CLASS -XI

BUSINESS STUDIES (054)

Sample Paper (2024-25)

Maximum Marks: 80

Marking Scheme/Hints to solutions

[Note: Any other relevant answer, not given here under but given by the candidates, be
suitably awarded.]

[Link] Value points/ Key points Marks Total

allotted to marks
each key
point
1. d) Both A & R are true and R is the correct explanation of A. 1 (1)
2. b) Sahyog –Hundi 1 (1)
3. a) Companies Act, 2013, 50 1 (1)
4. c) Large amount of funds can be generated through trade credit 1 (1)
5. c) Insurance 1 (1)
6. c) A – iii, B – i, C – iv, D – ii 1 (1)
7. d) working capital requirements 1 (1)
8. d) Bootstrapping 1 (1)
9. c) Producers cooperative societies 1 (1)
10. a) Debenture 1 (1)
11. b) B2C Commerce 1 (1)
12. d) Share 1 (1)
13. a) Internal trade 1 (1)
14. d) Bottles 1 (1)
15. a) 1, 2, 3 are correct but 4 is incorrect. 1 (1)
16. b) Grant of credit 1 (1)
17. c) Furniture 1 (1)
18. a) Both the statements are true 1 (1)
19. b) Portfolio Investment 1 (1)
20. a) IGST 1 (1)
21. a. Departmental Undertaking 1 mark for (3)
b. Features:- identification
+ 1 mark for
The funding of these enterprises come directly from the each feature
Government Treasury and are an annual appropriation from
the budget of the Government. The revenue earned by these
is also paid into the treasury;
(ii) They are subject to accounting and audit controls applicable to
 other Government activities;
(iii) The employees of the enterprise are Government servants and
their recruitment and conditions of service are the same as
that of other employees directly under the Government. They
are headed by Indian Administrative Service (IAS) officers
and civil servants who are transferable from one ministry to
another;
(iv) It is generally considered to be a major subdivision of the
Government department and is subject to direct control of the
ministry;
(v) They are accountable to the ministry since their management
is directly under the concerned ministry. ( Any Two)
OR
a. Government Company
b. Features:-
(i) It is an organisation created under the Companies Act, 2013 or
any other previous Company Law.
(ii) The company can file a suit in a court of law against any third
party and be sued;
(iii) The company can enter into a contract and can acquire 1 mark for
property in its own name; identification
(iv) The management of the company is regulated by the + 1 mark for
provisions of the Companies Act, like any other public limited each benefit
company;
(v) The employees of the company are appointed according to
their own rules and regulations as contained in the Memorandum
and Articles of Association of the company. The Memorandum
and Articles of Association are the main documents of the
company, containing the objects of the company and its rules and
regulations; ( any other suitable point )
22. a) (3)
Basis Life Insurance Fire Insurance Marine
Insurance

Subject The subject The subject The subject 1 mark for

Matter matter of matter is any matter is a each
insurance is physical ship, cargo or difference
human life. property or freight.
assets

Elem Life Insurance Fire insurance Marine

ent has the elements has only the insurance
of protection and element of has only the
investment or protection and element of
both. not the protection
element of
 investment.

Insurable Insurable Insurable Insurable

interest interest must interest on interest must
be present at the subject be present at
the time of matter must the time
affecting the be present when claim
policy but both at the falls due or
need not be time of at the time of
necessary at effecting loss only.
the time when policy as well
the claim falls as when the
due. claim falls
due

(ANY OTHER RELEVANT DIFFERENCE)

OR
i) Cellular mobile services: These are all types of mobile telecom
services including voice and non-voice messages, data services
and PCO services utilizing any type of network equipment within
their service area. They can also provide direct inter connectivity
with any other type of telecom service provider. ½ mark
fo
(ii) Fixed line services: These are all types of fixed services reach
including voice and non-voice messages and data services to heading + ½
establish linkages for long distance traffic. These utilize any type mark
of network equipment primarily connected through fiber optic fo
cables laid across the length and breadth of the country. The also rexplanation
provide inter connectivity with other types of telecom services.

