BUSINESS STUDIES

PRACTICE EXAM PAPER – HALF YEARLY

40 MARKS

Chapters included:
 Business, Trade and Commerce
 Forms of Business Organization
 Public, Private and Global Enterprises

SECTION A – 3 MARKERS

1. A textile factory is to be started in the nearby area where Gopal, an entrepreneur, is carrying on his
business. As a businessperson, he thinks that once the textile factory is set up, he will get more
customers; the sales will increase and he will earn more profit. However, for all these, he will have
to expand his business and for this, he needs more money.

The major problem is how to arrange the additional funds. He has the option of getting loans from
the banks. However, the fear of loss comes to his mind repeatedly. He does not want to take that
risk. Another option is that he may join hands with some other person. By doing so, more
resources can be raised, work can be shared and business can be run in a better way. The risk and
loss will also be shared. Therefore, he finally decided to join hands with some other persons.

On the basis of this case, evaluate the answer of the following questions:
i. Give the definition of the above-mentioned form of business organization.
ii. Explain any two merits Gopal will enjoy after joining hands with other persons.

2. Although earning profit cannot be the only objective of business, its importance cannot be
ignored. Do you agree with the statement? Justify.

3. According to Partnership Act 1932, it is not compulsory for a partnership firm to get itself
registered. Then why do partners prefer to get the firm registered?

4. List any three hindrances of trade – how does commerce help in overcoming these hindrances?

SECTION B – 4 MARKERS
1. Mr. Gupta was working under the production unit of a large-scale company producing wide
variety of toiletries for last five years. Though the company earns huge profits but no increment
or bonus is given to the workers. To the employees the company doesn't give any concession or
discount if they want to purchase the products manufactured in the company directly from the
sales department. Mr Gupta with his ten other colleagues decided to resign from his job. They
decided to open their own business organisation where economic interest of all its members will
be promoted, values of mutual help and welfare will be emphasized, the goods and services will
be made available directly from producers to consumers at very reasonable price by eliminating
the role of middlemen.

Answer the following questions with reference to the given paragraph:

a) Name the form of organisation, which Mr Gupta has decided to opt for his business.
b) Discuss any three limitations that may be encountered by such an organisation.
2. They have their Head Office in one country, but they carry on their business operation in
other countries known as host countries. For example. Pepsi and Coca Cola companies are
registered in USA, whereas they operate across the world.

Answer the following questions:

i) Identify the type of business organization highlighted above.
ii) How do they extend their industrial and marketing operations in several countries?
iii) Explain any two features of such enterprises.

3. Kapil Sharma wants to start a business of fashionable items. But he is hesitating to go ahead
with his plans because of the various kinds of risks which are inherent in every business. He
consults his friend Sunil in this regard for guidance about ways to overcome such situations
effectively in his business.

With reference to the given paragraph:

a) Describe the various types of business risks.
b) Explain any two causes of business risks.

4. “These industries process materials already obtained at the primary stage.” Which industry
does this statement refer to? Explain it in detail with suitable examples and subdivisions.

SECTION C – 6 MARKERS

1. For a business that requires large amount of capital and large scale operations, Joint Stock
Company is preferred. Do you agree? Give three reasons supporting your answer, and also
explain any three important features of Joint Stock Company.

2. After completing her class 12 Neeru joined a Fashion and Textile Designing Institute. On
completion of this course, she tried for a job in the Film industry but could not get the same.
She therefore decided to start her own 'Fashion House cum Boutique' in her own city. Over
the years, her business has grown from operating a small shop to a retail chain with three
branches in the city. She also plans to open branches countrywide.

Answer the following questions with reference to the paragraph:

a. Identify the form of business organization she has adopted.
b. Explain two benefits and two demerits of such form of business organization.
c. What role will her decision to go nationwide play in her choice of form of organization?