Business Studies (215) - April' 2015 | NIOS SECONDARY Solved Papers

Time: 3 Hours
Maximum Marks: 100

1. ‘Vivek Ltd’, is manufacturing fans. The entire production is purchased by M/s. Shakti and Sons, who in turn sells it to various retailers. Mrs. Vineeta purchased a fan from ‘Maharaja Stores’. Maharaja Stores is a : 1
(A) Consumer
(B) Wholesaler
(C) Retailer
(D) Manufacturer
Ans.:- (C) Retailer
2. Ships which belong to a regular shipping company and ply over a fixed route on a
prescribed time table are called : 1
(A) Tramps
(B) Charter party
(C) Liners
(D) Cargo
Ans.:- (D) Cargo

3. Which of the following is not an advantage of water transport ? 1
(A) A safe mode of transport with respect to occurrence of accidents.
(B) It is not affected by adverse weather conditions.
(C) It is relatively an economical mode of transport for bulky and heavy goods.
(D) It promotes international trade.
Ans.:- (D) It promotes international trade.
4. A peon ringing a bell in the school is an example of 1
(A) Verbal Communication
(B) Visual Communication
(C) Aural Communication
(D) Gestural Communication
Ans.:- (C) Aural Communication
5. The minimum deposit required to be made each year in Public Provident Fund Account is 1
(A) ` 100
(B) ` 500
(C) ` 1,000
(D) ` 5,000
Ans.:- (A) ` 100
6. A document which contains the details of the transaction and the amount to be received is known as : 1
(A) Quotation
(B) Invoice
(C) Dispatch Note
(D) Letter of Advice
Ans.:- (B) Invoice
7. When one or more type of goods are sold to customers through big shops it is called : 1
(A) Manufacturing
(B) Retailing
(C) Large-scale retailing
(D) Wholesale trade
Ans.:- (C) Large-scale retailing
8. Advertisement of ‘Polio vaccination’ on a Bus is the use of following media of advertising : 1
(A) Electronic Media
(B) Print Media
(C) Other Media
(D) None of the above
Ans.:- (B) Print Media
9. Career means : 1
(A) Thinking suitably about positive and negative aspects of a career.
(B) Work done in different job positions.
(C) An occupation with which opportunities for advancement can be availed
(D) Joining a job
Ans.:- (C) An occupation with which opportunities for advancement can be availed
10. An Entrepreneur is a person, who    1
(A) generates jobs for himself only.
(B) learns only after committing the mistakes repeatedly.
(C) cannot take risks in converting ideas into action
(D) is creative and innovative in terms of identifying opportunities.
Ans.:- (D) is creative and innovative in terms of identifying opportunities.

11. Jatin got insured his bungalow against fire for ` 20,00,000. A portion of it was burnt due to fire. It was estimated that an expenditure of ` 15,00,000 would restore the bungalow to its original condition. Jatin made a claim of ` 20,00,000 stating that he was paying premium for the insurance of ` 20,00,000. The insurance company rejected his claim and paid only ` 15,00,000. Name and explain the principle of insurance on which the company’s decision is based. 3

Ans.:- It is a contract of indemnity, that is, the insured cannot claim anything more than the value of property lost or damaged by fire or the amount of policy, whichever is lower. 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 cause of fire being immaterial. 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 ot a maximum amount for which he had taken the policy. He cannot make a profit though insurance. 

12. State any three characteristics of an ideal warehouse. 3

Ans.:-However, a warehouse is said be an ideal warehouse if it possesses certain characteristics, which are

(i)      Warehouse should be located at a convenient place near highways, railway stations, airports and seaports where goods can be loaded and unloaded easily.

(ii)    Mechanical appliances should be there for loading and unloading the goods. This reduces the wastages in handling and also minimizes handling costs.

(iii)   Adequate space should be available inside the building to keep the goods in proper order.

13. Differentiate between ‘Departmental Store’ and ‘Super Bazaar’ on the basis of : 3

(i) Ownership

(ii) Price of goods

(iii) Facilities

Ans.:- The following are the differences between ‘Departmental Store’ and Super Bazaar:-


Departmental Store

Super Bazaar


This stores are owned by private individuals.

Super bazaars are owned by co-operative societies.

Price of goods

Prices of goods are generally higher than market rate.

Goods are sold at a cheaper rate in comparison to departmental stores.


