. Fixed Deposits can be opened from a Minimumlalperiod
(E)Bank
a i .i. of 7 days to Maximum period of 10 l a
l i
a
et
assaa Years aad da as saa
aaddaassaa
. P
. P . P
. P
.N
period of 1 Yearw
tow ww
Recurring Deposit Account is another investment option. It can be opened
w w
for
w
a minimum
ww 10 Years
www
CHAPTER – 20 International Finance
l a
l i
a NN e e tt
lai
I. Choose the Correct Answers
.i. 1. An instrument representing ownership interest
l a
l i
a N N e e tt
.i.securities of a foreign issuer l a
l i
a
sa
in
assaa is called _____

a adda as saa
aaddaassaa
w w . P
. P
a. An ownership certificate b. a depositary receipt.
w w . P. P
wwww www w
da
c. an ownership receipt d. None of the above.
2. Issuance of DRs is based on the increase of demand in the

Pa
N Ne ett a. International market

e
b. Local market
N N ett
l a
l i
a .i. c. Existing shareholders
l a
la i .i.
d. All of the above
l a
l i
a
assaa 3. ADRs are issued in aaddaassaa aa ddaasaa
s
w.
a. Canada
w w.
b. ChinaP
. P c. India d. The USA
w w. P
. P
w
4. Depositary w w w that are traded in an international market other
receipts ww w wthe United
than
ww
States are called
N Neett
a. Global Depositary Receipts
N N ett
b. International Depositary Receipts.
e
l a
l i
a .i. l lai.i.
c.Open Market Depositary Receipts d. Special Drawing Rights.
a l a
l i
a
assaa 5.home currency.
a add a as aaissued in the currency other than the
s
_________ bond is a special type of bond
ad
a a
d s
a aa
s
w w .P. P w w . P
. P
www w
a. Government Bonds
c. Corporate Bonds www w

b. Foreign Currency Convertible Bond
d. Investment Bonds
II. Very Short Answers :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN1.eet tare foreign Institutional Investors? N Neett

lalai .i. Ans. :
Who
l a
l i
a .i. l a
l i
a
assaa aa dda as saa
aaddaassaa
w w . P
. P
called as “Institutional Investors”.
w
w .P.P
Organizations like hedge funds, Insurance companies, Pension funds and Mutual funds can be
2. What is a w
w
ww receipt?
depository
w
www
Ans. :
N Nett
e N Neett
A depository receipt is a negotiable financial Instrument issued by a bank to represent a foreign
lalai.i. l a
l i
a .i.
company’s equity shares or securities.
l a
l i
a
et
assaa 3.Ans.What: is GDR? aaddas
a aa
s
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w
w www
www www
GDR is an instrument issued abroad by company to raise funds in some foreign currencies and is
listed and traded on foreign stock Exchange.
lai
4. What is ADR?
N Nee t: t N Neett
l a
l i
a .i. Ans.
l a
l i
a .i. l a
l i
a
sa
assaa saa
s ssaa
ADR is a dollar denominated negotiable certificate representing a non- US company in us market
aaddaa
which allows the US citizens to invest in overseas securities.
aaddaa
w w . P
. P w
w . P
. P
ww of international finance. w
www
da
ww
5. Explain the importance
Ans. :
Pa
N Neett➢
N Neett
It helps in ascertaining the Economic status of the various countries.
l a
l i
a .i. ➢
l lai .i.
It helps in comparing the inflation rates.
a l a
l i
a
assaa aa aa
➢ It helps in calculating exchange rates of various currencies.
➢
d da as s d aas
It helps in understanding the basics of international organisations
d s
a a aa
w.
6. What is meant byww P P

. currency convertible bonds? w
w . P
. P
International finance mediate and resolve financial disputes among member nations.
.
ww w w foreign
w
w w
w
ww
Ans. :
• It is a special type of bond issued in the currency other then the home currency.
N Neett N Neett
• In other words companies issue foreign currency convertible bonds to raise money in foreign
l a
l i
a .i. l a
lai.i. l a
l i
a
assaa aa aa
currency.
d daass d a
d s
a s
.P Pa a
. of FDI. . P
. Paa
w w
7. Explain any three disadvantages
w w w
w
Ans. : www www
EXPLOITING NATURAL RESOURCES
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i.
The FDI companies deplete natural resources. -As a result such resources are not available for
l a
l i
a
assaa
the usage of common man in the host country.
aassaa aassaa
HEAVY OUTFLOW OF CAPITAL
P Paadd P Paadd
ww. . w
w . .
➢ Foreign companies are said to be take away huge funds in the form of dividend,
w
www
royalty fees etc.
➢ This cause a huge outflow of capital.
w
www
NOT TRANSFERING TECHNOLOGY
N Nett
e N Neett
➢ Some foreign enterprises do not transfer the technology in developing countries.
lalai.i. l a
l i
a .i.
➢ They mostly transfer second hand technology to host countries.
l a
l i
a
et
assaa a ad a
dassaa
ad
a a
d s
a aa
s
P
8. State any five features.of
. PFCCB. . P
. P
.N
w w w www
Ans. : www www
➢ FCCB is issued by an Indian company in foreign currency.
lai
➢ These are listed and traded in foreign stock exchange
N Neett
➢ It is a convertible debt instrument
N Neett
l a
l i
a .i. ➢
l l i
a .i.
It carries interest coupon. It is unsecured.
a l a
l i
a
sa
assaa aa aa
➢ It can be converted into equity or depository receipt after a certain period.
➢
ddaass ddaass
It gives its holders the right to convert for a fixed number of shares.
. P
. Paa . P
. Paa
ww
9. Distinguish between GDR and ADR
w w w
w
www www
da
Ans. :
Pa
NNeett
Basis Global Depository
N Ne ett American Depository
l a
l i
a .i. Denomination Receipts (GDR)
l ala i .i.
It is denominated in terms
Receipts (ADR)
It is denominated only in US
l a
l i
a
assaa aassaa
of any freely convertible
ad
ad
Dollars
aaddaasaa
s
w.
currency.
To Whom it
ww. P
. P
It is issued to Investors in
It is issued only to Investors
ww. P
. P
is issued ?
w
w w
w one or across more
who are residents of the
markets simultaneously
United States of Americaw w w w
ww
Listed in Non US Stock Exchange

American Stock Exchange
such as London Stock
NNeett Exchange or Luxemburg

N N eett
l a
l i
a .i. Approval Stock Exchange
Issue of GDR does not
l ala
Issue i.i.ADR requires
of
l a
l i
a
assaa require Foreign
a ad da as
Regulatory Clearances
aaapproval
s Exchange
from the Securities
Commission
ad
a a
d s
a aa
s
w w .P. P (SEC) of United States of
w
w. P
. P
Negotiationw
w
wItthewisworld
negotiable all over
America
It is negotiable only in ww w w
America
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa aaddaassaa
aaddaassaa
w w. P
. P w
w .P.P
Lesson 21 w w
wwSMALL AND MEDIUM ENTERPRISES ANDww
MICRO, wwHELF
SELF
GROUPS
NN e ett
I. Choose the correct answers:
N Neett
lalai.i. 1. MSMED Act was enacted in the year lalai.i. l a
l i
a
et
assaa a) 2004 b) 2007
a ad da assaa
c) 2006 d) 2008
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w ww www
2. MSMEs are important for the nation’s economy because they significantly contribute to
www
a) industrial production b) exports www
c) employment d) all the above
3. Self help groups convert the savings into a common fund known as
l a
l i
a NN e ett
a) Common fund
lai
b) Group corpus fund c) Group fund
.i. 4. There are ______ distinct modes of credit tolalSelf

ai N N
.iHelpeettd) none of the above
. Groups. l a
l i
a
sa
assaa a) 1 b) 2 c) 3 d) 4
a ad da a s aa
s
aaddaassaa
ww . P
. P
5. Investment limit of a micro enterprise under manufacturing sector does not
ww . P
. P
www w www w
da
exceed__________ lakhs.
a) 10 b) 20 c) 25 d) 50
II. Very short answer questions

Pa
N Ne et tsome examples for micro enterprises. NNeet t

l a
l i
a .i. 1. Give
l a
lai .i. l a
l i
a
aaddaasaa
s
w.
i)Clay Pot Making

w w . P
. P w
w . P
. P
www w
ii)Fruits and Vegetable Vendors w
www
ww
iii)Transport- three wheeler tempos and Autos
N Neett
iv)Repair Shops
N Neett
l a
l i
a .i. v)Cottage Industries
l a
lai.i. l a
l i
a
assaa 2.Ans.What: is the aim of NEEDS ?aaddaassaa ad
a a
d s
a aa
s
w w .P. P w
w. P
. P
www w w
www
i)To encourage the educated youth to become the first generation entrepreneurs
ii)To provide entrepreneurship development training to educate the young entrepreneurs, preparing
business plans, etc.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN3.eet t is a Self Help Groups? N Neett

lalai .i. Ans. :
What
l a
l i
a .i. l a
l i
a
assaa aaddaassaa
aaddaassaa
w w P
. P
i)it is a small informal voluntary association
. w
w .P.P
www w w
www
ii)it is created for the purpose of enabling members, to reap economic benefit out of mutual help,
solidarity and joint responsibility
III. Short answer questions
NN1.eet tout the products produced by MSME in Tamil N

List
Nee
Nadu? tt
lalai.i. Ans. : l a
l i
a .i. l a
l i
a
et
assaa aad d aassaa
ad
a a
d s
a aa
s
i)In Tamil Nadu, MSME Sector produces a wide variety of products in almost all fields.
. P
.P . P
. P
.N
w w w www
www www
ii)The prominent among them are textile, electronic products, engineering products, auto ancillaries,
leather products, chemicals, plastics, garments, jewellery, etc.
2. What is the role and significance of MSMEs in Indian Economy?
l a
l i
a N
.i. Ne tt
Ans. :
e
i)Employment Potential lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa aadd asaa
s
(a) MSME are mostly labour intensive
a aaddaassaa
(b) Thus they provide more employment opportunities to a large number of people
ww. P
.
ii)Low Production Cost P w
w . P
. P
w
www w
www
da
(a) MSME employs cheap labour

