CBSE Class 11 – Business Studies Question Paper 2023  

 SECTION – A

Question 1:

Which of the following is a non-economic activity?

a. A factory owner producing school bags for sale in the market b. A person begging at a busy traffic intersection c. Services of a domestic help doing household chores at an employer’s house d. Services of a housewife doing household chores at home  

Question 2:

In ancient India, documents such as _______ and _______ were in use for carrying out transactions in which money passed from hand to hand.  

Answer: Hundi and Bill of Exchange

Question 3:

Match the columns:

(i) A person who lends his name and goodwill for the benefit of a partnership firm

(ii) A person who contributes capital but does not take part in the business of the firm 

(iii) A document containing terms and conditions of partnership

(iv) A partnership set up for a specific project

(A) Particular partnership

(B) Partnership deed

(C) Sleeping partner

(D) Nominal partner

 Answers:

(i) A person who lends his name and goodwill for the benefit of a partnership firm

–> (D) Nominal partner

(ii) A person who contributes capital but does not take part in the business of the firm

–> (C) Sleeping partner

(iii) A document containing terms and conditions of partnership

–> (B) Partnership deed

(iv) A partnership set up for a specific project

–> (A) Particular partnership

Therefore, the correct match is: (a) (i)-D, (ii)-C, (iii)-B, (iv)-A

4. Reserve Bank of India limited is a public enterprise. Identify this form of organizing public enterprises.

a. Statutory corporation

b. Departmental undertaking

c. Government company

d. Multi-national corporation

Correct Answer: a. Statutory corporation

5. A government company is any company in which the paid-up capital held by the government is not less than

a. 49%

b. 50%

c. 51%

d. 25%

Correct Answer: c. 51%

6. Centralized control in MNCs implies control exercised by

a. Branches

b. Subsidies

c. Headquarters

d. Parliament

Correct Answer: c. Headquarters

Question 7:

A person gets his stock of ₹50,000 insured for ₹70,000. A fire occurs & whole stock gets damaged. The insurance company will pay him only ₹50,000 not ₹70,000. Which principle is applied in this case?

a. Principle of contribution

b. Principle of subrogation

c. Principle of indemnity

d. Principle of insurable interest

Question 8:

C2C is best suited for dealing in goods for which there is no established market. True/False?

Answer: True

Question 9:

Social responsibility is

a. Same as legal responsibility

b. Narrower than legal responsibility

c. Broader than legal responsibility

d. None of these

10. Read the following statements: Assertion and Reason. Choose one of the correct alternatives given below

**Assertion (A):** The importance of business finance has increased tremendously these days

**Reason (R):** Goods are produced on large scale and capital-intensive techniques are used.

**Alternatives**

(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is True but Reason (R) is False
(d) Assertion (A) is False but Reason (R) is True

Correct Answer: (a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)

11. State the source of finance, suggested by Mr. Rajesh to finance working capital decision.

(a) Trade credit

(b) Public deposit

(c) Equity and Preference shares

(d) Retained earnings

Correct Answer: (a) Trade credit

12. State the source of finance which can give the benefit of tax saving

(a) Equity Shares

(b) Debentures

(c) Both (a) and (b)

(d) Neither (a) nor (b)

Correct Answer: (b) Debentures

13. Identify the fund needed for the day to day operations of business

(a) Working capital

(b) Trading capital

(c) Equity capital

(d) Debt capital

Correct Answer: (a) Working capital

14. It was set up in 1955 to promote, aid and foster the growth of small business units in India. It provides technology to SSIs and creates awareness on technological upgradation. 

a. Small industrial development bank of India (SIDBI)

b. National bank for agriculture and rural development(NABARD)

c. National small industries corporation (NSIC)

d. District industrial Centre’s(DICs)  

15. All small industries are highly labor-intensive. True/False

Answer: True

16. Patent is a

monopoly Temporary/permanent

Answer: Temporary

17. Bata is an example of

a. General stores

b. Mail order houses

c. Chain stores

d. Departmental stores

18. There are four tax slabs namely 5%, 12%, 18% and …………. for all goods and services.

Answer: 28%

19. Which of the following is not a part of export documents?

a. Commercial invoice

b. Certificate of origin

c. Bill of entry

d. Mate’s receipt

20. The document containing the guarantee of a bank to honor draft drawn on it by an exporter is

(a) Letter of hypothecation

(b) Letter of credit

(c) Bill of lading

(d) Bill of exchange

 

21. Kavita is a Chartered Accountant working in a Government firm and she gets ₹1,00,000 per month. She is planning to start her own practicing firm in the basement of her home, where she expects to earn ₹2,50,000 per month. She took advice of her friend, Surbhi, who is a leading importer and exporter of readymade garments, earning approx ₹7,00,000 per month. In context of the given case  

(i) Identify the type of economic activity that Surbhi is engaged in.