(iii) Cable services: These are linkages and switched services

within a licensed area of operation to operate media services,
which are essentially one-way entertainment related services. The
two-way communication including voice, data and information
services through cable network would emerge significantly in the
future. Offering services through the cable network would be
similar to providing fixed services ; ( any other suitable point )

23. a) Partner by holding out: A partner by ‘holding out’ is a person 1 mark for (3)
who though is not a partner in a firm but knowingly allows him/her identification
to be represented as a partner in a firm. Such a person becomes + 1mark
liable to outside creditors for repayment of any debts which have each for
been extended to the firm on the basis of such representation. explanation
 b) In case he is not really a partner and wants to save himself from
such a liability, he should immediately issue a denial, clarifying his
position that he is not a partner in the firm. If he does not do so, he
will be responsible to the third party for any such debts.
24. Retained earnings as a source of funds has the following merits (3)
(i) Retained earnings is a permanent source of funds available to
an organisation. 1 mark for
(ii) It does not involve any explicit cost in the form of interest, each
dividend or floatation cost. explanation

Retained earnings as a source of funds has the following

limitations:
(i) Excessive Ploughing back may cause dissatisfaction amongst
the shareholders as they would get lower dividends.
( any other suitable point )
25. ½ mark for (4)
a) Varun – Business, Tarun- Profession each
identification
b) The difference between business and profession is as follow:
Basis Business Profession
Mode of Entrepreneur’s Membership of a
establishment decision and other Professional body
legal formalities, if and certificate of
necessary practice
1 mark for
Nature of work Provision of goods Rendering of each
and services to the personalized, difference
public expert services

Return Profit earned Professional fee

(ANY OTHER RELEVANT DIFFERENCE)

26. Mail order houses are the retail outlets that sell their merchandise 1 mark for (4)
through mail. There is generally no direct personal contact meaning + 1
between the buyers and the sellers in this type of trading. mark for
each
Advantages advantage
(i) Limited capital requirement: Mail order business does not
require heavy expenditure on building and other infrastructural
facilities. Therefore, it can be started with relatively low amount of
capital.
(ii) Elimination of middle men: The biggest advantage of mail-
order business from the point of view of consumers is that
unnecessary middlemen between the buyers and sellers are
eliminated. This may result in lot of savings both to the buyers as
well as to the sellers.
(iii) Absence of bad debt: Since the mail order houses do not
extend credit facilities to the customers, there are no chances of
any bad debt on account of non-payment of cash by the
customers.

OR

Chain stores or multiple shops are networks of retail shops that

are owned and operated by manufacturers or intermediaries.

Limitations
(i) Limited selection of goods: Some of the multiple shops deal
only in limited range of products. This is especially the problem
with the chain stores which are owned and operated by
manufacturers, and as such mostly sell the products produced by
the themselves. They do not sell products of other manufacturers.
In that way the consumers get only a limited choice of goods. This 1 mark for
however is not the case with retailer owned chain stores such as meaning + 1
Big Apple or Reliance Retail which sell products of a large number mark for
of manufacturers. each
(ii) Lack of initiative: The personnel managing the multiple shops limitation
have to obey the instructions received from the head office. This
makes them habitual of looking up to the head office for guidance
on all matters, and takes away the initiative from them to use their
creative skills to satisfy the customers.
(iii) Lack of personal touch: Lack of initiative in the employees
sometimes leads to indifference and lack of personal touch in
them.
( Any other suitable point)
27. a) Entrepreneurship is the process of setting up one’s own (4)
business as distinct from pursuing any other economic activity, be 1 mark for
it employment or practicing some profession. identification
+ 1 mark for
b) The following are the characteristics of entrepreneurship: each feature.
(i) Systematic Activity: Entrepreneurship is not a mysterious gift
or charm and something that happens by chance! It is a
systematic, step-by-step and purposeful activity. It has certain
temperamental, skill and other knowledge and competency
requirements that can be acquired, learnt and developed, both by
formal educational and vocational training as well as by
observation and work experience. Such an understanding of the
process of entrepreneurship is crucial for dispelling the myth that
entrepreneurs are born rather than made.
(ii) Lawful and Purposeful Activity: The object of
entrepreneurship is lawful business. It is important to take note of
this as one may try to legitimize unlawful actions as
entrepreneurship on the grounds that just as entrepreneurship
entails risk, so does illicit businesses. Purpose of entrepreneurship
is creation of value for personal profit and social gain.
(iii) Innovation: From the point of view of the firm, innovation may
be cost saving or revenue-enhancing. If it does both it is more
than welcome. Even if it does none, it is still welcome as
innovation must become a habit!
Entrepreneurship is creative in the sense that it involves creation
of value. By combining the various factors of production,
entrepreneurs produce goods and services that meet the needs
and wants of the society. Every entrepreneurial act results in
income and wealth generation. Entrepreneurship is creative also
in the sense that it involves innovation-introduction of new
products, discovery of new markets and sources of supply of
inputs, technological breakthroughs as well as introduction of
newer organisational forms for doing things better, cheaper, faster
and, in the present context, in a manner that causes the least
harm to the ecology/ environment.
28. a) Mate receipt 1 mark for (4)
b) Packaging list each point
c) Bill of exchange
d) Cart Ticket
29. E- Business 1 mark for (4)
Benefits: identification
i) Ease of formation and lower investment requirements ½ mark for
(ii) Convenience each
(iii) Speed heading and
(iv) Global reach/access ½ mark for
(v) Movement towards a paperless society (any three) explanation
30. (i) A definite commitment by top management of the enterprise to
create, maintain and develop work culture for environmental 1 mark for
protection and pollution prevention. each point
(ii) Ensuring that commitment to environmental protection is
shared throughout the enterprise by all divisions and employees.
(iii) Developing clear-cut policies and programmes for purchasing
good quality raw materials, employing superior technology, using
scientific techniques of disposal and treatment of wastes and
developing employee skills for the purpose of pollution control.
(iv) Complying with the laws and regulations enacted by the
Government for prevention of pollution.