(b) Thus facilitates production of goods at low cost
iii)Quick Decision Making
(a) In most cases, owner himself manages the enterprises
Pa
N Neett N N ett
(b) Hence, decision making becomes easy and effective
e
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa 3.Ans.Explain a a dd as saa
any three features of Self Help Group.
a aaddaasaa
s
w.
:
w w . P
. P w
w . P
. P
www w
The Three Features of Self Help Group are : w
www
ww
i)The motto of every group members should be “Saving first- Credit later”
ii)The size of a Self Help Group ranges between 10-20 members
NN e ett N Neett
l a
l i
a .i. IV. Long answer questions l lai.i.
iii)The Groups need not be registered
a l a
l i
a
assaa 1. Explain MUDRA Bank aaddaassaa ad
a a
d s
a aa
s
ww. P
. P w
w. P
. P
Ans. :
wwww w
www
i) The Government of India has launched MUDRA Bank with a capital amount of Rs.20,000 Crores
ii) And Credit Guarantee Corpus of Rs. 3,000 Crore
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i.
iii) To Help MSME and start ups to solve problems relating to Financing
l a
l i
a
assaa ssaa ssaa
iv) Mudra refinances through Pradhan Mantri Mudra Yojana (PMMY).
aaddaa aaddaa
v) These measures will greatly increase the self confidence of young, educated or skilled workers to
w w . P
. P
become first generation entrepreneurs.
w
w .P.P
2. What are w
w
w of SHGs? (any 5)
wObjectives
the
w
www
Ans. :
N Nett
i)Focusing on empowerment of women.
e N Neett
ii)Saving people from the clutches of Money Lenders.
lalai.i. l a
l i
a .i. l a
l i
a
iii)Creating the habit of Saving in the minds of the people who are economically backward.
et
assaa ssaa s aa
s
iv)Promoting entrepreneurship skills among women.
aaddaa a
v)Elevating the economic standard of the member’s family
d
a a
d a
. P
.P . P
. P
.N
w ww www
w- wTYPES OF TRADE
Lesson 22w www
lai
I. Choose the correct answers
N Ne ett N Nee tt
1. The purchase of goods from a foreign country is called----------
l a
l i
a .i. l a
l ai .i. l a
l i
a
sa
assaa 2. When goods are imported foraadthedapurpose assaaof export it is called as----------- aaddaassaa
a) Import b) Export c) Entrepot d) Re-export
ww .P
. P
a) Foreign Trade b) Home Trade c) Entrepot d) Trade
ww.P
. P
wwaswawconnective link between the producer and the consumer.
wwww
da
3. ---------- acts
a) Trade b) Industry c) Commerce d) Business
Pa
N Neett
4. The aim of home trade is ------------------.
N N eett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa aa aa
a) To raise the standard of living b) To provide the essential goods and services economically
c) To raise the national income

d da a s s
d) To obtain all types of goods.
ddaass
a a aa
w.
w w . P
. P
5. Internal trade can be classified into ----------categories
w
w . P
. P
a) Three www w
b) Four c) Two d) Five
w
www
ww
NN e ett
II. Very short answer questions
N Neett
l a
l i
a .i. 1. Give the meaning of Trade? l a
lai.i. l a
l i
a
assaa Ans. : aaddaasaa
s
ad
a a
d s
a aa
s
w w .P. P w
w. P
. P
i)The buying and selling of goods and services consist of trade
wwww
ii)Trade is conducted to earn Profit
w
www
2. What is Internal Trade?
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Nee t: t N Neett
lalai .i. Ans.
l a
l i
a .i. l a
l i
a
assaa ssaa ssaa
i)Buying and Selling of Goods and Services within the boundaries of a nation is called Internal Trade
a ddaa
ii)It is also called Domestic Trade or Home Trade
a aaddaa
.
3. What is import trade? .
w w PP w
w .P.P
Ans. : wwww w
www
i)Import Trade means buying goods, from a foreign country for domestic use
NN e e tt N Neett
ii)Examples : India imports Petroleum products from Gulf Countries
lalai.i. 4. Explain the meaning of Entrepot trade. lalai.i. l a

l i
a
et
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w www
i)Entrepot Trade means importing of Goods from one country and exporting the same to Foreign
Country
www
ii)It is also known Re-Export Trade
www
l a
l i
a N
.i. Ne
III.et t answer questions
Short
lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa 1.Ans.Explain a a dda a aa
the types of Internal trade. ss
aaddaassaa
:
w w . P
. P w
w . P
. P
www w w
www
da
i) Internal Trade consists of two main subdivisions namely
a) Wholesale Trade b) Retail Trade

Pa
N Neetta) Wholesale Trade
N Neett
l a
l i
a .i. l a
lai .i. l a
l i
Buying goods in large quantities from the producers and selling them in smaller quantities to
a
assaa aa aa
retailers and traders is known as Wholesale Trade
ddaass ddaass
aa aa
w.
b) Retail Trade
ww. P
. P w
w . P
. P
w w
It deals with distribution of goods in small quantities to the consumers
www www
ww
2. Give three examples of India’s Import and Exports items

Ans.t: t tt
i .
i N
. Nee i N
.i. Nee i
aal a
l a EXPORT ITEMS
aal a
la IMPORT ITEMS
aal a
l a
ass i) Petroleum Products
ii) Jewellery
aaddaass a s
a s
Mineral Fuels, including oil
ad
a d
iii) Automobile
w
w .P. P Gem, Precious Metals
w
w. P
. P
Electrical, Machinery and Equipment
w
www w
www
IV. Long answer questions
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN1.eet t are the features of Internal trade? (any 5) NNeet t

lalai .i. Ans. :
What
l a
l i
a .i. l a
l i
a
assaa a add a assaa
aaddaassaa
ww P
. P w
w .P.P
i)The Buying and Selling of goods takes place within the boundaries of the same country
.
www w w
www
ii)Payment for goods and services is made in the currency of the home country
iii)Goods can be delivered using locally available modes of transport
iv)It involves transactions between the producers, consumers and the middlemen
N Nee tt N Neett
v)It does not involve any custom/import duty but need to pay the taxes to the government
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa 2. Explain briefly the differentatypes
add a as saa
of Foreign Trade
ad
a a
d s
a aa
s
. P
. P . P
. P
.N
w w w www
www www
Ans. :
Foreign Trade consists of Three Main Sub-divisions namely,
lai
A)Import Trade
N eett
B)Export Trade
N N Neett
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa aa aa
C)Entrepot Trade
ddaass ddaass
A)Import Trade
. P
. Paa . P
. Paa
www w w
w
i)Import Trade means buying goods from a foreign country, for domestic use
www www
da
ii) E.g. India imports petroleum products from Gulf Countries
B)Export Trade
Pa
N Neett N Neett
i)Export Trade means the sale of Domestic Goods to Foreign Countries
l a
l i
a .i. l a
lai .i.
ii)E.g. export of Iron Ore from India to Japan
l a
l i
a
assaa ddaassaa
ddaasaa
s
iii)Export Trade is necessary to earn foreign exchange, to increase national income
aa aa
w.
ww.
C)Entrepot Trade P
. P w
w . P
. P
w
www w
www
i)Entrepot Trade means importing of Goods from one Country and exporting the same to
ww
Foreign Countries
N Neett N N ett
ii)Example- Indian Diamond Merchants in Surat, import uncut raw diamonds, from South Africa,
e
l a
l i
a .i. l a
lai.i. l a
l i
a
they cut and polish the diamonds in India, and re-export them to the International Diamond
assaa Market in Amsterdam.

aaddaasaa
s
ad
a a
d s
a aa
s
w
w .P. P w
w. P
. P
w
wwwLesson 23 – Channels of Distribution
www w
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNI.eet t THE BEST ANSWER: N N eett

lalai .i. 1. Trade middlemen who acts as a link wholesaler
CHOOSE
l a
l i
a .iand
. customer refers to a l a
l i
a
assaa (a) Producer (b) Broker (c)aaretailer d da as saa
aaddaassaa
ww . PP (d) customer
. in the channel of distribution? www. .PP
www w
2. Who is the First middleman
www
(a) Wholesaler (b) Producer (c) Retailer (d) customer
3. _________ buys the goods from the producer and sell it to the retailers.
NN e ett N Ne e tt
lalai.i. 4. ________ are agents who merely bring thelabuyer
(a) Manufacturer
l a .i.and the seller into contact.

(b) Wholesaler (c) Retailer (d) Consumers
i l a
l i
a
et
assaa (a) Broker (b) Commissionaagent ad da a s saa
(c) Selling Agent (d) Stockiest
ad
a a
d s
a aa
s
. PP
. be classified into __________ categories www. . P
P
.N
w w w
wTwow (c) Five (d) Four www
5. Merchant middlemen can
(a) Three w (b)
l a
l i
a NNe
II. e
VERY
.i. 1. Who is a middleman? lai
t t SHORT ANSWER QUESTIONS: NNeet t
l a
l i
a .i. l a
l i
a
sa
assaa Ans. :
aaddaasaa
s
aaddaassaa
w w . P. P w
w . P
The term ‘Middlemen’ refers to all those who are in the link between the primary producer
. P
and the ultimate consumer in the exchange of goods or service.
2. Definew
w w
www
da
Ans.w:w
Retailer.
The retailer is the last of the many links in the economic chain whereby the consumer’s wants
are satisfied smoothly and efficiently by retailers. - S. Evelyn Thomas
Pa
N Neet t3. Who is a broker?

N Neett
l a
l i
a .i. Ans. :
l a
lai .i. l a
l i
a
assaa s saa saa
s
(i) A Broker is one who bargains for another and receives commission for his service.
a a d daa
(ii) He is paid ‘brokerage’ for his services.
aaddaa
w.
. P
. P
4. What are the classifications
ww
of the merchant middlemen
w
w . P
. P
Ans. :
w w
* Brokersww* Del- Credere Agents * Warehouse keepers www w
ww
* Factors * Commission Agents * Auctioneers.

5. Who are the mercantile agents?
N Ne ett Ans. :
N Neett
l a
l i
a .i. l a
lai.i.
(i) A businessman appoints a person to buy and sell goods on his behalf and gives him
the right to borrow money on the security of goods.
l a
l i
a
assaa III. SHORT ANSWER QUESTIONS: aas saa
(ii) He is known as mercantile agent.
aa d d ad
a a
d s
a aa
s
w w .P. P w
w. P
. P
ww w w w
w w
w
1. Explain the types of mercantile agents.
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N i).e
N e t t A Broker is one who bargains for another N and e
N et t commission for his
lalai .i. Broker:
l a
l ai .i. receives
l a
l i
a
assaa ii). Factor: A factor is a mercantile s saa s aa
s
service. He is paid ‘brokerage’ for his services.
aa dd aa
agent to whom goods are entrusted for sale by a a d
a a
d a
w w . P
. P w w . P
.P
www w
principal.
wwww
iii). Commission Agents: A commission agent buys and sells goods on behalf of the
principal for a fixed rate of commission for all his transactions.
NN ee tt
2. Explain any three characteristics of wholesalers.
N Ne e tt
lalai.i. Ans. : l a
l ai .i. l a
l i
a
et
assaa ofdd a
(a) Wholesalers buy goods directly
aa a s s
from
aaproducers or manufacturers,
ad
a a
d s
a aa
s
. PP
. credit facility to retailers
(b) They need large amount capital to be invested in his business,
. P
. P
.N
w w w www
www www
(c) They generally provide
lai
IV. LONG ANSWER QUESTIONS:
NN1.e
et t are the characteristics of retailers? NNeet t
What
l a
l i
a .i. Ans. : l a
l ai .i. l a
l i
a
sa
assaa (i)
aad d
Retailer generally involves a as saain a variety of items.
dealing
a ad d aassaa
(ii)
(iii) Generally,w w . P P
. involve buying on credit from wholesalersw
Retail trade is normally carried on in or near the main market area.
andw w . P P
. for cash
w w www
da
retailers selling
toww
consumers.
(iv) A retailer has indirect relation with the manufacturer but a direct link with the
consumers.
Pa
NN e ett N Neett
l a
l i
a .i. 2. What are the functions of Wholesalers ? lalai.i. l a
l i
a
assaa Ans. : aad d aas saa
a d
a a
d s
a aa
s
w.
ww . PP
. collects the goods from manufacturersworww . PP
. in
bulk. w w ww
a. Collection of Goods: Wholesaler
w w w producers
ww
b. Storage of Goods:
(i) Wholesaler collects and stores them safely in warehouses, till they are sold out.
NN e ett N N ett
(ii) Perishable goods like fruits, vegetables, etc. are stored in cold storage facility.
e
l a
l i
a .i. (i) Wholesaler sells goods to different retailers.lalai.i.
c. Distribution:
l a
l i
a
assaa (ii) Thus he performs the function a ad d a as saa
ad
a a
d s
a aa
s
w w . P
. P of distribution
w w . P
. P
www
d. Financing:
w www w
(i) Wholesalers provide financial support to producers and manufacturers by providing
money in advance to them.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et
Hetalso sells goods to retailer on credit.
N N ee tt
lalai .i. e. Risk Taking:
(ii)
l a
l i
a .i. l a
l i
a
assaa (i) Wholesaler buys finished goods a a dd a as s aa
from the producer and keeps them in the warehousesaa d a
d s
a aa
s
the time.
w w . P
. P ww . P
.P till
(ii) They arew w

