BUSINESS STUDIES (April’ 2013)
OLD COURSE (215)
NIOS SECONDARY Solved Papers
Time: 3 Hours
Maximum Marks: 100
11. Explain any three characteristics
of sole proprietorship. 3
Ans.:-
Sole proprietorship has the following characteristics
a) Ease of formation:- An ideal form of ownership should be easy to form. Ease of formation implies minimum of legal and other formalities. Sole proprietorship is easy to form.
b) Single Ownership:- A single individual always owns sole proprietorship form of business organization. That individual owns all assets and properties of the business. Hence, he alone bears all the risk of the business.
c) No sharing of Profits and Loss:- The entire profit arising out of sole proprietorship business goes to the sole proprietor. If there is any loss it is also to be borne by the sole proprietor alone. Nobody else shares the profit and loss of the business with the sole proprietor.
12. Explain the meaning of Bonded warehouse. 3
Ans.:-
Bonded warehouse:- These
warehouses are owned, managed and controlled by government as well as private
agencies. Private bonded warehouses have to obtain license from the government.
Bonded warehouses are used to store imported goods for which import duty is yet
to be paid.
13. Who is a partner by holding out? 3
Ans.:- A partner by holding out means a person who is not a member
of firm but allows himself/herself to be represented as a partner. Such person
is responsible to person who has given loan to firm on his representation
because loan has been given by assuming that he/she is member.
14. A
factory owner gets has stock of goods insured, but he hides the fact that the
electricity board has issued him a statutory warning letter to get his
factory’s wiring changed later on, the factory catches fire due to short
circuit. Can he claim compensation? Give the name of the principle involved in
supports of your answer also explain this principle. 3
Ans.:- The factory owner cannot claim for compensation because it
is a contract of indemnity. The claim for loss by fire is payable subject to
two conditions viz.; (a) there must have been actual fire, and (b) fire must
have been accidental, not intentional,
The basic principle applied with regard to claim is the principle
of indemnity. The insured is entitled to be compensated for the amount of
actual loss suffered subject to a maximum amount for which he had taken the
policy. He cannot make profit through insurance.
15. What is meant by ‘Fidelity
Insurance’? 3
Ans.:- Fidelity
Insurance:- As a protection against the risks of loss on account of
embezzlement or defalcation of cash or misappropriation of goods by employees,
businessmen may get policies issued covering the risks of loss on account of
fraud and dishonesty on the part of employees handling cash or in charge of
stores. This is called fidelity insurance policy. The employees may also be
required to sign a fidelity guarantee Bond.
16. Describe any three objectives of
advertising. 3
Ans.:-
Objectives of advertising:-
(a) To educate customers:- Can
you remember the advertisement of Tata Namak on television? In this
advertisement it is said that Tata Namak is good for health as it contains
Iodine. This message educates you that iodine is good for health and Tata Namak
contains iodine.
(b) To create demand for new product:-
You read in newspaper that a new type of pen called ‘Gel Pen’ is introduced in
the market, which is very economical and convenient in writing. This motivates
you to buy the said pen. This will create a demand for the new product launched
in the market.
(c) To retain existing customers:-
you might remember that Nirma washing powder was a very popular detergent. But,
after wheel powder came to the market the sale of Nirma suddenly decreased.
Then the manufacturers of Nirma improved the product and advertised about the
same in different media. After knowing this the persons who were earlier using
Nirma did not switch over the Wheel and continued using Nirma.
17. What is meant by ‘Wise
buying’? 3
Ans.:-
A wise buyer does not regret his buying decision. Wise buying refers to buying
the right type of products or services at eh right time, at the right place and
at eh right price. It is a process of making a buying decision on the right
manner, so that you do not regret in future.
18. What is a stale cheque? 3
Ans.:- Check presented at the paying bank after a certain period
(typically six months) of its payment date. A stale check is not an invalid
check, but it may be deemed an ‘irregular’ bill of exchange. A bank may refuse
to honor it unless its drawer reconfirms it payment either by inserting a new
payment date or by issuing a new check. Also called stale dated check.
19. Give any three features of an
entrepreneur. 3
Ans.:- Some of the
major features of an entrepreneur are:-
i)
Identifying entrepreneurial
opportunity:- There are many
opportunities in the world of business. These are based on human needs like
food, fashion, education, etc. which are constantly changing. These
opportunities are not realized by common man, but an entrepreneur senses the
opportunities faster than others do.
ii)
Turning ideas into action:- An entrepreneur should be capable of turning his
ideas into reality. He collects information regarding the ideas, products,
practices to suit the demand in the market. Further steps are taken to achieve
the goals in the light of the information collected.
iii)
Feasibility study:- The entrepreneur conducts studies to assess the
market feasibility of the proposed product or services of inputs required to
run the enterprise. Such a blue print of all the activities is termed as a
‘business plan’ or a ‘project report’.
