SAMPLE PAPER MARKING SCHEME

ANNUAL EXAMINATION (2024-25)

SUBJECT: BUSINESS STUDIES (054)
GRADE: XI

TIME: 3 HRS. M.M: 80 Marks

General instructions:
I. This question paper contains 34 questions.
II. Marks are indicated against each question.
III. Answers should be brief and to the point.
IV. Answers to the questions carrying 3 marks may be from 50 to 75 words.
V. Answers to the questions carrying 4 marks may be about 150 words.
VI. Answers to the questions carrying 6 marks may be about 200 words.

Q.NO. QUESTION MARKS

1. Free Guidance by a teacher to his son is: 1

A. An economic activity
B. Profession
C. Employment
D. A non-economic activity.
2. Business risk is not likely to arise due to 1
A. Changes in government policy
B. Good management
C. Employee dishonesty
D. Power failure
3. Choose the correct alternative: 1
Assertion :(A) Registration of a partnership firm is a conclusive proof of its existence.
Reason: (R) It is optional for a partnership firm to get registered.
A. Both A and R are true and R is the correct explanation of A.
B. Both A and R are true and R is not the correct explanation of A.
C. A is true but R is false.
D. A is false but R is true.
4. What is the maximum number of partners which a partnership firm may have which is 1
involved in a manufacturing business?
A. 50
B. 20
C. 10
D. Unlimited
5. Preliminary contracts are 1
A. Binding on the company
B. Binding on the company, if ratified after incorporation
C. Binding on the company, after incorporation
1/9
 D. Not binding on the company
6. Assertion (A): Political interference is a demerit of government company. 1
Reason(R): The operational policies of the government companies are formed
according to the whims and fancies of the ministers.
On the basis of above Assertion and Reason choose the correct answer from the
options given below.
A. Both Assertion and Reason are correct and the Reason is a correct explanation of
the Assertion.
B. Both Assertion and Reason are correct but Reason is not a correct explanation of
the Assertion.
C. The Assertion is correct but Reason is incorrect.
D. Both the Assertion and Reason are incorrect.
7. Which of the following is not an objective of PSUs? 1
A. Development of infrastructure
B. Import substitution
C. Profit maximization
D. Regional balance
8. How powers and objectives of public corporation defined? 1
A. By Companies Act
B. By Partnership Act
C. By Special Act
D. All of the above
9. Public sector organizations may either be partly or wholly owned by the___________ 1
government.
A. State
B. Central
C. Foreign
D. Central or state
10. Insurance Company believes that the insured is not hiding anything while taking 1
insurance. This is indicating which principal of Insurance:
A. Utmost Good Faith
B. Indemnity
C. Insurable Interest
Mitigation
11. A Mail sent by Purchase department to Production department is example of 1
which of the following:
A. B2B
B. B2C
C. C2C
D. Intra B
12. It is very difficult to measure the end of ethical programmes, the firms can audit to 1
monitor compliance with ethical standards. Is related to which element of business
ethics:
A. Establishment of compliance mechanism
B. Measuring results
C. Involving employees at all levels
D. Top management commitment
13. Funds required for purchasing current assets is an example of 1
A. Fixed capital requirement
B. Ploughing back of profits
2/9
 C. Working capital requirement
D. Lease financing
14. Internal sources of capital are those that are 1
A. Generated through outsiders such as suppliers
B. Generated through loans from commercial banks
C. Generated through issue of shared
D. Generated within the business
15. It was set up in 1955 to promote, aid and foster the growth of small business units in 1
India. It provides technology to SSIs and create awareness on technological
upgradation.
A. Small Industries Development Bank of India (SIDBI)
B. National Bank for Agriculture and Rural Development (NABARD)
C. National Small Industries Corporation (NSIC)
D. District Industrial Centres (DICs)
16. Limit of investment in small scale industry is................. 1
A. five crore
B. ten crore
C. two crore
D. one crore
17. Small industries contribute.................... of gross industrial value. 1
A. 45 per cent
B. 48 per cent
C. 40 per cent
D. 49 per cent
18. Which of the following is not an advantage of exporting? 1
A. Easier way to enter into international markets
B. Comparatively lower risks
C. Limited presence in foreign markets
D. Less investment requirements
19. The International business as it exists today is to a great extent the result of---- 1
A. Language specialization
B. Geographical specialization
C. Cultural differences
D. Custom practices
20. Labour productivity and production cost differ among nations due to --------- -- 1
A. Geographical reason
B. Agricultural reason
C. Personal reason
D. Government policies
21. Zainab, Shelly & Ravisha are friends. They have just completed a fashion designing 3
course. They wish to start a business together. They have Rs.10,00,000 savings put
together and are planning to take a bank loan of additional Rs.10 lakhs. They have
found a prime location in Karol Bagh where they can set their boutique. They decide
that they will initially not take very big orders. Based on this information, quote the
lines associated with factors affecting the decision to start a business and classify
them.
Ans. The Factors are:
• Selection of type of business: A person can enter primary, secondary or tertiary
industry, based on the possibility of profit, demand, customer preference etc. In the
case above they selected the business to be a boutique.
3/9
 Quotation: “They have just completed a fashion designing course. They wish to start
a business together.”
• Financing proposition: For every business, availability of capital or funds is an
important factor while starting a business. Because capital is needed in each activity
and aspect of business, such as in investment in fixed assets, stocks, meeting day to
day expenses, etc.
Quotation: “They have Rs.10,00,000 savings put together and are planning to take a
bank loan of additional Rs.10 lakhs.”
• Location of business enterprise: It's an important factor while starting a business.
The location of business is dependent on the easy availability of raw materials and
labour, banking services, transportation services nearby etc. Any mistake in this can
result in high losses to business.
Quotation: “They have found a prime location in Karol Bagh where they can set up
their boutique.”
• Size of Business: Every person has to decide whether it wants to operate on a large
scale or at a medium scale. It depends upon demand for the product and the
necessary capital that person has. If a person is optimistic about all the factors, he
can open up his business on a large scale, and vice versa.
22. What do you mean by Preference Share? What preference does it got over other 3
type of share?
OR
Briefly explain the features of debenture.
Ans.
Preference Shares= Share getting some preference over Equity share is called
Preference Share.
The preference shareholders enjoy a preferential position over equity shareholders
in two ways: (i)receiving a fixed rate of dividend, out of the net profits of the
company, before any dividend is declared for equity shareholders
(ii) receiving their capital after the claims of the company’s creditors have been
settled, at the time of liquidation.
OR
A debenture typically carries the following features:
1. Debentures are nothing but documents. In other words, they possess documentary
value.
2. These documents are evidence of debt. This shows that the company owes a debt
to the debenture-holder.
3. The interest on debentures is always payable at a fixed rate. Further, the company
has to pay interest regardless of whether it makes profits or not.
4. The company may either repay the debt or even convert the debenture into shares
or other debentures.
5. Debentures may or may not carry a charge on the company’s assets.
6. Finally, debentures are generally transferable. Debenture-holders can sell them on
stock exchanges at any price.