sold
w w
and assumes the risk arising from price, spoilage ofww wwand changes in
goods,
demand.
N N e e t:t
3. What are functions of Retailers?
N Neett
lalai.i. Ans.
l a
l ai .i. l a
l i
a
et
assaa i).A Buying:
retailer buys a wide variety a d
ofa daa s saa
ad
a a
d s
a aa
s
. P
. P goods from different wholesalers after estimating
. P
. P
.N
customer’s demand. w w w w
ii). Storage:w A
w w maintains a ready stock of goods and displayswthem
wretailer ww w in the shop.
lai
iii). Selling:
NNee
➢t tThe ee t tto the demand taste and
retailer sells the goods in small quantities according
NN
l a
l i
a .i. ➢ He employs efficient methods of sellinglatolaincrease
preference of consumers. i .i. his sales turnover. l a
l i
a
sa
assaa iv). Grading and Packing: aaddaassaa a ad d aassaa
w w . P P . P P
.the goods which are not graded by manufacturerswandwwwholesalers.
.
w w in small lots for the convenience of consumerswww
da
➢ The retailer grades

wwgoods
➢ He packs
v). Risk-bearing:
Pa
N Neet tA retailer always keeps stock of goods in anticipation toftdemand and bears the risk of
N N e e
l a
l i
a .
i . l a
lai .i.
loss due to fire, theft, spoilage, price fluctuations, etc.
l a
l i
a
a ad d aasaa
s
w.
w w . P
. P w w . P. P
www w Lesson 24 - Retailing www w
ww
NN e e tt
1. Retailers deal in _________ quantity of goods.
N N eett
l a
l i
a .i. (a) Small (b) Large (c) Medium (d) Limited l a
la i.i. l a
l i
a
assaa 2. Small scale fixed retailers include__________
a add a assaa
ad
a a
d s
a aa
s
(a) General stores (b) .
ww P. P
Pedlars (c) Cheap Jacks (d) Hawkers
ww . P
. P
w
wwwhich
3. Small shops
w
w deal in a particular line of products are calledwwas__________
w
(a) Market Traders (b) Single line stores (c) Sugar Market (d) Street stalls
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN4.ee t t traders who deal in lo priced articlesNwith Nee t

no tfixed place of business
lalai .i. (a) Shopping mall (b) Super Markets (c) StreetlalaStalls
____mobile
i .i. (d) Itinerant traders l a
l i
a
assaa aa d daa s aa
s
aaddaassaa
w w . PP
. QUESTIONS: w w .P.P
II. VERY SHORT
ww ww ANSWER
w w w w
1. State the meaning of multiple shops.
Ans. :
NN e et t of identical retail shops with similar appearance

N Ne et t deal in standardized
lalai.i. consumer products established in different localities
A number
l a
l a i .owned
i . by manufacturers are called as
normally
l a
l i
a
et
assaa Multiple Shops.
a ad da a s saa
a a ddaassaa
. P
.
2. What is meant by Vending
P Machines?
. P
. P
.N
w w w w ww w w
Ans. :
w w
(i) Automatic vending machine is a new form of direct selling.
w
w
lai
(ii) It is a machine operated by coins or tokens.
N Ne e tt N N e tt
(iii) It’s are placed at railway stations, airports, petrol pumps, etc.
e
l a
l i
a .i. l a
l ai .i. l a
l i
a
sa
assaa 3.Ans.What: are specialty stores?aaddaassaa aaddaassaa
ww . P P
.a particular type of product under one product w ww . P
. P
w w w
da
w w
(i) Specialty Stores deal in
(ii) For example, Tirunelveli Halwa, Bengali Sweets, etc.
w w line only.
Pa
N Ne e tSHORT
t ANSWER QUESTIONS: NNeet t
l a
l i
a .i. III.
l ala i .i. l a
l i
a
assaa 1. Explain the characteristicsaofadsuperda a s saa
aaddaasaa
s
w.
ww . P
. P markets.
w
w . P
. P
Ans. :
ww w w w w w w
ww
(i) Supermarkets are generally situated at the main shopping centres.

(ii) The goods are sold on cash basis only. No credit facilities are made available.
N N e et t the demerits of multiple shops? NNeet t

(iii) Supermarkets are organized on departmental basis.
l a
l i
a .i. 2. Explain
l a
la i.i. l a
l i
a
assaa Ans. :
aadda as saa
ad
a a
d s
a aa
s
i. Limited variety
w w . PP
. in limited range of products. w
w. P
. P
w w w w
* Multiple shops deal only
w
w w
w
ii. Absence of services
•
N Neet t N N e tt
Customers do not get credit, home delivery and other facilities.
e
lalai.i. l a
l i
a .i. l a
l i
a
assaa d da assaa
d aassaa
PP a
Kindly send me your district
aquestion
PP d
aa
ww.. w
w ..
wwww wwww
NN e e tt N Ne ett
lalai .i. iii. Lack of personal touch l al i
a .i. l a
l i
a
assaa (a) The owner loses direct personal aa d da as s aa
aaddaassaa
(b) The paid staffs doww . P
. P contact with the customers.
take personal interest in each and every customer. w
w .P.P
www w not
wwww
IV. LONG ANSWER QUESTIONS:
NN e e tt N N e e tt
lalai.i. 1. State the features of Departmental stores.lalai.i. l a
l i
a
et
assaa Ans. : a a d d a assaa
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w w w w
www www
i). Large Size:
# A department is a large scale retail showroom requiring a large capital investment by
lai
forming a joint stock company managed by a board of directors.
NN e e tt
ii). Wide Choice:
NN e tt
e
l a
l i
a .i. * It acts as a universal provider of a wide rangelaoflaproducts
i .i. from Pin to Car. l a
l i
a
sa
assaa * To satisfy all the expected human a a d d aas
needs
aa
s
under one roof
aaddaassaa
w w . P
.
iii). Departmentally organizedP w
w . P
. P
w
wwforwsale are classified into various departments. www w
da
(a) Goods offered

(b) Each department specializes in one line of product and operates as a separate unit.
Pa
NN e e tt
iv). Facilities provided:
N N e ett
l a
l i
a .i. # It provides a number of facilities and serviceslatolathei.i.customers. l a
l i
a
assaa # Such as restaurant, rest rooms,aarecreation,
d d aa s sapacking,
a frees home delivery, parking, etc. aassaa
aadd
w.
w .
v). Centralized purchasing
w P
. P w
w . P
. P
w
wwware made centrally and directly from the manufacturers.
(a) All the purchases w
www
ww
(b) It operates separate warehouses whereas sales are decentralized in different departments.
N Ne et:t
2. Explain the different types of retailers.
N N e ett
l a
l i
a .i. Ans.
l a
l ai.i. l a
l i
a
assaa i).# TheItinerant or Mobile Traders
traders who have noP a a d da as saa
ad
a a
d s
a aa
s
w w . P
. to another place in search of customers. www.
fixed place of sale are called Itinerants.
. P
P
w w
# They move fromw wone place
w
w w
# They are also known as Mobile traders.
➢ Peddlers And Hawkers
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe et tStreet Traders N N ee tt

lalai .i. Market Traders
➢
➢
l a
l i
a .i. l a
l i
a
assaa ii). FixedCheap
➢ Jacks Traders
Shop Retailers P a adda as s aa
a addaassaa
w w . P
. permanent establishment to sell their goods w ww . P
.P
ww
Shop Retailers.w
w
* The retailers who maintain
www are called Fixed
* They do not move from place to place to serve their customers.
N Ne et tare:
*They
N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa s aa s aa
a. Fixed Shop Small Retailers
dda a s d a
d a s
. .P a a
b. Fixed Shop Large Retailers
P . P
. Paa
.N
w ww www
wwStallsw www
a. Fixed Shop Small Retailers
* Street
lai
* General Stores
NNee t t* Single Line Stores N Ne ett

l a
l i
a .i. * Specialty Stores l a
l i
a .i. l a
l i
a
sa
assaa * Second Shops
aaddaassaa
a a dd aassaa
w w . P
. P
b. Fixed Shop Large Retailers
w w . P
. P
w w
wwpermanent establishment and dealing in large scalewwarew
da
The retailersw
having called Fixed shop
large scale retailers.
Pa
N N e t t Stores
(i) Departmental Stores
e N Neett
l a
l i
a .i. (ii) Multiple
l a
lai .i. l a
l i
a
assaa (iii) Super Markets
a addaassaa
aaddaasaa
s
w.
(iv) Consumer CooperativeP P

w w. . P
stores
w
w . . P
w w w
(v) Shopping Mallsw w
w w
w
ww
(vi) Mail order houses
N Ne ett
(vii) Online Shopping
N N eett
l a
l i
a .i. l a
lai.i. l a
l i
a
assaa I. CHOOSE THE CORRECT aadd asaa
s
Lesson 25 – International
a Business
ad
a a
d s
a aa
s
w w . P
. P ANSWER
w w . P
. P
w w
www services, intellectual property, human assets,wwtechnology
1. Movement of goods, w and So
on among the countries.
(a) International Trade (b) International Business (c) Entrepot Trade (d) Internal Trade
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN2.ee t t are imported for the purpose of re-exportN N e et t country is termed as

lalai .i. (a) Import Trade (b) Export Trade (c)Entrepot
Goods
l a
l i
a .i. (d) Internal Trade
to another
l a
l i
a
assaa 3. Movement Of Goods, Services s saa s aa
s
Trade
a ad da a a d
a a
d a
w w . P
. P among the Countries
ww . P
.P
www w
(a) International Trade
www w
(b) International Business (c) Entrepot Trade (d) Internal Trade
4. Selling of goods from home country to foreign country is called
(a) Home Trade (b) Entrepot Trade (c) Foreign Trade (d) Joint Venture
NN e et t SHORT ANSWER QUESTIONS: NNeet t

lalai.i. 1. What do you mean by international business?
II. VERY
l a
l i
a .i. l a
l i
a
et
assaa Ans. a a ddas
a aa
s
aa ddaassaa
. PP
. all those business activities which take w . PP
. the
.N
w ww placew
w
wwof the country. www
(a) International business denotes beyond
geographicalw limits
lai
(b) It involves not only the international movements of goods and services
NN eett
2. What is meant by Export Trade ?
N Ne e tt
l a
l i
a .i. Ans. : l a
l ai .i. l a
l i
a
sa
assaa called Export Trade. a a da
➢ When the firm of a country sells
d a s saaand services to a firm of another country is aassaa
goods
a a dd
w w .
➢ Example : the sale ofPP
. handicraft, leather products, etc. by Indian Company
w w . PP
to.other
w
countries w
www w
da
ww
3. What is meant by Import Trade ?
Pa
NNeet tWhen the business firm of a country purchasesNgoods