OR
(4)
Responsibility towards the government: An enterprise must
respect the laws of the country and pay taxes regularly and
honestly. It must behave as a good citizen and act according to
the well accepted values of the society.
2 marks for
Responsibility towards the consumers: Supply of right quality each point
and quantity of goods and services to consumers at reasonable
prices constitutes the responsibility of an enterprise toward its
customers. The enterprise must take proper precaution against
adulteration, poor quality, lack of desired service and courtesy to
customers, misleading and dishonest advertising, and so on.
31. a) Equity Shares ½ mark for
Equity shares are the most important source of raising long term identification
capital by a company. Equity shares represent the ownership of a ½ mark for
company and thus the capital raised by issue of such shares is meaning +1
known as ownership capital or owner’s funds. mark for
each merit. (6)
b)The important merits of raising funds through issuing equity
shares are given as below:
(i) Equity shares are suitable for investors who are willing to
assume risk for higher returns;
(ii) Payment of dividend to the equity shareholders is not
compulsory. Therefore, there is no burden on the company in
this respect;
(iii) Equity capital serves as permanent capital as it is to be repaid
only at the time of liquidation of a company. As it stands last
in the list of claims, it provides a cushion for creditors, in the
event of winding up of a company;
(iv) Equity capital provides credit worthiness to the company and
confidence to prospective loan providers;
(v) Funds can be raised through equity issue without creating any
charge on the assets of the company. The assets of a company
 are, therefore, free to be mortgaged for the purpose of borrowings,
if the need be;
32. 1. Obtaining foreign exchange ½ mark for (6)
[Link] order or indent heading +
[Link] letter of credit 1½ mark for
[Link] for finance (with suitable explanation) each
explanation
OR

1. Production or procurement of goods ½ mark each

2. obtaining pre shipment finance heading and
3. Obtaining export license 1½ mark for
4. Assessing the importer’s creditworthiness and securing a explanation
guarantee for payments
(with suitable explanation)

33. ½ mark for

a) Global enterprise/ Multinational corporation/ transnational identification
corporations + 1 mark for
explanation
b) + ½ mark
1. Huge capital resources: “The company has plenty of each for (6)
resources.” quoting the
line + ½
2. Advanced technology: “Master Ltd. is using completely the mark for
latest technology in its various business activities” heading + ½
mark for
each
3. Expansion of market territory: “the company occupied a explanation
dominant position in the market and took over some domestic
firms”

34. a) Certificate of incorporation 1mark for

Identification
b) Preliminary Contracts:
During the promotion of the company, promoters enter into certain + 1 mark of (6)
contracts with third parties on behalf of the company. These are identification
called preliminary contracts or pre-incorporation contracts. These +1mark for
are not legally binding on the company. each
explanation+
2 marks for
c) The Certificate of Incorporation is a conclusive evidence of the explanation+
regularity of the incorporation of a company. The Certificate of 1 mark for
Incorporation once issued, is a conclusive evidence of the quoting lines
existence of the company. Even when a company gets registered
with illegal objects, the birth of the company cannot be questioned.
The only remedy available is to wind it up. Because the Certificate
of Incorporation is so crucial, the Registrar has to go very carefully
before issuing it.

“The registrar issued the document on 8th of March, mentioning

the date of 5th March on it”.