23. Why are consumers cooperative stores considered to be less expensive? What are its 3
relative advantages over other large scale retailers?
Ans: Consumer cooperative stores are formed by groups of consumers to provide
goods at reasonable prices to members of consumer societies. In such societies, the
role of middlemen is eliminated as these societies purchase goods from
manufacturers or wholesalers directly and sell them to society members at
4/9
 reasonable rates. As consumer cooperative stores do not aim at profit-making, the
prices of goods offered by them are much lower than the prices of goods at retail
shops. Compared with large-scale retailers, the capital requirement for starting a
consumer cooperative society is very low. Thus, consumer cooperative stores do not
require much investment, and the goods sold by them are priced lower.
The following are some advantages that consumer cooperative stores have over
large- scale retailers:
1. Democratic management: Consumer cooperative stores are democratic
organisations as they are managed and controlled by elected managing
committees of consumer societies. The members of managing committees are
elected by the members of consumer societies on the principle of ‘one
member, one vote’.
2. Limited liability: The liability of the members of consumer cooperative
societies is limited to the amount of shares held by them. Thus, in case a
society’s liabilities increase beyond the assets, the members will not be liable
to repay the debts using their personal assets.
3. Low price of goods: As the goods offered by consumer cooperatives are
directly purchased from manufacturers and wholesalers, the role of
middlemen is eliminated. Therefore, consumer societies are able to sell goods
at lower prices.