Ans. :
Nee tfrom
t another country, it is
l a
l i
a .i. called import trade.
➢
l a
la i .i. l a
l i
a
assaa d d aa ssaapetroleum products, electrical goods.
➢ Example : Indian Enterprise purchases
aa aaddaasaa
s
w.
w w . P
. P
4.What is meant by Entrepot Trade ?
w w . P
. P
Ans. : wwww www w
ww
➢ When the firm of a country imports goods for the purpose of exporting the same
goods to the firms of some other country with or without making any change in goods
N Ne ett N
meant for export is known as Entrepot Trade.
Ne tt
e
l a
l i
a .i. l a
lai .i. l a
l i
a
➢ Example : Indian Company imports crude oil from Iran and Export it as Petroleum
assaa III. SHORT ANSWER QUESTIONS: s saa s aa

s
after refining, to Nepal.
aadd aa ad
a a
d a
1. Explain any threeww .P P
. of International business. w
w. P
. P
www w features
w
www
Ans. :
(a) Involvement of Countries.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t business can take place only when transactions N Nee toccur

t across different countries
lalai .i. (b) Use of Foreign Exchange.
International
l a
l ai .i. l a
l i
a
assaa a ad da as s aa
aa ddaassaa
basis of foreign currency..P P P P
Where countries trade with one another, it has to exchange the goods and services on the
w w . w w . .
www w
(c) Legal Obligations. www w
(i) Foreign trade is to be conducted strictly in accordance with the export and import policy of
N Ne ett
the country concerned.
N Ne et ttransactions.
lalai.i. (ii)
l l ai .i.
Government intervention is direct in respect of international
a l a
l i
a
et
assaa 2.Explain a as
the Features of Entrepot Trade.
a a d d saa
ad
a a
d s
a aa
s
Ans. :
. PP
.on such goods . P
. P
.N
a)Import Duty isw w w w w w w
w
w w not levied
b)These goods are reprocessed and repacked for re-export
w w
lai
c)Such goods are kept in the Bonded Warehouses till they are re-exported
N N e ett N Neett
l a
l i
a .i. l a
l ai .i. l a
l i
a
sa
assaa IV. LONG ANSWER QUESTIONS:
1. List out the advantages of a ad daa s aa
s
aaddaassaa
w w . P
. P international trade
w
w . P
. P
ww w
w
da
Ans. :
ww
i). Geographical Specialization:
w
w
(a) International business is required to exchange the surplus resources resulting from
Pa
NN e e tt N Neett
geographical specialization for deficit resources in other countries
l a
l i
a .i. ii). Economic Development: l a
lai .i. l a
l i
a
assaa a a d da a s saa countries greatly in achieving rapid aassaa
aadd
w.
(a) International business helps the developing
ww . P P
.India, Brazil and South Korea
economic development.
w w . P
. P
www w
(b) For example China,
www w
ww
iii). Generation of Employment:

International business generates employment opportunities by assisting the expansion.
NN e e tt N N e ett
l a
l i
a .i. iv). Higher Standard of Living: l a
la i.i. l a
l i
a
assaa a a dd a
This exchange of goods and servicesas aa
s
a ad
among the countries enhances the standard of living a
d s
a aa
s
of people.
w w .P. P w w . P
. P
www w www w
v). Prospects for Higher Profit:
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t business helps the firms which produceNN e etint excess to sell them at
lalai .i. relatively higher price to various countries in thelalinternational
International
a i .i. market.
goods
l a
l i
a
assaa a ad da a s saa
aaddaassaa
w w . P
. P w w .P.P
www w www w
N Nett
e N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aaddas
a aa
s
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w
w www
www www
l a
l i
a NN e ett
lai i N
.i. Nee
.i. Chapter 26 – Export and ImportlalaProcedures
tt
l a
l i
a
sa
assaa I. Choose the Correct Answer aadd aasaa
s
aaddaassaa
ww. P
. P :
w
w . P
. P
1)EPC stands forw w
www www
da
a.Export processing commission b. Export Promotion Council

Pa
N Ne et t
c. Export Carriage council
N Neett
d. Export Promotion Congress
l a
l i
a .i. 2) STC is expansion for
l a
lai .i. l a
l i
a
assaa a.State Training Centre b.aState ad d a as saaCouncil
Training
a d
a a
d s
a aa
s
w.
c. State Trading Centre .P P . P P

w ww .d. State Trading Corporation
w w
w .
w w
3) An ------------- is w w w wto buy the
document prepared by importer an sent to the exporter
ww
goods
a.Invoice b. Indent c. Enquiry d. Charter Party
NN4)eet t------------------- receipt is an acknowledgementNofNreceipt

e et t of goods on the ship issued
l a
l i
a .i. by the Captain
The
l a
la i.i. l a
l i
a
assaa a ad
a.Shipping Bill b. Bill of Lading d a a s saa
c. Mate’s Receipt d. Consular Invoice
a a dd aasaa
s
w w .P P
. ------------- agent to fulfil the customs formalities
w w . P
. P
ww
a.Clearing
w w
5) The Exporters appoint the
Agent b. Forwarding Agent c. Commission Agent w
ww
wFactor
d.
II. Very Short Answers

N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neet t is meant by Indent ? N Ne ett

lalai .i. 1)What
l a
l i
a .i. l a
l i
a
assaa Ans.➢ : An Indent is an order received
a ad d aa ssaa
a addaassaa
w w . P
. P from abroad for export of goods. i.e. sale
w w .
of P
. P
goods
➢
w w
The order may
w w w w
be directly received from the importer or through an agent
w w
2)Mention the types of Indents
NN e ett
Ans. :
N Neett
lalai.i. There are three types of Indent, namely lalai.i. l a
l i
a
et
assaa a)Open Indent
a a ddaa ssaa
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
b)Closed Indent and
w w w w www
wwIndent
c) Confirmatory www
lai
3)What is meant by Letter of Credit ?
NNe e
Ans.t t: NN e ett
l a
l i
a .i. ➢ It represents a guarantee given by the limporter
a
l ai .i. bank to the exporter. l a
l i
a
sa
assaa ➢ That the amount in the billd
a a da
will as
be
saa upon its presentation by the exporter oraassaa
honoured
aadd
his agent.
w
w . P
. P w w. P
. P
www wwww
da
III. Shortw Answers

1)What are the contents of Indents ?
Pa
N Neet t: N Neett
l a
l i
a .i. Ans.
l a
lai .i. l a
l i
a
assaa Contents of an Indent are :
ad
adaassaa
aaddaasaa
s
w.
a.Quantity of goods sentP P P P

w w . . w
w . .
www w
b. Design of goods w
www
ww
c.Price
N N ett
d. Nature of Packing shipment
e N Neett
l a
l i
a .i. e. Mode of Shipment
l a
lai.i. l a
l i
a
assaa f.Period of Delivery
aaddaasaa
s
ad
a a
d s
a aa
s
g. Mode of Payment .P . P . P
. P
w ww
w by Mate’s Receipt ? w w
w
2)What w iswmeant www
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet
➢ tIt’s the document issued by the captain of the shipe
N N ett
lalai .i. ➢ Acknowledging the receipt of goods onla l ai .i.by him to the port of specified l a
l i
a
assaa aa aa
board
destination
dda a s s ddaass
. P P a
➢ This contains details like a
quantity
. of packing, etc. . P
. P
of goods shipped, number of packages, conditionaa
ww
of package, condition
w w documents used in Import Trade ?www w w w
3)What w wthe
are
Ans. :
N Ne e tDocuments
t N Neett
lalai.i. The used in Import Trade are
l a
l :
ai .i. l a
l i
a
et
assaa i)Import License
aadd a assaa
ad
a a
d s
a aa
s
. P
. P . P
. P
.N
ii)Indent
w ww www
iii)Letter ofwww
Credit www
iv)Bill of Entry
l a
l i
a N
.i. Ne tt
v)Bill of sight
e lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa IV. Long Answer Questions a addaasaa
s
aaddaassaa
ww. PP
. of Import Trade ? w
w . P
. P
ww w
w
da
1.What are the objectives

Ans. :
w w w
w
Pa
NN e et Developing
i)Achieving Rapid Industrialization –
t NN e et tby importing advance
l a
l i
a .i. technology, scarce raw materials, capital goodslallikeai.machinery,
countries can achieve rapid
i. etc.
industrialization
l a
l i
a
assaa ii)Meeting consumer demandsa–addaassaa aaddaasaa
s
w.
Certain goods areww . PP

. not available or cannot be produced to meetwthewgrowing
w . P
. P
demand, suchww w w either
goods can be imported to meet the supply of those goods. www
ww
iii)Upgrading standard of living of the people –
N Ne e t t
Consumers
N N e et
are able to use a wide variety of goods like cell t
phone, car, laptop, television,
l a
l i
a .
i . etc. produced in foreign countries.
l alai.i. l a
l i
a
assaa iv)Meeting Shortage Situationa–addaassaa a ad d aasaa
s
w . PP
. essential commodities are imported to overcome
During famine, earthquake,
w flood, drought, abnormal prize increase
w
situations
w . P P
.above
food
situations. w www
grains, vegetables and other
www w the
v)Strengthening Defence –
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN ee tMany Neetforce
t Countries import defence equipment for itsNarmed t to ensure its sovereignty
lalai .i. and territorial integrity l a
l i
a .i. l a
l i
a
assaa aadda as saa
a ad d aassaa
w w . PP
. bill of lading and Charter Partywww. .P P
w w w w
2.Distinguish between
w
w w
Ans. :
NNe ett NN e ett

lalai.i. Basis Bill of Lading
l a
l ai .i.Charter Party l a
l i
a
et
assaa i)Meaning
a ad da
acknowledging a s sa a
It represents a document
receipt of
It refers to an agreement to hire a
a a
whole or major part of a ship, when ddaassaa
. P
. P . P
. P
.N
goods on board for carrying the goods exported is heavy
w w
w w w w
www destination
them to specified port of
www
ii)Transferable It can be transferred to It cannot be transferred to third
lai
third party by endorsement party
NNe e tt and delivery

