ELEMENTS OF BUSINESS (154)
CLASS X (2024-25)
SAMPLE QUESTION PAPER
TIME: 3 HOURS
M.M. – 70

Section A (1 mark each)

  1. Name the method of communication which is used where face-to-face communication is difficult and can be delivered to the receiver through post offices or private couriers?
    A. Email
    B. Telephone
    C. Letter
    D. Video conferencingAnswer: C. Letter
    Explanation: Letters are a form of written communication that can be delivered through postal services or private couriers. This method is typically used when face-to-face communication isn’t possible.
  2. Out of the following, which source of finance is included in the category of owner’s funds?
    A. Debentures
    B. Equity shares
    C. Bank Loan
    D. Public DepositsAnswer: B. Equity shares
    Explanation: Equity shares represent ownership in a company and are considered the owner’s funds. They involve the risk of ownership and entitle the holder to a share in the company’s profits.
  3. Under which system, the seller has the right to repossess the goods in case of default in payment?
    A. Hire purchase
    B. Credit sale
    C. Installment payment
    D. Cash saleAnswer: A. Hire purchase
    Explanation: In a hire purchase agreement, the seller retains the right to repossess the goods if the buyer fails to make the necessary payments.
  4. Identify the mode of receiving payment which is not appropriate in mail order business?
    A. Full advance payment
    B. Value payable post
    C. Delivery through a bank
    D. Payment on credit termsAnswer: D. Payment on credit terms
    Explanation: Mail order businesses typically require advance payments or immediate payment methods due to the distance involved and the risk of default, so credit terms are generally not suitable.
  5. _________ type of large-scale retail trade offers a large variety of goods and satisfies all the needs of customers under one roof.
    A. Discount store
    B. Departmental store
    C. Multiple shops
    D. Convenience storesAnswer: B. Departmental store
    Explanation: Departmental stores provide a wide range of goods across various categories under one roof, catering to the diverse needs of customers.
  6. Read the following statements carefully:
    Statement I: In auction sale, the goods are displayed, and there is a reserve price below which goods are not to be sold.
    Statement II: Goods delivered to the buyer ‘on approval’ basis are always paid for in advance.
    In light of the given statements, choose the correct alternative from the following:
    A. Both the statements are true.
    B. Both the statements are false.
    C. Statement I is true, Statement II is false.
    D. Statement II is true, Statement I is false.Answer: C. Statement I is true, Statement II is false.
    Explanation: In an auction sale, there is usually a reserve price, and goods are only sold if the price is met. However, in the ‘on approval’ system, payment is not made in advance; the buyer pays only if they approve the goods.
  7. _________ is the subject matter of communication which may contain facts, ideas, feelings, or thoughts.
    A. Feedback
    B. Sender
    C. Receiver
    D. MessageAnswer: D. Message
    Explanation: A message is the core content of communication, which may include facts, ideas, feelings, or thoughts being conveyed from the sender to the receiver.OR_________ is not an email service provider.
    A. Gmail
    B. Zoho
    C. Outlook
    D. BingAnswer: D. Bing
    Explanation: Bing is a search engine, while Gmail, Zoho, and Outlook are all email service providers.
  8. _________ is the type of retail trade in which coin-operated machines are used for selling products like hot beverages, tickets, milk, soft drinks, chocolates, etc.
    A. Departmental store
    B. Multiple shops
    C. Automated vending machines
    D. Mail order housesAnswer: C. Automated vending machines
    Explanation: Automated vending machines use coin-operated systems to sell a variety of products, such as beverages, snacks, and other items.
  9. Choose the incorrect statement about departmental stores.
    A. They cater to the needs of rich people who care more for services rather than prices.
    B. There is no uniformity in decoration, and each store is different from other departmental stores.
    C. They do not provide credit facilities.
    D. They make extensive use of advertising, window displays to people.Answer: B. There is no uniformity in decoration, and each store is different from other departmental stores.
    Explanation: Departmental stores usually follow a uniform decoration and layout to maintain consistency across different branches.
  10. Trading of goods through mail order houses is not suitable for:
    A. Goods that can be graded and standardized
    B. Goods that can be easily transported at low cost
    C. Goods that have ready demand in the market
    D. Goods that are perishable and bulky in nature

Answer: D. Goods that are perishable and bulky in nature
Explanation: Perishable goods and bulky items are difficult to handle through mail order business due to the challenges of preservation and high shipping costs.

  1. (A) _________ is the portion of net earnings which may be reserved in the business for use in the future.
    A. Interest
    B. Retained Earnings
    C. Dividend
    D. Debit balance of profit & loss account

Answer: B. Retained Earnings
Explanation: Retained earnings are the profits that a company retains for reinvestment in the business or for future use, rather than distributing them as dividends.