Certain facilities like restaurant, toilet, telephone, etc. are made available to the customers.

No such facilities are made available to the customers.

14. Explain ‘Proof of Transactions’ and ‘Proper use of Product/Services’ as responsibilities of consumers. 3

Ans.:- Proof of Transactions:- The responsibility of every consumer is that the proff of purchase and documents relating to purchase of durable goods should be invariably obtained and preserved.

Proper use of Product/Services:- Some consumers, especially during the guarantee period, make rough use of the product, thinking that it will be replaced during the guarantee period. This is not fair on their part. They should always use the products properly.

 15. Explain how ‘The Standards of Weights and Measures Act, 1956’ provides legal protection to consumers. 3

Ans.:- The Standards of Weights and Measures Act, 1956:- This Act provides for the use of standard weights and standard measures of length throughout the country, ‘ Metre’ has been specified as the primary unit for measuring length, and ‘kilogram’ as the primary unit for measuring weight. Before this act came into force, different system of weights and measures were used in different parts of the country like ‘Pound’, ‘Chhatak’ and ‘Seer’ as Weights, Yard, Inch  and Foot for length, etc, These differences provided opportunities for traders to exploit the consumers.

16. Abhinav purchased a machine for ` 22 lakhs to manufacture steel utensils from ‘Hi-tech Machines Ltd’. After few days of operating the machine, Abhinav found that the utensils manufactured were defective. He complained this to ‘Hi-tech Machines Ltd’, but despite many complaints, the defect was not rectified.

(a) Where can Abhinav file a complaint ?

(b) What remedies are available to Abhinav if the Court is satisfied with the

genuineness of the complaint ? State any three. 4

ans.:- (a) Abhinav can file a complaint to State Consumer Disputes Redressal Commission.

(b) Forum/Commission may order one or more of the following reliefs:

(i) Removal of defect in goods/deficiency in services.

(ii) Replacement of the goods/restoration of the service.

(iii) Refund of the price pain for goods or excess charge paid for service.

17. What is meant by Joint Hindu Family Business ? State any three limitations of ‘Joint Hindu Family’ Business. 4

Ans.:- Joint Hindu Family Business:- The Joint Hindu family business refers to a business which is owned by the members of a joint Hindu family. It is also known as Hindu Undivided Family Business. This form of organisation exits under Hindu law and is governed by the law of succession. The joint Hindu family form is a form of business organisation in which the family possesses some inherited property.

The following are the limitations of Joint Hindu Family Business:

(i)     Unlimited liability:- The Karta is personally liable for all business obligations. For payment of business debts, his personal property can be sold if the business assets are insufficient.

(ii)   Limited access to capital:-The Karta has limited scope for raising capital. Her/his own funds may be insufficient for expansion. This reduces the scope for business growth.

(iii) Karta too powerful:- An incompetent Karta may ruin the business since all business decisions are taken by him.

18. State any four advantages of ‘Railway Transport’. 4

Ans.:- The following are the advantages of ‘Railway Transport’:

a)      It is a convenient mode of transport for travelling long distances.

b)      It is relatively faster than road transport.

c)       It is suitable for carrying heavy goods in large quantities over long distances.

d)      Its operation is less affected by adverse weather conditions like rain, floods, fog, etc.

19. Explain ‘Tele-shopping’ and ‘Internet-shopping’ as types of ‘Non-store retailing’. 4

Ans.:- Types of ‘Non-store retailing’:-

Tele-shopping:- They contact the prospective buyers through telephone and persuade them to buy their products. In some cases they advertise their product on television or other media. They clearly explain the features and also make live demonstration of the products.

Internet Shopping:- Shopping through Internet or Internet shopping is a system of retailing of goods through the Internet. The seller or manufacturers provides all information regarding the product, its specification, uses, etc. through its website. As a customer you have to access the website and view different products according to your need. Then you can compare the price of similar products available and also give special instructions to the seller regarding the goods. You have to make all payments through your credit card.   

