Business Studies (215) - Oct' 2014 | NIOS SECONDARY Solved Papers

Time: 3 Hours
Maximum Marks: 100

1. Karta is related to which form of organisation?            1
(A) Sole proprietorship (B) Partnership 
(C) Joint Hindu family business (D) Co-operative society
Ans.:- (C) Joint Hindu family business
2. In which form of organisation its share can be transferred freely?      1
(A) Sole Proprietorship (B) Partnership firms
(C) Joint stock companies (D) Private company
Ans.:- (A) Sole Proprietorship

3. What is the minimum number of members which are required to form a cooperative society?            1
(A) 2 (B) 7 (C) 10 (D) 20
Ans.:- (B) 7
4. Which of the following type of warehouses are used to store imported goods for which import duty is yet to be paid?                1
(A) Public warehouses (B) Government warehouses
(C) Bonded warehouses (D) Cooperative warehouses
Ans.:- (C) Bonded warehouses
5. Ships plying over a fixed route and following a prescribed timetable are called:          1
(A) Cargo (B) Charterparty (C) Liners (D) Tramp
ans.:- (A) Cargo
6. Which of the following is a tool of sales promotion? 1
(A) Free samples (B) Advertisement (C) Publicity (D) Personal selling
Ans.:- (A) Free samples
7. The ultimate objective of personal selling is:                1
(A) To raise standard of living (B) Provide better quality of products (C) More satisfaction to customers (D) Increase sale of products
Ans.:- (D) Increase sale of products
8. Consumers are unable to make use of their rights due to the lack of:                1
(A) Awareness and ignorance (B) Funds (C) Education (D) Coverage
Ans.:- (A) Awareness and ignorance
9. While selecting a line of business an entrepreneur must keep in his/her mind:           1
(A) Profitability (B) Risk involved (C) Profits (D) All above
Ans.:- (D) All above
10. Self employment means:     1
(A) A contract between the employer and employee
(B) Serving another person for salary or wages
(C) Engaging in some economic activity of his/her own
(D) None of the above
Ans.:- (C) Engaging in some economic activity of his/her own 

11. Enumerate any three social objectives of business. 3

Ans.:- Social objectives of business

(i)     Production and supply of quality goods and services:- Since the business utilizes the various resources of the society, the society expects to get quality goods and services from the business. The objective of business should be to produce better quality goods and supply them at the right time and at a right price.

(ii)   Adoption of fair trade practices:- The business unit must not create artificial scarcity of essential goods or raise prices for the sake of earning more profits. All these activities earn a bad name and sometimes make the businessmen liable for penalty and even imprisonment under the law. Therefore, the objective of business should be to adopt fair trade practices for the welfare of the consumers as well as the society.

(iii) Contribution to the general welfare of the society:- Business units should work for the general welfare and upliftment of the society. This is possible through running of schools and colleges for better education, opening of vocational training centres to train the people to earn their livelihood etc.

12. What is meant by air pollution? State any two causes of air pollution.            3

Ans.:- Air pollution refers to the presence of any unwanted gases, dust particles etc. in the air, that can cause damage to people as well as nature. Common causes of air pollution are:-

a.       Emission of fumes from vehicles.

b.      Emission of smoke, dust and chemicals from manufacturing plants.

13. Explain briefly the following characteristics of a partnership firm:    3

(i) Agreement (ii) Sharing profits (iii) Lawful business

Ans.:- Characteristics of a partnership firm:

(i)     Agreement:- Whenever you think of joining hands with others to start a partnership business, first of all, there must be an agreement between all of the partners. This agreement contains- the amount of capital contributed by each partner, profit or loss sharing ratio, salary or commission payable to the partners, if any etc.

(ii)   Sharing profits:- The main objective of every partnership firm is sharing of profits of the business amongst the partners in the agreed proportion. In the absence of any agreement for the profits sharing, it should be shared equally among the partners.

(iii) Lawful Business:- The partners should always join hands to carryon any kind of lawful business. To indulge in smuggling, black marketing etc, cannot be called partnership business in the eye of the law.

14. Explain any three functions of a wholesaler.               3

Ans.:- Following are the functions, which a wholesaler usually performs.

(a)    Collection of goods:-  A wholesaler collects goods from manufacturers or producers in large quantity.

(b)   Storage of goods:-  A wholesaler collects the goods and stores them safely in warehouses, till they are sold out. Perishable goods like fruits, vegetables, etc. are stored in cold storage.

(c)    Distribution: A wholesaler sells goods to different retailers. In this way, he also performs the function of distribution.

15. Explain briefly the savings schemes offered by post office where the interest income in such scheme is fully exempted from income-tax.      3

Ans.:- Post Office Saving Bank Account:- It is a type of account in which we can deposit our savings in post offices and withdraw it whenever required. A minimum amount of Rupees Fifty is required ot open the account and we can deposit a maximum of Rupees one lac in our account in the case of individual. The account can be jointly operated and in that case the maximum limit of deposit can be raised to rupees two lac. Money can be withdrawn from the account by using withdrawal slips or cheques. Post office pays interest on our deposits, which is totally exempted from income tax.