Answer: Surbhi is engaged in International Trade.

(ii) Will there be any change in type of economic activity of Kavita by shifting from Government job to self-employment?

Answer: Yes, there will be a change in Kavita’s economic activity. Currently, she is involved in employment (working for the government). By starting her own CA firm, she will be engaged in self-employment or business.

(iii) Which term is used for reward, which Kavita and Surbhi are presently earning and which Kavita expects to earn in her CA practice?  

Answer: The term used for the reward they are earning is Income.

22. Briefly discuss any three features of retained earnings as a source of business finance

OR

Discuss the various points of difference between Equity Shares and Preference Shares (Any 3)

Answer:

Three features of retained earnings as a source of business finance:

  1. Cost-free: Retained earnings do not involve any explicit cost like interest payments on debt or dividends on equity shares.
  2. Permanent source: Retained earnings are a permanent source of finance as they are not required to be repaid like loans or debentures.
  3. Improves financial health: Retained earnings strengthen the financial position of the company by increasing its reserves and reducing reliance on external sources of finance.

OR

Three differences between Equity Shares and Preference Shares:

  1. Risk: Equity shareholders bear higher risk compared to preference shareholders. In case of liquidation, equity shareholders are paid after preference shareholders and creditors.
  2. Dividend: Equity shareholders receive dividends at the discretion of the company’s board of directors, while preference shareholders have a fixed dividend rate.
  3. Voting Rights: Equity shareholders have voting rights in company matters, while preference shareholders generally do not have voting rights.

23. Identify the type of retailers in the following cases

1. This retailer provide various facilities and services to their Consumers such as restaurant, travel and information Bureau, telephone booth, restroom etc.  

Answer: Departmental Store

2. This form of retailer has network of various retail shops which centralized management and all the shops Deal in similar line of standardized and branded Consumer products

Answer: Chain Store

3. This is retailing is successful only when education is widespread

Answer: Mail Order Business

24. “International business is more than international trade.” Comment.

Answer:

The statement “International business is more than international trade” is true. Here’s why:

  • International trade primarily focuses on the exchange of goods and services across national borders. It involves activities like importing and exporting.

  • International business encompasses a broader spectrum of activities beyond just trade. It includes:

    • Foreign Direct Investment (FDI): Investing in businesses in other countries.
    • Licensing and Franchising: Granting permission to use intellectual property or business models in foreign markets.
    • Foreign Portfolio Investment: Investing in foreign securities like stocks and bonds.
    • International Management Contracts: Providing management services to foreign companies.

Therefore, international business encompasses all aspects of business activities that take place across national borders, whereas international trade is a subset of these activities.

OR

What is letter of credit? Why does an exporter need this document?

Answer:

  • Letter of Credit: A letter of credit is a document issued by a bank to another bank, guaranteeing the payment of a specific sum of money to a beneficiary (in this case, the exporter) upon the fulfillment of certain conditions.

  • Why Exporters Need it:

    • Assures Payment: It provides a guarantee to the exporter that they will receive payment for their goods once the agreed-upon conditions are met (e.g., shipment of goods, presentation of documents).
    • Reduces Risk: It mitigates the risk of non-payment from the importer, especially in international transactions where there may be uncertainties and distance between parties.
    • Facilitates Trade: It helps to build trust and facilitate international trade by providing a secure and reliable payment mechanism.

25. Explain the following features of business

(a) Dealing in goods and services on a regular basis

  • Explanation: Business involves the continuous and regular exchange of goods and services. It’s not a one-time activity but an ongoing process of buying, selling, and trading.

(b) Sale or exchange of goods and services

  • Explanation: The core function of any business is to engage in the sale or exchange of goods and services. This could involve manufacturing and selling products, providing services to customers, or acting as an intermediary in the exchange process.

OR

Explain the following industries

(a) Primary industry

  • Explanation: Primary industries are those that extract or harvest natural resources directly from the earth. Examples include agriculture (farming, fishing, forestry), mining, and quarrying.

(b) Secondary industry

  • Explanation: Secondary industries transform raw materials into finished goods. This involves manufacturing processes like converting iron ore into steel, wood into furniture, or textiles into clothing.

26. State any four limitations of Departmental undertaking

OR

State any four features of Global enterprises.

Answer:

Four limitations of Departmental undertaking:

  1. Lack of Flexibility: Departmental undertakings often suffer from bureaucratic procedures and rigid rules, making them less adaptable to changing market conditions.
  2. Political Interference: They can be susceptible to political interference, which can hinder efficient decision-making and operations.
  3. Inefficiency: Due to government control, departmental undertakings may lack the motivation to improve efficiency and profitability.
  4. Lack of Autonomy: Limited autonomy can hinder innovation and responsiveness to market demands.