20. Differentiate between ‘Self-employment’ and ‘Wage-employment’ on the basis of: 4

(i) Nature

(ii) Status

(iii) Income

(iv) Risk Bearing

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. State any five impacts of ‘Air-Pollution’. 5

Ans.:- Impact of Air Pollution:- Air pollution has a lot of impact on our surroundings and on us. Some of them are-

a)      Presence of gases in air, which are not required by human beings, animals and birds, creates serious health problems. It can create diseases like asthma, cough and cold, blindness, hearing loss, skin disease etc.

b)      Air pollution creates smog in the winter, which is caused by smoke and dust when they mix with fog. It reduces natural visibility and irritates the eyes and respiratory tract.

c)       Ozone layer is a protective layer of gases around our earth, which protects us from harmful ultraviolet rays that come from the sun. It gets depleted because of air pollution and thereby causes gene mutation, genetic defects and skin cancer.

d)      The temperature of the earth increases due to air pollution. This is because whatever heat our earth receives from the sun is not radiated to the atmosphere due to the excessive presence of gases like carbon dioxide, methane, nitrous oxide etc.

e)      Air pollution causes acid rain which means excessive presence of various poisonous gases like sulphur dioxide, nitrogen oxide etc.

22. Pranaya, after passing her XII class examination decided to open a small eating joint of her own along with two of her friends in the name of ‘Hamara Bhoj’. Each one of them contributed ` 50,000 towards initial capital. They also decided to share profits equally and that each of them will be liable for the acts performed by the other two. Identify the form of business-organisation which was set-up by Pranaya and her friends and explain its any four characteristics. 5

Ans.:- This is a Partnership form of business organisation. The following are the characteristics of partnership business organisation:-

i.        Two or more Members:- At least two members are required to start a partnership business.

ii.      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 you.

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

iv.     Sharing of profit:- The main objective of every partnership firm is sharing of profits of the business amongst the partners in the agreed proportion.

23. Explain the concept of ‘Knowledge-Process-Outsourcing’ and any three advantages of it to the companies. 5

Ans.:- ‘Knowledge Process Outsourcing’ in simple words it is the upward shift of BPO in the value chain. Old BPO companies that used to provide basic backend or customer care support are moving up this value chain. Following are the advantages of Knowledge Process Outsourcing:

(a)    Accelerate Reengineering Benefits:- Reengineering aims for drastic improvements in critical measures of performance such as cost, services, quality and speed. But the need to increase efficiency comes into direct conflict with the need to invest in core business. As non-core internal functions are continually put on the back seat, systems become less productive and less efficient.

(b)    Access to Top Class Capabilities:- Good and competent providers make  extensive investments in technology, people and methodologies. They acquire expertise by working with many clients facing similar challenges.

(c)    Cash Infusion:- Outsourcing often involves the transfer of assets from customer to the provider. Equipment, vehicles, facilities, and licenses used in the current operations contain value and are sold to the vendor. The vendor uses these assets to provide services back to the client.

(d)   :- Reengineering aims for drastic improvements in critical measures of performance such as cost, services, quality and speed. But the need to increase efficiency comes into direct conflict with the need to invest in core business. As non-core internal functions are continually put on the back seat, systems become less productive and less efficient.

(e)    Access to Top Class Capabilities:- Good and competent providers make  extensive investments in technology, people and methodologies. They acquire expertise by working with many clients facing similar challenges.

(f)     Cash Infusion:- Outsourcing often involves the transfer of assets from customer to the provider. Equipment, vehicles, facilities, and licenses used in the current operations contain value and are sold to the vendor. The vendor uses these assets to provide services back to the client.

24. Explain any five functions of a retailer. 5

Ans.:- The following are the functions of retailers

(I)     Buying and Assembling of goods:- Retailers buy and assemble varieties of goods from different wholesalers and manufacturers. They keep goods of those brands and variety which are liked by the customers.

(II)   Storage of goods:- To ensure ready supply of goods to the customer retailers keep their goods in stores. Goods can be taken out to these store and sold to the customers as and when required.

(III) Credit facility:- Although retailers mostly sell goods for cash, they also supply goods on credit to their regular customers. Credit facility is also provided t o those customers who buy goods in large quantity.

(IV) Personal services:- Retailers render personal services to the customers by providing expert advice regarding quality, features and usefulness of the items. They give suggestions considering the likes and dislikes of the customers.

(V)   Display of goods:- Retailers display different types of goods in a very systematic and attractive manner. It helps to attract the attention of the customers and also facilitates quick delivery of goods.

25. Explain any five qualities of a Salesperson engaged in personal selling. 5

Ans.:- Qualities of a Salesperson engaged in personal selling:-

(a)    Physical qualities:- A salesperson should  have a good appearance and an impressive personality. He should also have sound health.