OR

_________ is the source of finance which is issued by the company and its holders are entitled to receive interest but do not have the right to vote.
A. Debentures
B. Equity shares
C. Bank loan
D. Trade credit

Answer: A. Debentures
Explanation: Debentures are debt instruments issued by a company that pay interest but do not give holders voting rights.

  1. Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below:
    Assertion (A): Board of Directors of a company exercise full control over the business.
    Reason (R): Board of Directors are the owners of the company.
    A. Assertion (A) is true but Reason (R) is false.
    B. Assertion (A) is false but Reason (R) is true.
    C. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion
    D. Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion.

Answer: A. Assertion (A) is true but Reason (R) is false.
Explanation: The Board of Directors exercises control over the business, but they are not the owners; the shareholders are the owners of the company.

  1. _________ is the method of communicating a message from the sender to the receiver through gestures, postures, and facial expressions.
    A. Verbal communication
    B. Written communication
    C. Non-verbal communication
    D. Visual communication

Answer: C. Non-verbal communication
Explanation: Non-verbal communication includes facial expressions, gestures, body language, and other forms of communication without words.

  1. Which of the following is an example of direct selling?
    A. Mail order
    B. Telemarketing
    C. Online sales
    D. Door-to-door selling

Answer: D. Door-to-door selling
Explanation: Door-to-door selling involves a salesperson visiting customers directly at their homes to sell goods or services.

  1. A type of insurance in which the policyholder is given the benefit of an annuity for a fixed period or during the entire life of the insured is known as:
    A. Endowment policy
    B. Life insurance policy
    C. Pension plan
    D. Term insurance policy

Answer: C. Pension plan
Explanation: A pension plan is a type of life insurance that provides a regular income to the policyholder during retirement or for a fixed period.

  1. Which of the following is an example of internal communication?
    A. Newspaper advertisement
    B. Notice board
    C. Advertisement on TV
    D. Social media posts

Answer: B. Notice board
Explanation: A notice board is used for internal communication within an organization to convey information to employees or members.

  1. Which of the following is the best source of finance for a long-term business expansion?
    A. Trade credit
    B. Retained earnings
    C. Debentures
    D. Bank overdraft

Answer: B. Retained earnings
Explanation: Retained earnings are the most suitable source for long-term business expansion as they do not require external approval or incur interest costs.

  1. Which of the following is an example of an indirect tax?
    A. Income tax
    B. Corporation tax
    C. Sales tax
    D. Wealth tax

Answer: C. Sales tax
Explanation: Sales tax is an indirect tax as it is levied on the sale of goods and services and passed on to the consumer by the seller.

Section B (3 marks each)

19. Achintya India Life Insurance Co. Ltd. is a Life insurance company offering a complete range of competitive insurance plans to its customers with prompt and quality customer services. Hira Asset Management Company Pvt. Ltd. is a professional Mutual fund house which manages various mutual fund schemes.
(I) Identify the type of companies referred to in the above case study.
(II) Differentiate between the types of companies identified in part (I) on any two basis.

Answer: (I) The companies are:

  • Achintya India Life Insurance Co. Ltd. is a Life Insurance Company.
  • Hira Asset Management Company Pvt. Ltd. is a Mutual Fund Company.

(II) Differences between Life Insurance Company and Mutual Fund Company:

  1. Purpose:
    • A Life Insurance Company provides insurance policies to individuals for financial protection in case of unforeseen events (e.g., death, illness).
    • A Mutual Fund Company manages collective investments in stocks, bonds, or other assets, pooling funds from various investors.
  2. Risk:
    • In Life Insurance, the risk is on the insurance company, which must pay out to the policyholder’s beneficiaries.
    • In Mutual Funds, the investors bear the risk, as the value of their investment depends on market performance.

20. Kaushal has invested ₹ 1,00,000 in the securities of Kinjal Enterprises Ltd. Due to this investment, he is entitled to the right to vote and to participate in the affairs of the company.
(I) Identify the source of finance that Kinjal Enterprises Ltd has raised through the issue of securities to Kaushal.
(II) State any two disadvantages of using the source of finance identified in part (I).

Answer: (I) The source of finance is Equity Shares.
Equity shares represent ownership in the company and entitle the investor (Kaushal) to voting rights and participation in the company’s decisions.

(II) Disadvantages of Equity Shares:

  1. Dilution of Control:
    When a company issues more equity shares, the control of existing shareholders is diluted as they own a smaller percentage of the company.
  2. Dividend Uncertainty:
    There is no guaranteed dividend for equity shareholders. The company’s profits may not always allow for dividends to be paid.

21. (A) Define channels of communication. Name any two types of channels of communication.
OR
21. (B) Give the meaning of voicemail system in business. State any two advantages of voicemail.