16. Explain the following characteristics of a Joint Stock Company:          4

(i) Artificial legal person (ii) Separate legal entity

(iii) Perpetual succession and (iv) Common seal

Ans.: Characteristics of a Joint Stock Company:

(i)     Artificial legal Person: A company is an artificial person created by law and existing only in contemplation of law. A human being who takes birth, grows, enters into relationships and dies, whereas a joint stock company also takes birth, grows, enters into relationship and dies. However, it is called an artificial person as its birth, existence and death are regulated by law.

(ii)   Separate Legal Entity: A company has a separate legal entity distinct from its members. It can own property and enter into contracts in its own name. It can sue and be sued in its own name.

(iii) Perpetual Succession: A company enjoys a perpetual succession and its life is not affected by the death, insolvency, lunacy, etc. of its members or directors.

(iv)  Common Seal: A company has a common seal because being an artificial person it cannot sign for itself.

17. Differentiate between Life Insurance and Fire insurance on any four basis. 4

Ans.:- The following are the differences between Life Insurance and Fire Insurance:-

Basis of Difference

Life Insurance

Fire Insurance


No loss is compensable specific amount is paid.

Amount insured or Actual loss whichever is less is given as compensation.

Insurable Interest

Insurable interest must exist at the time of taking policy.

Insurable interest must exist both at the time of taking policy as well as the time of loss.

Assignment of Policy

No Assignment is done

No assignment without permission of Insurance Company.

Nature of Risk

Certain but the time is uncertain.


18. State any four features of large scale retail trade.     4

Ans.:- The following are some of the common features of large-scale retail trade:-

(i)      It deals in a variety of goods of daily need and makes these goods available to the customers at their convenience.

(ii)    It purchases goods in bulk directly from the manufacturers, thus avoiding middlemen in the process of purchase of goods.

(iii)   It provides service to a large number of customers.

(iv)  The size of the shops/stores is comparatively bigger than the local retail shops/stores.

19. Explain the following problems faced by the consumers:      4

(i) Sale of spurious products (ii) Hoarding and black marketing

Ans.:- (i) Sale of spurious products:- Sale of spurious products, that is, selling something of no value instead of the real product. This is often found in the case of medicines and drugs or health care products. Cases have been reported where ampoules for injections contained only water or glucose water in bottles contained only distilled water.

(ii) Hoarding and black marketing:- Hoarding and black-marketing is another problem that consumer often face. When any essential commodity is not made available in the open market and stocks are intentionally held back by dealers it is known as hoarding. Its purpose is to create an artificial scarcity, to push up the prices.

20. Give any four differences between self employment and wage employment.           4

Ans.:- Differences between self employment and wage employment:-


Self employment

Wage employment


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.

21. An illiterate person wants to open a Saving Bank Account in a bank. He seeks your help in filling the application form. What all information will you seek from him to fill up the form?             5

Ans.:- The application form ha to be filled up giving the following necessary information:

a.       Name of the person (applicant)

b.      His/her occupation

c.       Residential Address

d.      Specimen signature of the applicant

e.      Name, address, account number and signature of the person introducing the applicant. Besides the above information I have to give an undertaking that i will abide by the rules and regulations of the bank, which are in force. At the end of the application form, i have to put his signature, or thumb impression. And two passport size photographs of the applicant along with the application.

22. Explain briefly any five characteristics of sole proprietorship business.         5

Ans.:- Sole proprietorship has the following characteristics

(i)     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.

(ii)   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.

(iii) 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.

(iv)  One man’s Capital:- The capital required by a sole proprietorship form of business organisation is totally arranged by the sole proprietor. He provides it either from his personal resources or by borrowing from friends, relatives, banks or other financial institutions.

(v)    One-man Control:- The controlling power in a sole proprietorship business always remains with the owner. The owner or proprietor alone takes all the decisions to run the business.

23. What is meant by Business Process Outsourcing? State any four advantages of Business Process Outsourcing.5

Ans.:- Business Process Outsourcing (BPO) can be defined as the act of giving a other party responsibility what would otherwise be an internal system or service.

Following are the advantages of Business Process Outsourcing

(a)    Achieve cost reductions:- This is made possible through process improvements, reengineering, and use of technologies that reduce and bring administrative and other costs under control.

(b)   Key in on company’s main business:- With the day-to-day back office operations taken care of, the management is free to devote more time to building the company’s core businesses.

(c)    Obtain outside expertise:- Rather than recruiting and training personnel, BOP ensures that domain experts from another company provide the needed guidance and skills.

(d)   Meet constantly changing customer demands:- Many BPO vendors provide the management with flexible and scalable services to meet the customers’ changing requirements, and to support company acquisitions, consolidations, and joint ventures.

24. What is meant by the term ‘Purchase’? Explain in brief any two modes of purchase.5

Ans.:- Purchase is a process through which a person gets the ownership of some goods or properties transferred in his name from another, on payment of money. Modes of purchase:

(a)    Purchase by inspection:- Suppose we want to buy a shirt or a pen or some vegetables. Now what do we do? We will possibly go to the nearest shop and check by our self the shirt or pen or vegetables before buying them. This is the most common method of buying known as purchasing by inspection. It is mostly used in case of retail buying.