(b)   Mental qualities:- A good salesperson should posses certain mental qualities like imagination, initiative, self-confidence, sharp memory, alertness etc. he should be able to understand the needs and preferences of customers.

(c)    Integrity of character:- A good  salesperson should posses the qualities of honesty and integrity. He is to gain the confidence of the customers. He should be able to understand their needs and guide them how to satisfy those needs.

(d)   Knowledge of the product and the company:- A salesperson should have full knowledge of the product and the company he is representing. He should be able to explain each and every aspect of the product i.e. its qualities, how to use it, what precautions to be taken etc.

(e)   Good behaviour:- A salesperson should be co-operative and courteous. Good behaviour enables one to win the confidence of the customers. He should not feel irritated if the buyer puts up many questions even if the questions are irrelevant.

26. Explain any three ‘Social-objectives’ of business. 6

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.

27. Explain the primary functions of a Commercial Bank. 6

Ans.:- The following are the Primary functions of a Commercial bank

a)      Accepting deposits:- The most important activity of a commercial bank is to mobilise deposits from the public. People who have surplus income and savings find it convenient to deposit the same with Banks. Depending upon the nature of deposits, funds deposited with Bank also earn interest. Thus, deposits with the bank grow along with the interest earned. 

b)      Grant of loans and advances:-

Loans:- A loan is granted for a specific time period. Generally commercial banks provide short-term loans. But term loans, i.e. loans for more than a year may also be granted. The borrower may be given the entire amount in lump sum or in instalments. Loans are generally granted against the security of certain assets.

Advances:- An advance is a credit facility provided by the bank to its customers. It differs from loan in the sense that loans may be granted for longer period, but advances are normally granted for a short period of time. Further the purpose of granting advances is to meet the day-to-day requirements of business.

28. State any six advantages of a ‘Joint-Stock Company’. 6

Ans.:- The following are the advantages of a ‘Joint-Stock Company’:-

1.       Limited Liability:- Shareholders of a company are liable only to the extent of the face value of shares held by them.

2.       Large Financial Resources:- Company form of ownership enables the collection of huge financial resources. The capital of a company is divided into shares of small denominations so that people with small means can also buy the shares of a company.

3.       Continuity:- A company enjoys uninterrupted business life. As a body corporate, it will continue to exist even if all of its members die or desert it.

4.       Transferability of shares:- The shares of a public limited company can be freely transferred by the members without the consent of other members.

5.       Diffused Risk:-  The risk of loss in a company is spread over a large number of members.

6.       Social Benefits:- The company organization helps to mobilize savings of the community and invest them in industry.

29. State any six functions of an entrepreneur. 6

Ans.:- Some of the major functions of an entrepreneur are:-

1)      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.

2)      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.

3)      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’.

4)      Resourcing:- An entrepreneur needs various resources in terms of money, machine, material, and men to running the enterprise successfully. An essential function of an entrepreneur is to ensure the availability of all these resources.

5)      Setting up of the Enterprise:- For setting up an enterprise the entrepreneur will have to fulfil some legal formalities. He also tries to find out a suitable location, design the premises, install machinery and do many other things.

6)      Managing the enterprise:- One of the important functions of an entrepreneur is to run the enterprise. He has to manage men, material, finance and organize production of goods and services. He has to market each product and service, after ensuring appropriate returns/profits on the investment.

30. Identify and explain the ‘Right of Consumers’ that arise in case (a) and the right that is fulfilled in case (b). 6

(a) Rita purchased an ISI marked electric juicer for ` 3,000. After a few days it

started giving shocks. Rita approached the shop-keeper, who refused to entertain the complaint of Rita.

(b) A consumer association decided to publish a journal in the name of ‘Upbhokta Jagriti’ as part of their activities.

Ans.:-(a) Right of consumer which is arise is Bureau of Indian Standards Act, 1986.

(b) There is a nominal charged for filing a complaint. The complaint may be filed by the complainant or his/her authorised agent in person, or it may be sent by post. Five copies of the complaint are generally required to be filed along with the following information.

i) Name, description and address of the complainant.

ii) Name, description and address of the opposite party or parties, as the case may be,

iii) Facts relating to the complaint and when and where it arose,

iv) Documents, if any, in support of the allegations contained in the complaint (like cash memo, receipt, etc.)

v) The nature of relief which the complainant is seeking.


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