24. This document is prepared by shipping company to acknowledge the receipt of goods 3
on ship and gives an undertaking to carry them to port of destination. Name and
Explain the document.
Ans. Bill of Lading:
• It is prepared by Shipping company acknowledging the receipt of goods on
board the ship.
• It is a document of title of goods and is freely transferable by endorsement
and delivery.
• It contains an undertaking to carry them to the port of destination.
25. What do you mean by commerce? Classify it. 4
Ans. The term commerce is referred to all those activities that indirectly or directly
help distribute goods to the end consumers and customers.
commerce can be classified into 2 categories:
Trade, which is an integral part of commerce and refers to buying and selling of
goods and services. There are two types of trade under commerce:
• Internal trade: it refers to buying and selling of goods and services within the
geographical boundaries of the country. It is also called as home trade. Internal
trade is further of two types:
o Wholesale trade
o Retail trade
• External trade: the next category of trade is external trade which refers to buying
and selling of goods and services beyond the geographical borders of the nation. It is
called trade between two or more countries. It is of 3 types:
o Imports
o Exports
o Entrepot
26. Explain limitations of e business. 4
Ans. Limitation of e-Business

5/9
 1. Low personal touch: e-business lacks warmth of interpersonal interactions. To
this extent, it is relatively less suitable mode of business in respect of product
categories requiring high personal touch such as garments, toiletries, etc.
2. Incongruence between order taking/giving and order fulfilment speed:
Information can flow at the click of a mouse, but the physical delivery of the product
takes time. At times, due to technical reasons, web sites take unusually long time to
open. This may sometimes frustrate the user.
3. Need for technology capability and competence of parties to e-business: Apart
from the traditional 3R‘s (Reading, WRriting, and ARithmetic), e-business requires a
fairly high degree of familiarity of the parties with the world of computers.
4. Increased risk due to anonymity and non-traceability of parties: Internet
transactions occur between cyber personalities. As such, it becomes difficult to
establish the identity of the parties. Moreover, one does not know even the location
from where the parties may be operating. There is also a risk of virus,‘ and hacking.‘
5. People resistance: The process of adjustment to new technology and new way of
doing things causes stress and a sense of insecurity. As a result, people may resist an
organisation‘s plans of entry into e-business.
6. Ethical fallouts: Nowadays, companies use an e̳ lectronic eye‘ to keep track of the
computer files you use, your e-mail account, the websites you visit etc. this is an
example of ethical fallouts.
27. State any four benefits of doing ethical business. 4
OR
Explain briefly the need for pollution control.

Ans. Benefits of doing ethical business:

(a)Ethical business is good business.
(b)It improves public image and support
(c)Earns people’s confidence and trust
(d)Leads to greater success
OR
Reduction of health hazard
Pollution control measures can check diseases like cancer, heart attack & lung
complications and support a healthy life on earth.
Reduced Risk of Liability
When people are affected by toxicity released by any business, the business is liable
to pay compensation. If the business installs pollution control devices, it can escape
from such a liability.
Cost Saving
Pollution control needs improved production technology which automatically
reduces cost.
Improved Public Image
A firm that promotes the cause for environment will enjoy public confidence and
good reputation.
Other social benefits
Cleaner buildings, cleaner roads, clearer visibility, better quality of life, availability
of natural products in a purer form are some of the other social benefits the society
can get through proper pollution control system.
28. State any three benefits of doing ethical business. 4
Ans. Benefits of doing ethical business:
(a)Ethical business is good business.
6/9
 (b)It improves public image and support
(c)Earns people’s confidence and trust
(d)Leads to greater success
29. Draw a difference between Owners’ fund and Borrowed fund. 4

30. Write the difference between Internal and External Trade. 4

Ans.