NN e et t be raised against it
l a
l i
a .i. iv)Crew
iii)Loan
l a
l i
a .i.Master and Crew become the agent
Loan can be raised against it
Loan cannot
l a
l i
a
sa
assaa aa of exporter for a temporary period aassaa
Master and Crew remain
ddaass
the agent of Ship Owner
d d
v)Lease
. P
. Paa
It is not a Lease of Ship
It is a Lease of Ship
. P
. P a a
www w w
w
www www
da
CHAPTER – 27 : Facilitators of International Business

Pa
N Ne ett N N eett
l a
l i
a .i. l ala i .i. l a
l i
a
assaa I. Choose the Correct Answer a a d: aa
d ssaa
a addaasaa
s
w.
w w.
1) General Agreement on P
. P
Tariff and Trade was signed on
w w. P
. P
w
www b. 29-October-1947 c. 28-October-1947 w
a.30-October-1947 d.w
w w
26-October-1947
ww
2) WTO was established on
N Ne e t t
a.1-1-1996 b. 1-1-1997 c. 1-1-1995 d. 1-1-1994 t t
N Nee
l a
l i
a .
i . l a
la i.i. l a
l i
a
assaa aa aa
3) The headquarter of WTO is located at
dda a s s ddaass
. PP a
a.New York b. London c. Geneva
a d. Brazil
. of WTO is entrusted with . P
. Pa a
w w
4) The day to day administration
w w w w
w b. General Council c. Administrative Councilwwd.wGeneral Body
wwCouncil
a.Executive
5) World bank is located at
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. a.Washington
l l i
a .i.
DC b. New York c. Tokyo d. Hongkong
a l a
l i
a
assaa II. Very Short Answersaaddaassaa aaddaassaa
ww. P
. P w
w .P.P
1.What iswww?
WTOw w
www
Ans. :
NN e e
*The tWorld
t Trade Organisation was established on 1stNN e et t1995.
January
lalai.i. *It has 164 Countries l a

l i
a .i. l a
l i
a
et
assaa *India is one of the three founder a d
a da as
members
sa a
ad
a a
d s
a a
s a
. PP
. three years . P
. P
.N
w w w w w w
wwtowtake a decision on all vital matters under the multi-lateral
www trade
*It meets almost once in every
*It is empowered
lai
agreement
NN e e tt
2.What do you mean by World Bank ?
N Neett
l a
l i
a .i. Ans. : l a
l ai .i. l a
l i
a
sa
assaa *International Bank for Reconstruction
aaddaas aa
s
a d
a a
d s
a aa
s
Bank w w. P
. P w w . P
. P
and Development is commonly known as World
w
w www w
da
*It was setupw

w1944
in
*It is located at Washington DC
Pa
NN e
*It
e t toffices all over the World
has
NN e e tt
l a
l i
a .i. 3.What is Special Drawing Rights ?lalai.i. l a
l i
a
assaa Ans. : a ad d aas saa
a d
a a
d s
a aa
s
w.
w w . P P .
.the year 1969 as supplementary internationalwreserve
w w P
. P
*SDR created byw
www the IMF in
www asset
ww
*It is described as paper gold
NN e e tt N Neett
l a
l i
a .i. III. Short Answers l a
la i.i. l a
l i
a
assaa 1.Write any Three objectives aad da as s
of
aIMF
a
ad
a a
d s
a aa
s
w w. P
. P w
w. P
. P
Ans. :
ww ww w
w w
w
*Promoting International Monetary Co-operation
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN ee t t balanced International Trade N Neett

lalai .i. *Ensuring Exchange Rate Stability
*Ensuring
l a
l i
a .i. l a
l i
a
assaa 2.Mention the Functions a a dda assaa
aaddaassaa
ww . P
. P of SAARC (any Three)
w
w .P.P
Ans. : w www w
www
*Monitoring and co-ordinating the development program
NN eet t intersectoral priority

*Determine
N Neett
lalai.i. *Mobilising co-operation within and outside lthealaregion
i .i. l a
l i
a
et
assaa 3.Write any three benefits a ad da as s
of WTO
aa
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w www
Ans. :
www www
*Promoting International Peace and creating conducive environment for conducting
lai
international trade.
NN e et t the trade disputes amicably among the member N N e ett

l a
l i
a .i. *It promotes the standard of living of the peoplelalabyi.iincreasing
*It settles
. their income level from free
countries.
l a
l i
a
sa
assaa trade. a a d da a ss aa
aad a
d s
a aa
s
ww . P
. P ww. P
. P
w
IV. Long Answers
w ww
da
w w
1)Point out the Objectives of WTO (any Five)
w w
Pa
Ans. :
NNeet tImproving the standard of people living in member
N Neett
l a
l i
a .i. ➢ Expansion of trade and goods and services
➢
l a
l ai .i. countries.
l a
l i
a
assaa ➢ Protecting the environment a
aa d d a s s aa
aaddaasaa
s
w.
ww . P
. P
➢ Ensuring full employment and large steady growth volume of real income
ww . P
.
andP
w w utilisation of World’s resources for sustainable
effective demand.
➢ Making wwoptimum w w of
wwdevelopment
ww
Member Countries.
NN eett N N ee tt
l a
l i
a .i. 2)Write down the function of IMF (anylFive) alai.i. l a
l i
a
assaa ➢ It acts as short-term creditd
a a da a s saaat the international level
institution
a d
a a
d s
a aa
s
w w .P
➢ It provides machinery P
.currencies of the member countries from whichwaw
for ordinary adjustments of exchange rates
w . PP
. can
w w of other nations
➢ It has a reservoir
wwcurrencies
borrow
of
www borrower
➢ It promotes economics stability and global growth by encouraging countries adopt

sound economic and financial policies.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Ne t
➢ tIt helps member countries correct their imbalancee
e N N tbalance
ine t of payment.
lalai .i. l a
l i
a .i. l a
l i
a
assaa a ad da as s aa
aaddaassaa
CHAPTER – 28 : Balance
ww . P
. P of Trade and Balance of Payments
ww .P.P
w w Answer :
wwCorrect
I. Choose the
w
www
1) The Statement which discloses a record of transactions between the residents of one
N Ne e t tBalance of Payment
country and residents of foreign country
N N e ett
lalai.i. a. b.
a i
a
Balance
l l .i.
of Trade
l a
l i
a
et
assaa a ad a as
c. Statement of Receipts and Payments
d saad. Accounting Statement
ad
a a
d s
a aa
s
. P
. P . P
. P
.N
w ww
2) The Balance of Payments
w councils consists of
www
wwAccount
a.Current b. Capital Account www
c. Receipts and Payments Account d. Both Current Account and Capital Account
l a
l i
a NNeett
lai NN
.i. a.Official Capital b. Private Capital c. BankinglalaCapital
i ee tt
3) Foreign capital long- term loan and foreign currency reserve are recorded under
.i. d. Both Private and Official Capital l a
l i
a
sa
assaa 4) The term official capital includes a ad da as saa
aa d d aassaa
w w . P
.
a. RBI holdings of foreignP currencies b. Special Drawing Rights held by
ww
the . P
. P
Government
w wB www w
da
wwA and
c. Both d. Foreign Investment
5) Balance of payments surplus indicates

Pa
N Ne et t
a. Exports are more than the Imports
N Ne et t
b. Imports are more than Exports
l a
l i
a .
i . l a
lai .
i . l a
l i
a
assaa II. Very Short Answers aaddaassaa aa
c. Exports and Imports are at Equilibrium d. Exports and Imports are above Equilibrium
ddaass
aa
w.
w w . P P
. of Payments ?
1.What do you mean by Balance
w w . P
. P
Ans. : www w www w
ww
➢ It refers to a systematic record of all economic transaction between the resident of one
NN e ett➢ For example 1 Year

N N e ett
country and the residence of foreign country during a particular period of time
l a
l i
a .i. 2. What do you mean by Balance of Trade ?lalai.i. l a
l i
a
a ad daasaa
s
➢ It denotes thew w .P P
. between the value of import and the valuewof w w . P P
.during a
year.w w w w difference
w w w export
➢ If the export of a country exceeds it’s imports, it shows favourable balance of trade.
➢ If the import exceeds the exports, it shows unfavourable balance of trade.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e e tt N Nee tt
lalai .i. III. Short Answers l a
l i
a .i. l a
l i
a
assaa 1.What are the credit items shown aadda assaa
aaddaassaa
w w . P
. P in Current Accounts (any Three)
w
w .P.P
Ans. :
wwww www w
a)Goods Export (Visible)
b) Invisible Exports
NN e e t t Service sold abroad N Neett

lalai.i. d)Banking Service sold abroad
c)Transport
l a
l i
a .i. l a
l i
a
et
assaa e)Insurance Service sold abroadaaddaassaa ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w www
2. State the www of Capital Account
components www
lai
Ans. :
NN e et tAccount consists of these components NNeet t

Capital
l a
l i
a .i. a)Private Capital l a
l i
a .i. l a
l i
a
sa
assaa b)Banking Capital a a ddaa ssaa
aaddaassaa
c)Official Capital ww . P
. P w
w . P
. P
www w w
www
da
IV. Long Answers

Pa
NN eett
1.Write any Five Features of Balance of Payments
N Ne ett
l a
l i
a .i. Ans. : l a
la i .i. l a
l i
a
assaa ➢ It is a systematic records of alla
a a dd as saa transactions between one country and aassaa
economic
aad d
w.
. P
.
certain other countries
➢ It is preparedw w P of the world.
ww . P
. P
www
➢ It contains
w for
ww w
a period of three months or twelve months that is usually
all receipts and payments both visible and invisiblew
12 months
ww
➢ It includes all economic transactions both recorded on current account and capital
account
N Neett N N ett
➢ It indicates country’s position in Foreign Trade
e
l a
l i
a .i. l a
lai.i. l a
l i
a
assaa 2.Distinguish between BalanceaaofddPayment
aassaaand Balance of Trade ad
a a
d s
a aa
s
Ans. :
ww .P. P w
w. P
. P
w
www w
www
Nature Balance of Payment Balance of Trade
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Ne tt
i) e
NIt ise
N ae
t t showing the
lalai .i. Meaning
l l i
a .i.net effect of export and import
It is a systematic recording of
a
statement
l a
l i
a
assaa aa of a country. aa
all economic transactions
ddaass
between the residents of one
ddaass
. . Paa
country and residents of foreign
P .P.Paa
w
wwwcountries during a particular
period
w w w w
ii) Nature ofw
w It records only w
It records both the transactions w
transactions
Transactions relating to goods and services
relating to goods
Recorded
N Nett
eiii)Capital It records Capital Transactions
N N e ett
It does not record Capital
lalai.i. Transactions
l a
l ai .i.Transactions
l a
l i
a
et
assaa a a
iv)Indicator ofIt is a true indicator of It is not a true indicator of
s sofa s s a
Economic
Status economy
a a da
economic performance
d a an economic prosperity
ad
a a
d a
. P P
. Side is made equal to unfavourable or in w . P
. P
.N
isw w
v)Net Position It always remains Balanced that It may be at favourable or
w w
wwwPayment Side
Receipt
state www w
equilibrium
l a
l i
a N
.i. Neett
lai l a
l i N
.i. Neett
Lesson 29 – Elements of Contracts
a l a
l i
a
sa
assaa a ad daa s s aa
aaddaassaa
ww P
. P
I. CHOOSE THE BEST.ANSWER:
w
w . P
. P
w
www w
www
da
1. An Agreement enforceable by law is a

