Sample Paper

Subject: Business Studies

Grade: XI
Max Marks: 80
Duration: 3 Hours
Set: A

General Instructions
1. This question paper contains 34 questions.

2. Marks are indicated against each question.

3. Answers should be brief and to the point.

4. Answers to the questions carrying 3 marks may be from 50 to 75 words.

5. Answers to the questions carrying 4 marks may be about 150 words.

6. Answers to the questions carrying 6 marks may be about 200 words.

7. Attempt all parts of the questions together.

Section A – Multiple Choice Questions (1 Mark each)

1. The funds required for acquiring land, building, and machinery is an example of: a) Fixed
capital requirement b) Working capital requirement c) Trade credit d) Retained earnings

2. Which form of business organisation is formed by registration under the Indian

Partnership Act, 1932? a) Company b) Joint Hindu Family Business c) Partnership d)
Cooperative Society

3. Where is the headquarters of IMF located? a) New York b) Geneva c) Washington DC d)

Paris

4. Mining and oil drilling come under which type of industry? a) Genetic b) Extractive c)
Manufacturing d) Tertiary

5. WTO stands for: a) World Trade Organisation b) World Tourism Organisation c) Wealth
Trade Organisation d) None of these

6. Which of the following is NOT a source of owner’s funds? a) Preference shares b)

Retained earnings c) Equity shares d) Debentures

7. Which principle of insurance allows the insurer to step into the shoes of the insured after
compensating for the loss, to recover the claim from the third party responsible?
a) Contribution b) Subrogation c) Proximate Cause d) Mitigation
8. The ownership in a cooperative society is based on the principle of:

a) One share one vote b) One man one vote c) Multiple votes d) No voting rights

9. LIC of India is an example of: a) Statutory Corporation b) Government Company c)

Departmental Undertaking d) Cooperative Society

10. Which form of business organisation enjoys separate legal entity and limited liability? a)
Sole Proprietorship b) Company c) Partnership d) Cooperative Society

11. Which of the following is a limitation of e-business? a) Global reach b) Low cost of
operations c) Lack of personal touch d) Easy accessibility

12. Which of the following is a long-term source of finance?

a) Commercial Paper b) Trade Credit c) Equity Capital d) Bill Discounting

13. Which principle of insurance ensures the insured is put back in the same financial
position as before loss? a) Contribution b) Subrogation c) Indemnity d) Utmost good faith

14. Capital is not an essential element in: a) Employment b) Profession c) Business d) None
of these

15. Public sector enterprises are owned by: a) Joint Hindu Family b) Government c) Foreign
Companies d) Private Entrepreneurs

16. Canara Bank is an example of: a) Mixed Sector b) Public Sector c) Private Sector d) None
of these

17. Which source of finance does not require fixed commitment of repayment?
a) Bank Loan b) Debentures c) Equity Shares d) Public Deposits

18. A firm in India imports raw material from USA and sells it to Bangladesh. This is an
example of: a) Export b) Import c) Entrepot d) Wholesale trade

19. The economic activity in which specialised knowledge is required is: a) Profession b)
Business c) Employment d) None of these

20. According to which principle of insurance must the insured try to minimize the loss
after the incident occurs?
a) Contribution b) Mitigation of Loss c) Subrogation d) Utmost Good Faith

Section B – Short Answer Questions (3 Marks each)

21. In a small town, a family has been running a traditional jewellery shop for over 80 years.
The business is controlled by the eldest male member who takes all major decisions. Other
family members assist him in day-to-day work. The business continues smoothly even after
the death of senior members, as the next eldest automatically takes charge. There is full
trust and cooperation among family members, and they work without expecting fixed
salaries.
Questions:
a) Identify the form of business organisation described above.
b) State any three merits of this form of business.

22. A farmer cooperative society collects wheat from different villages after harvest season.
Since wheat cannot be sold immediately in the market, the society stores it in large storage
facilities. Later, they release the stock gradually to wholesalers and retailers, ensuring a
regular supply and better prices.

Question:
a) Identify the facility of trade being used here.
b) Explain any two points of importance of this facility in trade.

23. Distinguish between life insurance and fire insurance (any three points).

24. A group of four friends decided to start a business of customized furniture. They
registered their company with the Registrar of Companies. The company’s Articles of
Association clearly restricted the transfer of shares, and they were allowed to start
operations even though they had only two members. They also enjoyed exemption from
preparing a prospectus for raising funds.

Question:
a) Identify the type of company being described.
b) State any three privileges this company enjoys.

Section C – Medium Answer Questions (4 Marks each)

25. 'SmartTech Ltd.' wants to raise funds for 15 years from the public. It also requires funds
for working capital. Suggest suitable sources of finance for both and give two features of
each.

26. Priya obtained fire insurance for her shop. A fire broke out and destroyed goods worth
Rs 5 lakhs. She claims the entire insured amount of Rs 10 lakhs. Will the company accept
her claim? State reasons. Identify principles of insurance involved.

27. Identify primary, agency, and general utility functions of a bank in the following case:
Ravi maintains a savings account, takes a home loan, gets his drafts issued, and uses locker
facility.

28. Arjun runs a garment shop in the local market. He manages everything manually – from
keeping stock registers, sending bills through hand-written receipts, and dealing only in
cash. His friend Meera, however, runs an online store where she sells clothes through an
app. Customers place orders online, pay via UPI, and track delivery status in real-time.

Questions:
a) Identify the type of business each is running.
b) Differentiate between these type of business on any 4 points, using the case above.
29. Flipzon, an Indian e-commerce company, connects buyers and sellers through its online
platform. During the festive season, it offers huge discounts, free delivery, and easy return
options. Customers can shop anytime, from anywhere, and pay through multiple options
like cards, wallets, and COD.

Questions:
a) Define E-commerce.
b) Explain any four ways in which Flipzon shows the importance of E-commerce in modern
business.

30. The Indian Railways is one of the largest public sector enterprises in the world. It is fully
owned, managed, and controlled by the Government of India. The revenue earned goes
directly to the government treasury. It provides affordable transport to millions of
passengers daily but also suffers from problems like delays, heavy losses, and lack of
flexibility in decision-making.

Questions:
a) Identify the form of public sector enterprise described.
b) State the meaning of this form.
c) Mention any two merits and two limitations of it.

Section D – Long Answer Questions (6 Marks each)

31The Government of India established a business organisation through a special Act of
Parliament. This Act defined its powers, functions, and rules of working. The organisation
has its own legal identity, independent of the government, and is fully owned by the State. It
can enter into contracts, own property, and sue or be sued in its own name.

However, though it enjoys operational independence and flexibility in decision-making,

sometimes it faces political interference in appointments and functioning. At the same
time, it is considered more reliable by the public as it is backed by the government.
Examples of such organisations in India include LIC, Air India (earlier), and ONGC.

Questions:
a) Identify the form of public enterprise described.
b) State any three features of this form of organisation.

32. Explain the meaning of government company. How is it different from statutory
corporation? State any three merits of government companies.

33. What are Public deposit? State features of public deposit as a source of finance.

34. A company based in the USA set up its manufacturing units in India, China, and Brazil to
produce smartphones at a lower cost. The company uses advanced technology, hires skilled
as well as semi-skilled local labour, and markets its products globally under one brand
name. It earns huge profits by selling in both developing and developed countries. However,
some critics argue that such companies dominate local markets, transfer limited technology,
and exploit natural resources of host nations.

Questions:
a) Identify the type of business organisation described above. (1 mark)
b) State any three features of this type of organisation. (2 marks)
c) Explain two merits and two limitations of such organisations. (3 marks)