Answer: (A) Channels of Communication refer to the mediums through which information is transmitted between the sender and receiver. These can be verbal or non-verbal methods of communication, including face-to-face conversations, emails, telephone calls, etc.
Two types of communication channels:

  1. Formal Channels: Official ways of communication such as memos, reports, and business meetings.
  2. Informal Channels: Unofficial channels such as gossip or casual conversations between colleagues.

OR

(B) Voicemail system is a digital communication system that allows businesses to leave voice messages for individuals when they are unavailable.
Two advantages of voicemail:

  1. Time Convenience: Voicemail allows recipients to listen to messages at their convenience, which helps avoid interruptions.
  2. Record Keeping: Messages left via voicemail are recorded, allowing the receiver to listen and review the message later, providing an effective method of documentation.

22. Urban Fresh is a popular grocery store in India, which is a one-stop shop for all grocery needs. It offers products like fresh fruits, vegetables, dairy products, packaged foods, and personal care items to the whole country through its convenient locations.
(I) Identify the type of large-scale retail trade referred to in the above case.
(II) State any two features of the type of retail trade identified in part (I).

Answer: (I) The type of retail trade is a Supermarket.
Supermarkets are large, self-service retail stores that offer a variety of food and household products, often under one roof.

(II) Features of Supermarkets:

  1. Wide Range of Products: Supermarkets sell a variety of goods like groceries, fresh produce, dairy, and personal care items.
  2. Self-service: Customers can freely select the items they want to purchase and proceed to checkout, making the process faster and more convenient.

23. Ms. Eshita Varshney is the finance manager of Hexagon Ltd, a toy manufacturing company. The company requires ₹ 50 crore to expand its operations in the states of Gujarat and Rajasthan. The Board of directors asked Ms. Eshita to advise upon the arrangement of funds. She has two options: issue of equity shares or debentures. After a thorough analysis of facts, she decides to go in favor of issuing debentures.
Give four reasons that Ms. Eshita Varshney may have given to convince the directors to opt for debentures.

Answer: Ms. Eshita may have given the following reasons for opting for debentures:

  1. Fixed Interest: Debentures pay a fixed interest, which is cheaper than the dividend on equity shares, making them a cost-effective source of finance.
  2. No Dilution of Control: Unlike equity shares, debentures do not carry voting rights, so the control of the company is not diluted.
  3. Tax Deductibility: Interest paid on debentures is a tax-deductible expense, which reduces the overall tax burden of the company.
  4. No Profit Sharing: Debenture holders do not have a share in the company’s profits (unlike equity shareholders), which allows the company to retain more earnings.

24. (A) Explain in brief the following modes of purchase:
(I) Purchase by sample
(II) Purchase by inspection
OR
24. (B) Define purchase and sale. Differentiate between cash transaction and credit transaction.

Answer: (A)
(I) Purchase by Sample: In this method, a buyer purchases goods based on a sample provided by the seller. The actual goods supplied are expected to match the quality of the sample.

(II) Purchase by Inspection: This method involves the buyer inspecting the goods before making the purchase to ensure the quality and suitability of the goods.

OR

(B)
Purchase: It refers to the acquisition of goods or services by paying a certain amount to the seller.
Sale: It is the transfer of ownership of goods or services to the buyer in exchange for a specified amount.

Difference between Cash and Credit Transaction:

  1. Cash Transaction: Payment is made immediately in exchange for goods/services.
  2. Credit Transaction: Payment is deferred and made at a later date as per the credit terms.

25. Perfect Look is a company manufacturing electric shavers and is looking out for personal selling as the means to promote its product. It seeks to hire effective salespersons for this purpose. List any four qualities that a good salesperson should possess.

Answer: Four qualities of a good salesperson:

  1. Communication Skills: A good salesperson should be able to communicate effectively with customers, explaining the product’s benefits and features.
  2. Patience: Salespersons need to be patient when addressing customer queries and concerns, building trust over time.
  3. Product Knowledge: A salesperson must have a deep understanding of the products they are selling, so they can provide accurate and useful information.
  4. Persuasiveness: A good salesperson must be persuasive enough to convince potential customers to make a purchase.

26. Deepika Rastogi, a senior Human Resource manager of Zooshi Pharmaceuticals Ltd working in Gurugram, was assigned the task of recruiting two software developers for the company. She placed the advertisement on the company’s website and received an application from Mr. Jasprit, a software developer working in Canada. She arranged the interview with Mr. Jasprit through a method that enabled her to see and talk to each other by sitting at different locations.
(I) Identify and explain the method of communication used by Ms. Deepika Rastogi.
(II) Give any two benefits of using the method of communication identified in part (I).