(a) enforceable acceptance (b) accepted offer (c) approved promise (d) contract
Pa
N Ne e tt N Neett
2. Every promise and every set of promises forming the consideration for each other is
l a
l i
a .i. l lai .i.
an (a) agreement (b) contract (c) offer (d) acceptance
a l a
l i
a
assaa 3.(a)Void agreement signifies
Agreement illegal in naturead
a d a assaa
aaddaasaa
s
w.
w w . P P
. procedure (d) Agreement against public policy
(b) Agreement not enforceable by law
ww. P
. P
w w w
(c) Agreement violating
w legal
w w w w
ww
4. Acceptance to be valid must be absolute

(a) be absolute (b) be unqualified (c) both be absolute and unqualified (d) be conditional
NN5.e etcontract
t with or by a minor is a N N e ett
l a
l i
a .i. (a) valid contract (b) void contract lalai.i.
A
l a
l i
a
assaa (c) voidable contract d) voidable aad da a s saa
ad
a a
d s
a aa
s
w
w .P. P at the option of either party
w
w. P
. P
www w w
www
II. VERY SHORT ANSWER QUESTIONS:
1. What is law?
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe et:t N N eett

lalai .i. ➢ A ‘set of rules’ which governs our behaviour
Ans.
l al i
a .iand
. relating in a civilized society. l a
l i
a
assaa ➢ So there is no need of Law ina
aad d aassaa society.
uncivilized
aaddaassaa
w w . P
. P
2. What is meant by Contract?
w w . P
. P
Ans. : wwww www w
➢ A “contract” is an agreement enforceable by law.
➢ The agreements not enforceable by law are not contracts.
N 3.e
N e t t many parts of Indian contract law are classified?
N Ne ett
lalai.i. How
l a
l ai .i. l a
l i
a
et
assaa Ans. :
a ad daa s saa
ad
a a
d s
a aa
s
(i) General Contracts
. P
.P . P
. P
.N
w w w www
www
(ii) Special Contracts
www
lai
NN1.eet t is meant by Offer? N Ne ett

l a
l i
a .i. Ans. :
What
l a
l ai .i. l a
l i
a
sa
assaa When one person signifies to another aadd a as saa
his willingness to do from doing anything, with aa a ddaassaa
w w . P P
. other person either to such act he is said to make
to obtaining the assent of that
w w . P
. Pview
a proposal.
w w by Agreement? www w
da
2. What do w wmean
you
Ans. :
Pa
N Neett N N e ett
(a) Every promise and set of promises forming consideration for each other is an agreement.
l a
l i
a .i. (b) In short, Agreement = Offer + Acceptance.
l a
lai .i. l a
l i
a
aa d d aasaa
s
w.
. P
. P
3. What is meant by Voidable
w w
Contract?
w w . P. P
Ans. :
w ww w w w ww
ww
➢ An agreement which is enforceable by law at the option of one or more parties but not
at the option of the other or others is a voidable contract.
NN e ett N
N ett
➢ This is the result of coercion, undue influence, fraud and misrepresentation.
e
l a
l i
a .i. IV. LONG ANSWER QUESTIONS: lalai.i. l a
l i
a
assaa 1. Explain the essentials of a aValid
d
a a
d s
a saa
Contract
ad
a a
d s
a aa
s
Ans. :
w w . P
. P w
w. P
. P
ww
i). Offer andw w
Acceptance w
www
There must be two parties to an agreement namely one party making the offer and the other
party accepting it.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e e t t Relationship NN e ett
lalai .i. (a) The parties must have the intention to create
ii). Legal
l a
l ai .i. relationship between them. l a
l i
a
assaa s sanature
a is not at all a contract. ssaa
legal
a d da a
(b) An agreement of Social or domestic
a aa ddaa
ww .
iii). Lawful Consideration P
. P w w .P.P
➢ Asw w w
per Contract Act under Sec.2 (d) Consideration means w
w ww w in return.
something
➢ A contract without consideration becomes invalid
N Nee t tThe object of agreement should be lawful and legal.

iv). Lawful Object (Section 23)
N N eett
lalai.i. (a)
l a
l ai .i. l a
l i
a
et
assaa v). (b)FreeItConsent
must not be immoral, illegal ors
(Section 13 a&ad d a a saa to public policy.
opposed
a ad d aassaa
. P P
. must be free and genuine.
14)
. P
. P
.N
➢ Consent of w w w
w agreeing upon same thing in the same sense atw ww w
wtime i.e. there
➢ Consentwwmeansthe parties
wsame
the
should be consensus – ad – idem.
l a
l i
a N
.i. N t:t
Ans.
lai
2. Difference between Contract and Agreement
ee
l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa aaddaasaa
s
aaddaassaa
ww. P
. P w
w . P
. P
w
www w
www
da
Pa
N Neett N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa ad
adaassaa
aaddaasaa
s
w.
ww. P
. P w
w . P
. P
w
www w
www
ww
N Neett N N eett
l a
l i
a .i. l a
l ai.i. l a
l i
a
assaa a adda as aa
s
ad
a a
d s
a aa
s
w w . P
.
3. Explain the classificationPof Contract on the basis of the Performance.
w
w. P
. P
i). Executedw www
Contract w
www
➢ A contract in which both the parties have fulfilled their obligations under the contract.
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe e t
➢ tFor example X contracts to buy a car from Y by paying
N N e e t tcash, Y instantly delivers his
lalai .i. car. l a
l ai .i. l a
l i
a
assaa ii). Executory Contract aaddaassaa a ad a
d s
a aa
s
w w .
(a) A contract in which bothP
. P
the parties are yet to fulfil their obligations.
w w .P.P
(b) It is said w
tow
w w
be an executory contract. www w
iii). Unilateral Contract
N Ne e tt N Nee tt
A unilateral contract is a one sided contract in which only one party has performed his
lalai.i. l l ai .i.
promise or obligation, the other party has to perform his promise or obligation.
a l a
l i
a
et
assaa iv).A contract
Bilateral Contract
aa d d a s
a aa
s
a a d
ad
aassaa
. P
.P
in which both the parties
. P
. P
commit to perform their respective promises is called
.N
bilateral contract. w w w w
www w www w
lai
Lesson 30 – Performance of Contract
NN e ett NN ee tt
l a
l i
a .i. I. CHOOSE THE CORRECT ANSWER: lalai.i. l a
l i
a
sa
assaa 1)On the valid performance ofatheaddcontractual
aassaaobligations by the parties, the contractaaddaassaa
a.Is discharged b.ww .P. Penforceable c. Becomes void d. Becomes legalww.P
. P
ww ww
da
Become
w w
2) Which of the following persons can perform the contract?
w w
a.Promisor alone b. Legal representatives of promisor
Pa
NN e e tt
c. Agent of the promisor d. All the above
NN eett
l a
l i
a .i. 3) A, B, C jointly promised to pay Rs.50,000 tolaD.laBefore
i .i. performance of the contract, C l a
l i
a
assaa dies. Here, the contract aaddaassaa a a ddaasaa
s
w.
.
a. Becomes void on C’s death
ww P
. P w w. P
. P
b. Should bew w
ww by A and B along with C’s legal representatives.
performed www w
ww
c. Should be performed by A and B alone.
NN e ett
d. Should be renewed between A, B and D.
NN e ett
l a
l i
a .i. 4) Which of these parties cannot demand performance
l a
la i.i. of promise? l a
l i
a
assaa a. Promisee
aa dd a as s aa b. Any of the Joint Promisees
aad a
d s
a aa
s
w w . P
. P
c. On the death of a Promisee, his Legal Representative. d. Stranger to
ww
the . P
. P
Contract
5) A person w
is w w
saidw
to be a third person if he is not a www w
a.promisor b. promise c. agent d. Legal Representative
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Ne ett N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa II. Very Short Answers aaddaa ssaa
aaddaassaa
. P
. P
1.State the ways of performing
ww a Contract.
w
w .P.P
Ans. : wwww w
www
There are mainly two ways of performing a Contract such as
NN e e tt
i) Actual Performance
N Neett
lalai.i. ii) Attempted Performance l al ai .i. l a
l i
a
et
assaa 2.Who is a Legal Representative a ad da a
?
s saa
a ad a
d s
a aa
s
. P
.P . P
. P
.N
w w w w ww
www www
Ans. :
If the promisor dies, the legal representative of a deceased promisor are bound to perform
lai
the contract.
NN ee t t is an Agent ?
3.Who
N Neett
l a
l i
a .i. Ans. : l a
l i
a .i. l a
l i
a
sa
assaa The promisor may employ a competent aad daas saa
a a d
person such as agent to perform the promise, if thedaassaa
w w P
. P
contract is not formed on.personal condition.
w w . P
. P
w
wwwby Reciprocal Promise ? wwww
da
4.What is meant
Ans. :
Pa
NN e et t which form consideration or part of consideration

Promises
N Ne etfort each other are called
l a
l i
a .i. ‘reciprocal promise’ l a
l ai .i. l a
l i
a
assaa III. Short Answers aaddaassaa aaddaasaa
s
w.
w
w . P
. P w w . P
. P
1.Who can demand
w ww w Performance ?
w w w w
ww
Ans. :
The following are those who can demand the performance of a valid contract:
N i)e
N e tt N Neett
l a
l i
a .i. Promisee
l a
lai.i. l a
l i
a
assaa ii)Legal Representative
a adda as saa
ad
a a
d s
a aa
s
iii)Third Party
w w.P P
. Contract ? w
w. P
. P
w
www
2. Who will perform the w
www
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t himself N Neett
lalai .i. ii)Agent
i)Promisor
l a
l i
a .i. l a
l i
a
assaa iii)Representations aad da as aa
s
aaddaassaa
iv)Third Person
v)Joint Promisors w w . P
. P w
w .P.P
vi)Time and w www
place of performance of Promise w
www
3. What are the kinds of Reciprocal Promise ?
NN e ett
Ans. :
N Neett
lalai.i. Kinds of Reciprocal Promises l a
l i
a .i. l a
l i
a
et
assaa i)Mutual and Independent aaddaassaa ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w ww
ii)Mutual and Dependant
w www
ww
iii)Mutual and Concurrent www
lai
NN e ett NN e ett
l a
l i
a .i. 1.Explain the essentials of a valid ltender al i
a .i. of performance (any Five) l a
l i
a
sa
assaa Ans. : a ad da a s aa
s
aad a
d s
a aa
s
w w . P
. P w w. P
. P
w
i)It must be unconditional
w w
www
da
ii)It must be w
atw
the proper time and place
iii)It must be in proper form
Pa
NN e e
iv)It tmust
t be made to a proper person, that is to the promise
N Nee tort his authorised agent
l a
l i
a .i. v)It may be made to one of the several joint promise
l a
lai .i. l a
l i
a
assaa 2.How do you think appropriation a a dda a ss aa
of payments takes place ? aa ddaasaa
s
w.
ww . P
. P ww . P
. P
Ans. :
wwww wwww
ww
i)Appropriation of Payments
NN e et t which is insufficient to satisfy all the debts inNsuch