(b)   Purchase by sample/pattern:- When we want to buy goods in bulk, it is not possible to inspect the whole lot to be purchased. What we do is look at the sample or pattern and then decide which one to buy. A sample is a specimen of goods, particularly of raw materials, foodstuffs, etc.

25. Explain in brief the following rights of consumers:   5

(i) Right to be heard (II) Right to seek redressal.

Ans.:- Rights of consumers:-

(i)     Right to be heard:- This right has three interpretations. Broadly speaking, this right means that consumers have a right to be consulted by Government and public bodies when decisions and policies are made affecting consumer interests. Also, consumers have a right to be heard by manufactures, dealers and advertisers about their opinion on production and marketing decisions. Thirdly, consumers have the right to be heard in legal proceeding in law courts dealing with consumer complaints.

(ii)   Right to seek redressal:- If and when any consumer has a complaint or grievance due to unfair trade practices like charging higher price, selling of inferior quality or unsafe products, lack of regularity in supply of services etc. or if the has suffered loss or injury due to defective or adulterated products, he has the right to seek remedies. He has a right to get the defective goods replaced or money refunded by the seller or dealer.

26. Your father who is running his business in a traditional way is against your suggestion to start using internet i.e. switch over to E-commerce. Explain him any four advantages of E-commerce. 6

Ans.:- E-commerce:- The Internet is now a flourishing industry. With the technology advancing at a fast rate, more and more people are open to computers and internet. Increasingly they are learning to utilize the Internet for their day to day needs. Here e-commerce websites take a front seat, moving out to the millions of people searching for your kind of product or services online.

The following are the advantages of e-commerce

(i)     Wider choice:- With the help of a well-developed computer networking system, business units can operate at the national as well as global level. The customers thus, have a wider choice of products and services.

(ii)   Improved customer services:- Supplier of goods and services can offer a wide range of services to the customers, before as well as after sales such as information about products, guidance for use, responding to customers’ querries about quality and usefulness of the product, etc.

(iii) Quick response to customer needs:- In e-commerce business transactions take far less time as compared to the normal process of buying and selling. This is because the producers cut short the distribution channel and supply products and services directly to consumers.

(iv)  Cost saving and price reduction:- There is substantial cost saving in business transactions conducted through e-commerce. There is no need to display goods in showrooms or keep large stock in godowns. The number of employees required to carry on the business is less.

27. Define communication and explain the elements of the process of communication.               6

Ans.:- Communication may be defined as- “A process of sharing facts, ideas, opinions, thoughts and information through speech, writing, gestures or symbols between two or more persons.”

Hence ‘Communication Process’ includes the following elements:

Sender – The person who sends the message. Also known as the source.

Receiver – The person who receives the message.

Message – Subject matter of communication. It may contain facts, ideas, feelings or thoughts.

Feedback -  Receiver’s response or reaction or reply to the message, which is directed towards the sender.

28. Explain (i) Hoardings (ii) Posters and (iii) Vehicular displays as the media of advertisement.              6

Ans.:- Media of advertisement:-

(i)     Hoardings:- While moving on roads you must have seen large hoardings placed on iron frames or roof tops or walls. These are normally boards on which advertisements are painted or electronically designed so that they are visible during day or night. The advertisers have to pay an amount to the owners to the space, where the hoardings are placed.

(ii)   Posters:- Posters are printed and posted on walls, buildings, bridges etc to attrat the attention of customers. Posters of films which are screened on cinema halls are a common sight in our country.

(iii) Vehicular displays:- You must have seen advertisements on the public transport like buses, trains, etc. Unlike hoardings these vehicles give mobility to advertisements and cover a large number of people.

29. Amogh purchased a Home Theatre System for Rs. 20,000 with one year warranty. After some times it stopped functioning. Amogh approached the dealer for the replacement of the system, but it was not done. He is advised to go to consumer court. Which consumer court he should approach and why? Name the other consumer courts with their pecuniary jurisdiction. Also state which documents he must possess as a proof of transaction.   6

30. Define entrepreneurship and explain any three reasons why entrepreneurship is important?                           6

Ans.:- Entrepreneurship:- Entrepreneurship is the act of being an entrepreneur, which can be defined as “one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods”. Its importance can be expressed in the form mentioned below:

1)      Provides employment to the people:- People often hold a view that all those who do not get employed anywhere jump into entrepreneurship, but in reality now a day most of the business are set by those who have other options available with them.

2)      Contributes towards research and development system:- Almost 2/3rd of all innovations are due to the entrepreneurs. Without the boom of inventions the world would have been a much dry place to live in. Inventions provide an easier way of getting things done through better and standardized technology.

3)      Creates wealth for the nation and for the individuals as well:- All individual who search business opportunities usually, create wealth by entering into entrepreneurship. The wealth created by them plays a significant role in the development of the nation.


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