20. State any three qualities required
for success in self employment. 3
Ans.:-
Qualities required for success in self employment are:-
a) Mental abilities:- To
be self-employed you need to have the ability to identify the most suitable
area where there is opportunity of self-employment.
b) Alertness and foresight:-
A self employed person should be aware and alert about changes taking place in
the market so as to adjust his operations.
c) Self-confidence:- In
self-employment, the owner has to take all decisions, he must also have
confidence in himself to overcome problems and also while dealing with
suppliers/creditors, and government officials.
21. Distinguish between Private
Limited Company and Public Limited Company by giving any five points. 5
Ans.:-
Difference between private limited and public limited companies:-
1)
In the case of a private company
minimum number of persons required to form a company is two, while it is seven
in the case of a public company.
2)
A private company has to have a
minimum paid up capital of Rs. 1 lack, whereas a public company has to have a
minimum paid up capital of Rs. 5 lacks.
3)
In case of a private company the
maximum number of members must not exceed fifty whereas there is no such
restriction on the maximum number of members in case of a public company.
4)
In private company the right to
transfer shares is restricted, whereas in case of public company the shares are
freely transferable.
5)
A private company cannot issue a
prospectus, while a public company may invite the general public to subscribe
for its Shares or Debentures.
22. State any three advantages and two
limitations of water transport. 5
Ans.:-
Advantages of water transport:
(i)
It is relatively economical mode of
transport for bulky and heavy goods.
(ii)
It is a safe mode of transport with
respect to occurrence of accidents.
(iii)
The cost of maintaining and constructing
routes is very low as most of them are naturally made.
Limitations
of water transport:
(i)
The depth and navigability of rivers
and canals vary and thus affect operations of transport vessels of different
sizes.
(ii)
It is a slow moving mode of transport
and therefore not suitable for transport of perishable goods.
23. Give any five secondary functions
of a commercial bank. 5
Ans.:-
The following are the secondary functions of a commercial bank
1. Issuing letters of credit,
travellers’ cheque, etc.
2. Undertaking safe custody of
valuables, important document and securities by providing safe deposit vaults
or lockers.
3. Providing customers with facilities
of foreign exchange dealings.
4. Transferring money from one account
to another and from one branch to another branch of the bank through cheque,
pay order, demand draft.
5. Standing guarantee on behalf of its
customers, for making payment for purchase of goods, machinery vehicles etc.
24. The Manager of Vani Enterprises
dealing in cosmetics is facing the problem of poor sales. Suggest and explain
any five promotional measures that she can undertake to improve the sales.
Ans.:-
The manager can use the following promotional measures that she can undertake
ot improve the sales:-
(i) Free samples:- We
might have received free samples of shampoo, washing powder, coffee powder,
etc. while purchasing various items from the market. Sometimes these free
samples are also distributed by the shopkeeper even without purchasing any item
from his shop. These are distributed to attract consumers to try out a new
product and thereby create new customers.
(ii) Premium or Bonus offer:-
A milk shaker along with Nescafe, mug with Bournvita, toothbrush with 500 grams
of toothpaste, 30% extra in a pack of one kg. Are the examples of premium or
bonus given free with the purchase of a product. They are effective in inducing
consumers to buy a particular product.
(iii) Exchange schemes:-
It refers to offering exchange of old product for a new product at a price less
than the original price of the product. This is useful for drawing attention to
product improvement. For example ‘Bring your old mixer-cum-juicer and exchange
it for a new one just by paying Rs.500 etc.
(iv) Price-off offer:- Under
this offer, products are sold at a price lower thatn the original price. For
example Rs.2 off on purchase of a lifebuoy soap, Rs. 15 off on a pack of 250
grams of Taj Mhal tea etc.
(v) Coupons:-
Sometimes, coupons are issued by manufacturers either in the packet of a
product or through an advertisement printed in the newspaper or magazine or
through mail. For example 20% off on purchase of 5 kg. Of Annapurna Atta.’ The
reduced price under this scheme attracts the attention of the prospective
customers towards new or improved products.
25. Write any five differences between
self employment and wage employment. 5
Ans.:-
Differences between self employment and wage employment:-
|
Basis |
Self
employment |
Wage
employment |
|
Nature |
Engage
in activities on one’s own. |
Engage
in activities assigned by the employer. |
|
Status
or position |
The
position of the person is that of owner and may be that of an employer. |
The
position of the person is that of an employee. |
|
Income
or earning |
Income
or earning is not fixed. It depends on the ability of the owner. |
Income
of the employed person is fixed and may be increased, if the employee so
decides. |
|
Risk
bearing |
There
is always risk of loss sometime and earnings may decline at times. |
There
is no risk of reduced income so long as the employee continues to work. |
|
Freedom
of work |
The
owner is free to decide how to run the business depending on the available
opportunities. |
The
employee has to work according to the terms and condition of employment. |
26. Why is consumer protection
required in India? Explain in detail. 5
Ans.:- The necessity of adopting measures to protect the interest
of consumers arises in India mainly due to their helpless position and the
unfair business practices. No doubt consumers have the basic right to be
protected from the loss or injury caused on account of defective goods and deficiency
of services. However, consumers are unable to make use of their rights due to
lack of awareness and ignorance. For example, as consumers we have the right to
choose the goods of right quality from a variety of similar goods available in
the market. But often we fail to make the right choice because of misleading
advertisements by which we are carried away and buy sub-standard goods.