N e atcase
e t a debtor has a right to
sometimes the debtor owes several distinct debts to the same creditor and he makes the
l a
l i
a .i. instruct his creditor to which particular debt isltoalbeai.appropriated
payment
i. or adjusted.
l a
l i
a
assaa ii)Application of Payment where a a d d a
debta s
tos
abeadischarge is not indicated (section 60) aassaa
a ad d
If section 60 is attracted, .
ww P P
.him from the person making the payment. www.
the creditor shall have the discretion to apply such . P
payment P
for any
w w
lawful debt which w w
is due to
w w w
iii)Application of Payment where neither party appropriates (Sec 61)
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e e tPayment
t shall be applied in discharge of the debtsNinNorder e et tof time whether they are or
lalai .i. are not based by the limitation Act 1963, if theldebt
The
al i
a .arei. of equal standing (i.e. payable on the l a
l i
a
assaa same day) the payment shall beaapplied ad da as
in saa of these debt proportionately.
discharge
aa d daassaa
w w . P. P w w .P.P
www w wwww
Lesson 31 - Discharge and Breach of a Contract
NN t t the Correct Answer
I.eChoose
e NN e tt
e
lalai.i. 1)on the valid performance of the contractuallalobligation
ai .i. by the parties, the contract l a
l i
a
et
assaa (a)is Discharged (b)Becomesaaenforceable
d d aas saa
a d
a a
d s
a aa
s
. PP
.of these . P
. P
.N
w w ww
(c)Becomes void (d)none
www w
w w w
2)An agreement to do an act impossible in itself under section 56 is
w
lai
(a)Void (b) Valid (c)Voidable (d)unenforceable
NN e et tagreement which becomes impossible to perform

N Neet t various circumstances
l a
l i
a .i. (a)Voidable (b)Void (c)Valid (d)None oflthese
3)Any
al i
a .i. under
l a
l i
a
sa
assaa 4)Discharge by mutual agreement aaddaas saa
aa ddaassaa
w
w . P
. P may involve
w w . P
. P
w
wwwof the above www w
da
(a)Novation (b)Rescission
(c)Alteration (d)All
5)The compensation given for breach of contract is
Pa
NN e
(a) t t (b) Remuneration
e
Damage
N Neett
l a
l i
a .i. (c) Money (d) Cheque l a
lai .i. l a
l i
a
assaa aaddaa s aa
s
aaddaasaa
s
w.
ww . PP
. Questions w
w . P
. P
w
w w
II. Very Short
w Answer
w
w w
w
ww
1.What are the kinds of consent ?

Ans. :
N Ne etconsent
t may be of two types namely N Neett
l a
l i
a .i. The
l a
lai.i. l a
l i
a
assaa aa s aa
s
(a)Express Consent (b)Implied Consent
aad d ad
a a
d s
a aa
s
w w. PP .
. impossibility of performance? www. P
P
2.What are the w
www types of
www
Ans. :
N Neett N N ett
There are two types of impossibility of performance such as
e
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et t existing at the time of Agreement NNeet t

lalai .i. ii)Impossibility arising subsequent to the formation
i)Impossibility
l a
l ai .i.contract. l a
l i
a
assaa s saa ssaa
of
aad da a aaddaa
ww . P P
.of Damages ? w
w .P.P
3. What are the
w w w w types
w
w w
w
Ans. :
There are mainly four types of Damages such as
NNe et t Damages ii)Special Damages NNeet t

lalai.i. iii) Vindictive (or) Exemplary Damages lalai.i.
i)Ordinary
l a
l i
a
et
assaa and iv) Nominal Damages a addaas saa
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w www
www www
lai
N Ne et t are the various types of remedies forNN e et t parties ? (any 3)
l a
l i
a .i. 1.What
l al i
a .i. the injured
l a
l i
a
sa
assaa Ans. : aa dda a s saa
aa ddaassaa
w w
i)Recession of Contract . P
. P :
ww . P
. P
w wof Contract, by one Party, the other parties maywrescindww(cancelled)
da
In case w
ofw
breach w
and thereby the party is free from his all obligations under the contract.
Pa
ii)Claim for Specific Performance :

NN e e tInt some specific cases, if the damages are not adequate
N N e etremedy,
t then the court can
l a
l i
a .i. direct the party in breach for the specific performance
l a
lai .i.of the contract. l a
l i
a
assaa iii)Claim for injunctiona : dd
a aa s saa
aaddaasaa
s
w.
Injunction is anww . P P
.passed by a competent court restraining a person w w . P
. P
some act. w ww w order
w
www
from doing
ww
NN e ett N Neett
2.What are the types of cases the court may order injunction ?
l a
l i
a .i. Ans. : l a
lai.i. l a
l i
a
assaa The court may order injunctionainadthedafollowing
assaa cases ad
a a
d s
a aa
s
ww .P.
i)if the contract is voidableP w
w. P
. P
www w
ii)if the contract becomes void
w
www
or iii) on discovering the contract as void
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa IV. Long Answer Questions aaddaassaa
aaddaassaa
.
1.Explain the ways
ww P
.
ofPdischarge of Contracts.
w
w .P.P
Ans. : www w w
www
i)Discharge by Performance :
*t t tt
i NNee
.i. * Performance of contract may be of two ltypes i i N e
.namelye
Performance implies carrying out the obligation of the contract.
N. (a) actual performance (b) i
lala al a l a
l a
et
assaa Attempted performance aaddaassaa aa ddaassaa
ii)By Agreement on . P
. P
Consent : . P
. P
.N
w ww w w
w between the parties comes to an end by mutuallywwagreeingw
w for it.
ww
• Agreement
• The consent may be of two types namely
lai
(a)Express Consent (b) Implied Consent
NNeet tBy Impossibility of Performance : NNeet t

iii)
l a
l i
a .i. • A Contract may be discharged if it’slalperformance
ai .i. becomes impossible. l a
l i
a
sa
assaa a a s saa namely
• There are two types of impossibilities
a ad d aaddaassaa
w w . P P at the time of Agreement
.
.arising subsequent to the formation of contractwww.
(a)impossibility existing
P
P
www w
(b)impossibility
www
da
iv) By Lapse of Time :

• A Contract must be performed within a specified time.
Pa
N Ne ett •
N Ne e tt
If it is not performed within this specified time limit, in such cases the contract is
l a
l i
a .i. discharged
l ala i .i. l a
l i
a
assaa v) By Operating of Law :
a ad da as aa
s
aaddaasaa
s
w.
w w . PP
. c) By insolvency.
A Contract can be discharged by the operating of Law in the following cases
ww .
- P
. P
www w
a)By Death b) By Merger
www w
ww
2.What is meant by damages and what are its types ?

Ans. :
NN e e t t are monetary compensation awarded by the N courte

N e tthet injured party for the loss or
l a
l i
a .i. injury suffered by him.
Damages
l alai.i. to
l a
l i
a
assaa As per contract, one party can aclaim d
a da as saaif other party breach the contract.
damages,
a ad d aasaa
s
w w .P
The main purpose of awarding P
. damages is to make good the loss sufferedw . PP
by him. It.is known
ww
ww w w
as ‘Doctrine of Restitution.’
ww w
There are mainly four type of Damages, such as
N Neet t
i)Ordinary Damages
ii)Special Damages
N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe tVindictive
iii)e t (or) Exemplary Damages N Neett
lalai .i. and iv) Nominal Damages l a
l i
a .i. l a
l i
a
assaa aaddaassaa
aaddaassaa
ww. P
. P w
w .P.P
w w w
w w
w w
w
Lesson 32 - Direct and Indirect Taxes
N Ne e t t the Correct Answer N N e ett

lalai.i. I. Choose
l a
l a i .i. l a
l i
a
et
assaa 1.(a)Income Tax is
a a d a
d a s saa
ad
a a
d s
a aa
s
. P
. P
a business tax (b) a direct tax (c) an indirect tax (d) None of these
. P
. P
.N
w w w www
www www
2. Period of Assessment Year is
lai
(b) 1st March to 28th Feb
N Ne et tJuly to 30 June
(a) 1st April to 31st March
N Neett
l a
l i
a .i. (c) 1 st th
(d)st
1 Jan to
l
st
31
a
l i
a .i.
Dec
l a
l i
a
sa
assaa 3.(a)The year in which income is earneds
a ad d a a a
iss a as
known
aaddaassaa
Assessment Year
w w . P P
. Calendar Year
(b) Previous Year
w
w . P
. P
(c) Light Year w w w
w
da
w w (d)
4. The aggregate income under five heads is termed as
w
w
Pa
(a) Gross Total Income (b) Total Income
NN e ett N Neett
l a
l i
a .i. 5. Agricultural Income earned in India is lalai.i.
(c) Salary Income (d) Business Income
l a
l i
a
assaa (a) Fully Taxable a d
(b)a da a s saa
aaddaasaa
s
w.
w w . P
. P Fully Exempted
w
w . P
. P
wwww
(c) Not considered for Income (d) None of the above w
www
ww

N Ne t t is Income Tax ?
e N N e e tt
l a
l i
a .i. 1. What
l a
la i.i. l a
l i
a
ad
a a
d s
a aa
s
➢ Income tax isw w P. P
➢ It is levied on the .income or profit from business of individuals and
w . P
. P
institutions.
w
ww w w the basic source of revenue for the government.
w w w w
2.What is meant by previous year ?
Ans. :
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNeet
➢ tThe year of earning income, is called Previous year.
N Ne tt
e
lalai .i. ➢ It normally consists of a period of 12 months,
l a
l i
a .icommencing
. st
l a
l i
a
assaa aayear. aa
on 1 April every year and
st
a as s
ending on 31 March of the following
d d d daass
3.What is an Assessment. P
. P aa
Year ? . P
. P aa
w w w w w w
Ans. : www www
➢ The Year in which the assessment of Income is done is called Assessment Year
➢ It normally consists of a period of 12 months, commencing on 1st April every year and
N Neett N Neett
ending on 31st March of the following year.
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa III. Short Answer Questions aad das
a saa
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w ww
wheads of Income. www
1.List out wwfive
the www
l a
l i
a N
.i. Neett
lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa aaddaasaa
s
aaddaassaa
ww. P
. P w
w . P
. P
w
www w
www
da
Pa
N Neett N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa ad
adaassaa
aaddaasaa
s
w.
ww. P
. P w
w . P
. P
w
www w
www
ww
N Ne et t (a) Direct Tax (b) Indirect Tax NNeet t