Answer: (I) The method used is Video Conferencing.
Video conferencing is a form of communication that allows individuals to conduct a face-to-face meeting via the internet, even when they are in different locations.

(II) Benefits of Video Conferencing:

  1. Time and Cost Efficiency: Saves both time and travel costs as individuals do not need to be physically present in the same location.
  2. Visual Interaction: Allows the interviewer to evaluate the candidate’s body language and non-verbal cues, which are important in the interview process.

27. (A) Write short notes on:
(I) Horizontal communication
(II) Vertical communication
OR
(B) (I) What is meant by External communication? Name any two types of External communication.
(II) Name any three key elements of communication.

Answer: (A)
(I) Horizontal Communication:
Horizontal communication refers to the exchange of information between individuals or groups of the same level in an organization. It facilitates coordination and collaboration.

(II) Vertical Communication:
Vertical communication involves the flow of information up and down the organizational hierarchy. It includes communication from higher levels to lower levels (top-down) or from lower levels to higher levels (bottom-up).

OR

(B)
(I) External Communication:
External communication refers to the exchange of information between an organization and external entities such as customers, suppliers, or the general public.
Two types of External Communication:

  1. Advertising: Promoting products and services to the public.
  2. Public Relations: Managing the organization’s image and relationships with the public.

(II) Three key elements of communication:

  1. Sender: The person who initiates the message.
  2. Message: The content being communicated.
  3. Receiver: The person or group to whom the message is directed.

28. Radha, Basudha, and Medha were friends working in a fast-food outlet. One day, while having lunch, Radha informed that she wanted to buy a car. Basudha suggested buying a car on the hire purchase system of payment, whereas Medha suggested using the installment system. Radha did not have a clear understanding of how the two systems work.
(I) Explain the meaning of hire purchase and installment system of payment to Radha.
(II) Differentiate between these two systems by giving four points.

Answer: (I)

  • Hire Purchase: It is a system where the buyer takes possession of the goods immediately but pays in installments over time. Ownership of the goods remains with the seller until the final installment is paid.
  • Installment System: In this system, the buyer receives the goods immediately and agrees to pay the price in a fixed number of payments over time. Ownership is transferred to the buyer as soon as the goods are delivered.

(II) Differences between Hire Purchase and Installment System:

  1. Ownership: In Hire Purchase, ownership remains with the seller until the last installment is paid, while in Installment system, ownership is transferred at the time of delivery.
  2. Down Payment: Hire Purchase usually requires a higher down payment compared to the Installment system, which might not require any.
  3. Interest Charges: Installment Systems generally have lower interest charges compared to Hire Purchase, where the cost may include more interest.
  4. Flexibility: Hire Purchase may offer more flexible terms for the buyer than the Installment system.

29. Mr. Harsh Malhotra has recently set up a business organization which is an artificial person and is created by law through a proper legal procedure. Identify the form of business organization and explain any five of its features.

Answer: The form of business organization is a Company.

Five features of a company:

  1. Separate Legal Entity: A company is considered a separate legal entity, distinct from its owners.
  2. Limited Liability: Shareholders have limited liability, meaning they are only liable to the extent of their shareholding in the company.
  3. Perpetual Succession: The company continues to exist even if its members change or leave.
  4. Transferable Shares: Shares of the company can be transferred from one person to another, making it easy for shareholders to exit or enter.
  5. Separate Ownership and Management: The owners (shareholders) are different from the managers who run the day-to-day operations.

30. (A) (I) Define television advertising. Give any two advantages.
(II) Give any three points of significance of advertising.
OR
(I) Define sales promotion.
(II) State any five tools used for sales promotion.

Answer: (A)
(I) Television Advertising refers to promoting products or services via television broadcasts. It uses visuals, sound, and motion to convey a message to the target audience.
Two advantages of Television Advertising:

  1. Wide Reach: Television reaches a vast audience, making it effective for mass marketing.
  2. Visual Appeal: The use of sound and visuals makes television ads more engaging and memorable.

(II) Significance of Advertising:

  1. Informs Customers: Advertising provides information about products, services, and brands.
  2. Persuades Consumers: It aims to convince customers to purchase a product.
  3. Brand Awareness: It helps in creating and maintaining brand awareness.

OR

(I) Sales Promotion refers to a range of marketing activities designed to increase the demand for a product or service through incentives and offers.
(II) Five tools used for sales promotion:

  1. Discounts: Temporary price reductions to encourage immediate purchase.
  2. Coupons: Offers that provide price reductions on future purchases.
  3. Samples: Free products given to customers to encourage trial.
  4. Contests: Competitions with rewards to engage customers.
  5. Point-of-purchase Displays: Special displays to attract attention in retail settings.