Under certain circumstances, we are helpless in the sense of our
inability to verify the quality of products. The clever shopkeeper can deceive
us by his persuasive words.
27. What is Business correspondence?
Explain the importance of Business correspondence.7
Ans.:-
Business correspondence means the exchange of information in a written format
for the process of business activities. Business correspondence can take place
between organizations, within organizations or between the customers and the
organization.
The
following are the importance of Business correspondence:-
1) Maintaining a Proper Relationship:- It
is not always possible for any business or organization to reach to any person
in particular. This will cost any business. Here, the business correspondence
will be a rescue for any business.
2) Serves as Evidence:-
Any written form of communication serves as evidence. A business correspondence
helps the person in a business to keep a record of all the facts. These written
records will serve as evidence.
3) Create and Maintain Goodwill:-
It helps in creating and maintaining goodwill between a business and a
customer. Any letter to enquire, complaint, suggestion or feedbacks helps a
company to grow and maintain goodwill.
4) Inexpensive and Convenient:-
It is a cheap and convenient form of business communication.
5) Formal Communication:-
A business communication serves as a formal communication between two persons.
It may be a seller and a buyer. It can be between an employee and the employer.
The language used is formal and logical.
28. What is Departmental Store?
Explain any five advantages of Departmental store? 7
Ans.:-
A Departmental Store is a large-scale retail shop where a large variety of
goods are sold in a single building. The entire building is divided into a
number of departments or counters. In each department specific type of goods
like stationery items, books, electronic goods, garments, jewellery etc. are
available.
The
following are the advantages of Departmental Store:-
(i)
Convenience
of shopping:- Since a large variety of goods are sold under
one roof, we need not move from one bazaar to another or from one shop to
another to buy goods.
(ii)
Wide
choice of products:- A wide variety of products from
different manufactures are sold in these stores. Thus, a customer has a wide
choice of goods from which he/she can select the best product as needed.
(iii)
Economies
of large-scale purchase and sale:-
Departmental stores buys goods on large scale. So it can bypass wholesalers and
gets the goods directly from the manufacturers. This way it enjoys the benefits
of discounts from the manufacturers.
(iv)
Mutual
advertisement:- While visiting departmental store customers
are often attracted by goods displayed in different departments. Hence, there
is a chance that the customers may buy goods other than those they originally
had in mind. Thus, each department advertises for other departments.
(v)
Efficient
management:- Since these stores are organised on a large
scale basis, they normally employ efficient and competent staff to provide best
services to the customers.
29. Describe the role of NGOs in
protecting the interest of consumers. 7
Ans.:-
The role of NGOs has become increasingly more significant over the last two
decades. There are now more than 800 such organisations in India. These
organisations are registered under the Societies Registration Act or the
Companies Act or as Charitable Trusts.
NGOs
have undertaken various activities as part of the consumer movement. They
perform several functions, like:-
(a)
Create awareness about consumer rights
and educate the general public about consumer problems and remedies through
seminars, workshops and training programmes.
(b)
Provide legal aid to consumers by way,
of assistance in seeking legal remedy.
(c)
Undertake advocacy of consumers’ point
of view as representative members of consumer protection councils and others
official boards.
(d)
Publish periodicals and journals to
disseminate information among readers about consumer problems, legal reporting
and other emerging matters of interest. Most of these periodicals do not accept
advertisements from business firms.
(e)
Make suggestions and recommend steps
which government authorities should consider in policy making and
administrative measures adopted in the interest of consumers.
30. “The businessmen are responsible
for aggravating problem of pollution.” In the light of this statement explain
the role of businessmen in checking pollution. 7
Ans.:-
“The businessmen are responsible for aggravating problem of pollution.” In the
light of this statement the role of businessmen in checking pollution are:-
(a)
Emission of gas and smoke from
manufacturing plants.
(b)
Use of machines, vehicles etc.
contributing to noise pollution,
(c)
Deforestation due to acquisition of
forest lands for setting up plants.
(d)
Growth of urbanisation and
industrialization.
(e)
Disposal of wastes and effluents into
rivers and canals.
(f)
Disposal of solid wastes in the open
space.
(g)
Mining and quarrying activities.
(h)
Increasing use of transport.
***
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