2.Write Short Notes on
l a
l i
a .i. l a
la i.i. l a
l i
a
assaa Ans. :
a adda as saa
ad
a d aasaa
s
(a)Direct Tax
w w . P P
.the income or wealth of a person and is paid bywthatww. PP
. (or is
➢ If a tax w w
ww
office)
levied on
directly to the Government, it is called Direct Tax www person
➢ e.g. Income Tax, Wealth Tax, Capital Gains Tax,
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN e et tSecurities Transaction Tax, etc. N Ne ett

lalai .i. (b)Indirect Tax l a
l ai .i. l a
l i
a
assaa If tax is levied on the goodsa a dd a as s aa
aa d daassaa
w w .
and is paid by seller to the P
. P or services
Government. It is called Indirect Tax. E.g. GST.
w w P P
of a person (seller). It is collected from the buyers
. .
3.Who are all ww ww
included in the term person ? www w
Ans. :
N Nett
e N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa aaddas
a aa
s
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w
w www
www www
l a
l i
a N
.i. Neett
lai l a
l i
a N
.i. Neett
l a
l i
a
sa
assaa aaddaasaa
s
aaddaassaa
ww. P
. P w
w . P
. P
w
www w
www
da
Pa
NN e ett
N Neett
l a
l i
a .i. 1.Elucidate any five features of IncomelalTax.ai .i. l a
l i
a
assaa Ans. : a ad da ass aa
aaddaasaa
s
w.
w
i)Levied by Central
w. P
. P
Government w w. P
. P
Income
w
wwTaxwis charged by the Central Government on all Incomesww than
wwother
ww
Agricultural Income
NN e et tIncome Tax is Direct Tax

ii)Direct Tax
N N e ett
l a
l i
a .i. ➢ The person earning Income is liable to lpayalai.i.
➢
l a
l i
a
assaa d da
➢ income tax out of his own pocket
a a a s saacannot
and
ad
a a
d s
a aa
s
. P P
➢ pass on to another person
w w . w
w. P
. P
iii)Annual Tax w w ww
ww w w
Income tax is annual tax because it is the income of a particular year
iv)Tax on Income
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NNe et t➢ It is a tax on income NNe tt

e
lalai .i. ➢ Income includes Salary Income, House l a
l ai .i. Income, Business or Profession l a
l i
a
assaa asources
a Income. aa
Property
dda a ss
Income, Capital Gain and other
d a
d s
a s
v)Applicability
. PP a a
. throughout India including the state of Jammu . P P a a
.Kashmir
w ww w w w
www
Income Tax is Applicable
www and
N Neett
Lesson 33 - Indirect Taxation
N Neett
lalai.i. l a
l i
a .i. l a
l i
a
et
assaa I.CHOOSE THE CORRECTaANSWER d
a a
dassaa
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
w w w
w of the GST council ? www
wwchairman
1.Who is the www
lai
(a) RBI Governor (b) Finance Minister
NN e t t
(c) Prime Minister
e (d) President of India
N Neett
l a
l i
a .i. 2.GST stands for l a
l i
a .i. l a
l i
a
sa
assaa (a)Goods and Supply Tax a(b)adGovernment daa s saaSales Tax
aaddaassaa
ww . P
.
(c) Goods and Services Tax P (d) General Sales Tax
w
w . P
. P
w
wwofwTax the GST is ? w
www
da
3. What kind
(a)Direct Tax (b) Indirect Tax
Pa
NN e e tt N Neett
(c) Dependence on the type of goods and services (d) All Business Organisations
l a
l i
a .i. 4. What is IGST ? l a
la i .i. l a
l i
a
assaa (a)Integrated Goods and Service aa dda
Tax a ssaaIndian Goods and Service Tax
(b)
aaddaasaa
s
w.
w w . P
.
(c) Initial Goods and ServicePTax (d) All of the above
w
w . P
. P
5. In Indiaw
w
wwbecame effective from ?
GST www w
ww
(a)1st April, 2017 (b)1st January 2017
NN e et t
(c)1st July, 2017 st
(d)1 March 2017
N N e tt
e
l a
l i
a .i. II. Very Short Answer Questions lalai.i. l a
l i
a
assaa 1.What do you mean by Indirect aa dd a
Taxa s
?
aa
s
ad
a a
d s
a aa
s
Ans. :
w
w .P. P w
w. P
. P
w
wwwTax is levied on the goods and services
➢ Indirect
w
www
➢ It is collected from buyers by the sellers and paid by the sellers to the Government
➢ Since it is indirectly imposed on the buyer, it is called Indirect Tax. E.g. GST
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
NN2.eet t any two indirect taxes levied in India NNeet t

lalai .i. Ans. :
Write
l a
l i
a .i. l a
l i
a
assaa a a d daa s saa
aaddaassaa
ww . P
. P
The two indirect taxes levied in India are
w
w .P.P
www w
➢ GST - Goods
➢ Excise Duty
and Services Tax
w
www
3.What do you mean by Goods and Services Taxes ?
NNe ett
Ans. :
NNeett
lalai.i. ➢ GST is the tax imposed on the supplylalofaigoods.i. and services. l a
l i
a
et
assaa a a d
items at each stage of the
ssaa tax, and collected on those value added aassaa
➢ It is the destination based consumption
d a a
supply chain.
aadd
. P
.P . P
. P
.N
4. What is CGST ?w w w w
Ans. : www w www w
lai
CGST – Central Goods and Services Tax, imposed and collected by the central government
N N ett N N ett
on all supply of goods within a state (intrastate) under CGST Act 2017.
e e
l a
l i
a .i. l a
l i
a .i. l a
l i
a
sa
assaa III. Short Answer Questions
1.What are the objectivesP aad da as saa
aaddaassaa
ww . . P
of GST ? (any 3)
w
w . P
. P
www w w
www
da
Ans. :
➢ To create a common market with uniform tax rate in India (One Nation, One Tax,
One Market)
Pa
N Neett N Neett
➢ To simplify tax return procedures through common forms and avoidance of visiting
l a
l i
a .i. tax departments
l a
lai .i. l a
l i
a
assaa aa aa
➢ To increase the tax base by bringing more number of tax payers and increase tax
revenue
ddaass ddaass
aa aa
w.
w
w . P
. P w
w . P
. P
2. Write anyw w
wwdemerits of GST
three w
www
ww
Ans. :
NNeett N N e tt
➢ GST in India would impact negatively on the real estate market
e
l a
l i
a .i. ➢ The Aviation Industry would be affectedlalsince
ai.i.service tax on airfare is 15%
➢ After GST garments and clothes could become more expensive
l a
l i
a
assaa IV. Long Answer Questions aa d da a ssaa
ad
a a
d s
a aa
s
w w .P P
.Direct Taxes and Indirect Taxes (anyw5)ww. . P
P
wwww
1)Distinguish between
www
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa
ww.. w
w ..
wwww wwww
N Neett N Neett
lalai .i. l a
l i
a .i. l a
l i
a
assaa aaddaassaa
aaddaassaa
ww. P
. P w
w .P.P
w
www w
www
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
et
assaa 2)Discuss the different kindsaofadGST
d aa s aa
s
ad
a a
d s
a aa
s
. P
.P . P
. P
.N
Ans. :
w w w w w w w
ww
➢ CGST wwbywthe central
– Central Goods and Services Tax, imposed and collected
government on all supply of goods within a state (intrastate) under CGST Act 2017.
lai
➢ SGST – State Goods and Services Tax, imposed and collected by the State
N Neett N Neett
Government under State CGST Act under Tamil Nadu Government
l a
l i
a .i. ➢
l l i
a .i. l a
l i
UGST – Union Territory Goods and Services Tax, imposed and collected by Union
a a
sa
assaa aa aa
territory Administrations.
➢
d aass d aass
IGST – Inter-state Goods and Services Tax, imposed and collected by the central
d d
. P
. Paa . P
. Paa
government and the revenue shared with states under IGST Act 2017.
➢ ww w
w
IGST on Exports – All Exports are treated as Inter-state supply under GST. Since
w w
www www
da
exports are zero rated, GST is not imposed on all goods and services exported from
India.
Pa
N Neett N Neett
l a
l i
a .i. l a
lai .i. l a
l i
a
assaa “Victory a
adda as aa
s
a add aasaa
s
w.
w w . P
. P Comes From the Lord.” Proverbs 21:31
w w . P
. P
w
www www w
Prema Samuel, PGT
ww
MCC Matric. Hr. Sec. School
N Neett N Neett
l a
l i
a .i. l a
lai.i. l a
l i
a
assaa aaddaasaa
s
ad
a a
d s
a aa
s
w
w .P. P w
w. P
. P
w
www w
www
N Neett N Neett
lalai.i. l a
l ai .i. l a
l i
a
assaa dda a s saa
d aassaa
PP a a
PP d
aa

11th Commerce Study Materials English Medium PDF Download

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

11th Commerce Study Materials English Medium PDF Download

Uploaded by

Copyright:

Available Formats

ww..

N Ne ett MCC Matric. Hr. Sec. School, e

lalai.i. 2. Hindrance of place is removed by _____________

II. VERY w SHORT

*Day market was called as Nallangadi.

NN e et t early Tamils produced their products and goodsNNinetheir

NN ee t t N N e et tfor the purpose of selling or

IV. LONG ANSWER

NN e et tand other financial institutions provide funds toNproducers

NN e et t 2 - Objective of Business NNeet t

II. VERY SHORT ANSWER QUESTIONS

NN1.e e t t Economic Activities. NN e e tt

It is an economic activity undertaken to earn profit through production,

3. Explain the classification of a business.

lalai.i. into two categories, namely l a

N Ne e t t in Goods and Services:

➢ The Business transactions must be regular.

2. Compare business with profession and employment

iv. Human Objectives:

of expectation of employees, social and psychological

NNeett human resources.

N Neett resources into useful goods.

III. Short Answer Questions

NN1.ee t t is the oldest form of Business organisation?NNeet t

NN e et tii)Public Utilities N Neett

NNeet tThe liability of the sole trader is unlimited NNeet t

lalai.i. ➢ When business assets are not sufficientltoalapayi.ibusiness

N Neett ➢ Medical Stores

Work and Quick Decision

(iv)Personal Contacts with

(c) Dayabagha Law (d) None of these

8.The Partnership Deed also called _____

N Neett (c) Partnership Act (d) Partnership

N Neett 2. What are the two schools of Hindu Law ?

N NeetAns.t : Following are three features of HUF NNeet t

controlled and managed under Hindu Law

* Karta is the senior most male member of the family

N Ne et t the types of Dissolution of Partnership Firm.

N Neett the partnership is automatically dissolved.

N Neett c) Misconduct of any partner

NNeet td) Transfer of Interest to Third Person NNeet t

NNe ett N Neett

a. Chartered company b. Foreign company c. Government company d. Statutory company

4. The Board of directors of a company is elected by _______

(V) On the basis of Nationality

and a common seal” - Section 2 of the Companies Act, 2013

4. Write any twow

➢ The Liability of a share holder is limited

a company which is a subsidiary company of such a government company.”

NN3.eet t is meant by Foreign Company ? N Neett

IV. Long Answers

iv)Seal of the Company

2. Co-operative fails because of _________

NN e et t do you mean by cooperative organization?NNeet t

NNeet t Co-operation is better forming, better business

NN e ett credit co-operatives.

➢ It was started by Robert in the year 1884

2. Write a note on Housing cooperatives.

N Neet tAns. : NNe ett

implies the affairs

➢ Co-operatives are autonomous self help organisations

N Neet t(v)Education, Training and Information

N Neett NN e e t t by working together through

N Neett (A)Consumer Co-operatives