OR

Four features of Global enterprises:

  1. Global Reach: They have operations and markets in multiple countries across the globe.
  2. International Workforce: They employ a diverse workforce with employees from different nationalities.
  3. Global Supply Chain: They source materials and components from various countries and have a global network for distribution.
  4. Global Brand Recognition: They often have strong brand recognition and a global customer base.

27. Mr. Mohan wants to buy a new sofa set for his home, but he did not have enough space to keep it. He planned to sell the old sofa through OLX, so that he could get some surplus money and space for 1 the new sofa set. He got a very good response and out of many buyers, he chose the buyers 2 who gave him the best price.  

 

i) Identify and explain the type of e-commerce referred to in the above case.

Answer:

The type of e-commerce referred to in the case is C2C (Consumer-to-Consumer) e-commerce.

Explanation:

C2C e-commerce involves transactions between individual consumers. In this case, Mr. Mohan, an individual consumer, is selling his old sofa to another individual consumer through an online platform like OLX.

ii) Explain any two benefits of e-business.

Answer:

  1. Wider Reach: E-business allows businesses to reach a global audience beyond geographical limitations. They can sell their products and services to customers worldwide through online platforms.
  2. Reduced Costs: E-business can help reduce operational costs by eliminating the need for physical stores, reducing inventory, and automating processes.

28. Explain the various elements of business ethics (Any four)

Answer:

  1. Honesty and Integrity: Conducting business with honesty and integrity, upholding ethical standards in all dealings.
  2. Social Responsibility: Considering the impact of business activities on society and the environment, and taking steps to minimize negative impacts.
  3. Fair Competition: Engaging in fair competition with other businesses, avoiding unfair practices like price fixing and anti-competitive behavior.
  4. Customer Focus: Prioritizing customer satisfaction and building long-term relationships with customers through ethical practices.

 

29. 1. Explain any two terms in brief:

  • A. Perpetual Succession: This concept implies that a company or organization can continue to exist even after the death or retirement of its owners or members. Unlike partnerships where the death of a partner can dissolve the firm, companies can continue operations indefinitely due to their separate legal entity status.

  • B. Common Seal: A common seal is an official seal used by a company to authenticate legal documents and contracts. It acts as a symbol of the company’s authority and is used to signify official approval of documents.

2. Differentiate Private Company and Public Company on any three basis.

  • Number of Shareholders: A private company has a limited number of shareholders (typically not more than 200), while a public company can have any number of shareholders.
  • Public Issue: A private company cannot offer its shares to the general public, whereas a public company can issue shares to the public through an Initial Public Offering (IPO).
  • Listing on Stock Exchange: Shares of a private company are not listed on any stock exchange, while shares of a public company can be listed on stock exchanges.

OR

1. Explain any two terms in brief:

  • A. Partnership Deed: A partnership deed is a legal document that outlines the terms and conditions of a partnership agreement. It covers aspects like profit-sharing ratios, responsibilities of partners, dispute resolution mechanisms, and other important details.    

  • B. Nominal Partner: A nominal partner is a person who lends their name and goodwill to a partnership firm but does not actively participate in the business and does not contribute any capital. They are primarily responsible for enhancing the firm’s reputation and credibility.

2. Differentiate between Joint Hindu Family Business and Partnership on any three basis

  • Ownership: In a Joint Hindu Family Business, ownership is inherited by male members of the family, while in a partnership, ownership is based on the agreement between the partners.
  • Liability: In a Joint Hindu Family Business, all members are jointly and severally liable for the debts of the business. In a partnership, the liability of partners can be limited or unlimited depending on the type of partnership.
  • Legal Entity: A Joint Hindu Family Business is not a separate legal entity. The business and the family are considered one. A partnership, on the other hand, is a separate legal entity from its partners.

30. Discuss the following principles of contract of Insurance

(i) Principle of Indemnity (ii) Principle of Subrogation (iii) Principle of Contribution  

 

  • Principle of Indemnity: This principle states that the insured should not profit from an insurance claim. The insurer will compensate the insured for the actual loss incurred, up to the insured amount.
  • Principle of Subrogation: This principle states that once the insurance company has compensated the insured for a loss, the insurance company acquires the right to pursue any claims against a third party who may be responsible for the loss.
  • Principle of Contribution: When multiple insurance policies cover the same risk, this principle states that the insured can only recover the actual loss from the insurers, and each insurer is liable to contribute to the loss in proportion to their share of the total insurance coverage.

OR

Describe the followings in brief:

(i) Life insurance (ii) Fire insurance (iii) Marine insurance

  • Life Insurance: This type of insurance provides financial protection to the insured’s beneficiaries in the event of the insured’s death. It can also provide coverage for critical illnesses, accidents, and other life events.
  • Fire Insurance: This insurance covers losses caused by fire, such as damage to property and belongings.
  • Marine Insurance: This type of insurance covers risks associated with the transportation of goods by sea, such as damage, loss, or theft during shipment.