31. A person gets his stock with Rs.25,000 insured for Rs.35,000. A fire occurs and the whole 6
stock gets damaged. The insurance company will pay him only Rs.25,000, the actual
value of his stock and not Rs.35,000. Explain Which principle of insurance is applied in
this case?
Ans. Principle of indemnity: It refers that the insured can get only the compensation
against actual loss and he cannot make profit out of it. All contracts of Insurance
(except Life, personal accidents and Sickness Insurance) are contract of Indemnity.
32. Madhu is running a general store. The store was insured against natural disaster like 6
flood, earthquake and fire from Hindustan General Insurance Company for the amount
of 50 lacs.
Heavy raining in the city caused massive flood. This left the store without any security.
The store was looted by people which was caught on CCTV She claimed from the
insurance company the amount of damage of ` 13 lacs for the material and furniture
spoiled from flood and also ` 5 lacs for the loss of material by theft, she also claimed
another ` 25 lacs to convert the store into fully AC and additional floor for more storage
space. Insurer after assessing the damage to the property and stock due to flood and
seeing the CCTV footage, accepted the claim of ` 13 lacs. Madhu argued that as she has
being paying premium for ` 50 lacs, she
should be paid the full claim of ` 43 lacs.
1.What is the fundamental principle of insurance on the basis of which insurer accepted
a claim?
2.Identify the another principle of insurance involved by insurance company by
accepting the claim amount of ` 13 lacs.

7/9
 3. According to you, how much compensation should be reimbursed by insurance
company?
OR
B. Explain the types of bank accounts that can be opened with a commercial bank.

Ans 1. Principle of indemnity: It refers that the insured can get only the compensation
against actual loss and he cannot make profit out of it.
2. Principle of proximate cause: When the loss is the result of two or more causes, the
proximate cause, i.e. the direct the most dominant & most effective cause of loss
should be taken into consideration.
3. Rs 13 lakhs should be reimbursed by insurance company
OR
B. TYPES OF BANK ACCOUNTS
1.Saving Deposit Account: A person can open a saving deposit amount by depositing
a small sum of money. He can withdraw the money whenever needed and can
withdraw and can deposit whenever is available.
2. Current Deposit Account: These account are open by businessmen the account
holder can deposit and withdraw whenever desired.
3. Fixed Deposit Account: A Fixed Deposit is repayable after the expiry of the specified
period . The rate of interest in Fixed Deposit is higher.
4. Recurring Deposit Account: A depositor can deposit a fixed amount say rs 100 every
month for a fixed period the amount together with interest is repaid on maturity
5. Multiple Option Bank Deposit: They contain the features of fixed deposit as well as
saving bank account. Effective rate of interest is higher than saving account
33. Write down the distinctive features of Equity Share. 6
Ans. Permanent Shares: Equity shares are permanent in nature. The shares are
permanent assets of a company. And are returned only when the company winds
up.
2. Significant Returns: Equity shares have the potential to generate significant
returns to the shareholders.
However, these are risky investment option In other words, equity shares are highly
volatile. The price movements can be drastic and are dependent on multiple
internal and external factors. Therefore, investors with suitable risk tolerance levels
should only consider investing in these.
3. Dividends: Equity shareholders share the profits of a company. In other words, a
company may distribute dividends to its shareholders from its annual profits.
However, a company is under no obligation to distribute dividends. In case a
company doesn’t make good profits and doesn’t have surplus cash flow, it can
choose not to give dividends to its shareholders.
4. Voting Rights: Most equity shareholders have voting rights. This allows them to
select the people who will govern the company. Choosing effective managers assists
the company to enhance its annual turnover. As a result, investors can receive
higher average dividend income
5. Additional Profits: Equity shareholders are eligible for additional profits a
company makes. It, in turn, increases the wealth of the investor.
6. Liquidity: Equity shares are highly liquid investments. The shares are trade on the
stock exchanges. As a result, you can buy and sell the share anytime during trading
hours. Therefore, one doesn’t have to worry about liquidating their shares.
7. Limited Liability: Losses a company makes doesn’t affect the ordinary
shareholders. In other words, the shareholders are not liable for the company’s debt
8/9
 obligations. The only effect is the decrease in the price of the stocks. This will have
an impact on the return on investment for a shareholder.
34. Uma, a village girl, comes to Delhi to visit her relatives. She goes with her cousin to a 6
shop, which is centrally located. She becomes astonished by the varieties of goods
which are sold here.
(a) Identify this type of shop.
(b) Quoting lines from the above paragraph describe two characteristics of the shop.
(c) Explain advantages of such shops.
OR
Differentiate between departmental store and multiple shop on the basis of any
points.
Ans.
a) Departmental Stores.
b) Features
• Departmental stores are located at the heart of the city.
• They aim at satisfying all the needs of the customers under one roof
Advantages:
• Attract large number of customers.
• Buying is made easier.
• More services are provided.
• Benefits of large scale operations.
• Sales get increased by advertising.
OR

9/9