Syjc Oc Objectives

S.Y.J.C. – O.C.
INDEX
Sr. No. Chapter Name Pg. Nos.
1. FORMS OF BUSINESS ORGANIZATIONS 1 – 26
2. BUSINESS SERVICES 27 – 48
3. EMERGING MODES OF BUSINESS 49 – 54
4. SOCIAL RESPONSIBILITY OF BUSINESS 55 – 65
5. CONSUMER PROTECTION 66 – 73
6. PRINCIPLES OF MANAGEMENT 74 – 79
7. FUNCTIONS OF MANAGEMENT 80 – 89
8. ENTREPRENEURSHIP DEVELOPMENT 90 – 93
9. 94 – 113
BOARD QUESTION PAPERS
J. K. SHAH CLASSES S.Y.J.C – Organization Of Commerce
CHAPTER – 1
FORMS OF BUSINESS ORGANISATIONS
Q.1. DISTINGUISH BETWEEN
1. Sole Trading Concern and Partnership Firm

Sr. Basis of Sole Trading Concern Partnership Firm
No. Difference
1 Meaning Owned and controlled by only In this form of business
one person organization two or more
persons come together to
undertake a business and share
profits.
2 Formation It can be formed at any time It can be formed by an
when proprietor decides agreement between two more
competent persons.
3 Ownership Sole trading concern has only Minimum number of members
one owner are 2 and maximum 10 in
banking and 20 in other firm.
4 Registration Registration is not necessary Registration is not necessary,
but it is useful. (compulsory in
Maharashtra)
5 Secrecy A sole trading concern ensures Secrecy is shared by the partners
maximum secrecy
6 Managerial The entire burden of All partners contribute these
management lies on owner. skills so there is division of work
and expertise.
7 Capital Because of only one owner, Contribution of all partner’s
amount of capital is very small. capital increases.
8 Profit & Loss A Proprietor is himself receiver Profit is shared by partners as
all the profit or loss per their agreement.
9 Disputes No question of disputes as it is There are chances of disputes
a one man show among the partners
10 Flexibility A sole trading concern is A partnership firm is less
flexible flexible
2. Proprietorship and Joint Hindu Family Firm

Sr.No. Basis of Proprietorship Joint Hindu Family Firm
Difference
1 Meaning It is a form of commercial It is a form of commercial
organization which is owned organization. The ancestral
and managed by a single business is conducted by the
person family members of a Joint
Hindu Family
2 Membership There can not be more than There is no maximum limit on
one owner membership
: 1 : Forms of Business Organizations

3 Ownership The business assets and All the family members are
properties are owned by the joint owners of business
proprietors. properties
4 Liability The liability of sole trader is Karta’s liability is unlimited.
unlimited Co-parcener’s liability is
limited.
5. Financial The financial resources are The funds are more than that
Resources available of a proprietor.
6. Stability It lacks stability since the It is comparatively more stable
existence of sole trading since after the death of Karta,
concern depends upon the the next senior family member
survival of the sole trader takes over as Karta and
continues business activities.
7. Profit and All the profit of the The profit and losses are
losses concerned belong to the sole shared by all the co-parceners.
trader and all losses are to be
borne by him.
8. Management Sole trading concern is Joint Hindu Family business is
managed by sole trader managed by Karta.
himself
3. Partnership Firm & Joint Hindu Family Firm

Sr. Basis of Partnership firm Joint Hindu Family Firm
No. Difference
1. Meaning When two or more person When joint Hindu family
come together to undertake conducts business, inherited by
some business activity and it as per Hindu law, it is called a
agree to share that profit, it is Joint Hindu family firm.
called a partnership firm.
2 Creation Partnership firm emerges out Joint Hindu family firm is
of contract between the created by the operation of
partners Hindu Law.
3 Membership There can be a minimum of 2 There is no limit on the number
partners and a maximum of of members since the
10 partners in banking membership keeps on changing
business and 20 in non- depending upon the birth and
banking business death in the family
4 Management All partners in partnership Karta is the key manager of
firm have equal managerial business who may be assisted by
rights. The business is jointly co-parcenersto a limited extent.
managed by all the partners.
5 Minor A minor member can be A male minor become a member
Members admitted to the benefits of merely by his birth
partnership with the consent
of all the partners
6 Regulating law It is governed by the Indian It is governed by the Hindu
partnership Act, 1932 Law.

7 Liability of The liability of all the partners Only Karta’s liability is

Members is unlimited unlimited co-parcener’s liability
is limited.
8 Capital Contribution is more Contribution is comparatively
less
4. Partnership Firm & Joint Stock Company

Sr.No. Point of Partnership firm Joint stock company
Distinction
1 Meaning When two or more persons join It is voluntary association of
hands to undertake a business individuals for profit having
activity, it is called a capital divided into
partnership firm. transferable shares, the
ownership which is the
condition of membership
2 Membership The minimum number of The minimum of number of
partners are 2, the maximum members are 2 in private
for banking business is 10, limited company and a
while for non banking business, maximum of 50. In a public
it is 20 limited company, minimum
number of members are 7
and there is no maximum
limit.
3 Formation The formation is comparatively The formation involves
simple and less costly. Only a many complicated legal
partnership deed is required to formalities. Therefore it is
be prepared. Even registration tedious, costly legal
is option (Except in formalities. Therefore it is
Maharashtra) tremendously time
consuming.
4 Liability The liability of partners is The liability of every
unlimited. It is joint as well as shareholders is limited to the
several extent of the unpaid amount
on shares held by him
5 Act Partnership is controlled under Joint Stock company is
partnership Act, 1932. controlled under the India
companies Act, 1956.
6. Legal Status The partnership firm does not The joint stock company
enjoy independent legal status enjoys independent legal
distinct from its partners status. Distinct from its
shareholders.
7 Management Partnership firm is managed by Joint Stock company is
the partners themselves. managed by the elected
representatives of the
shareholders i.e. the Board of
Directors.

8. Continuity The partnership firm lacks Joint stock company enjoys

and stability continuity and stability. Any continuity and stability. It is
partner can dissolve the firm by not affected by death,
giving a fourteen days’ notice. insanity or insolvency of the
shareholders.
5. Co-operative Society & Joint Stock Company

Sr. Point of Co-operative Society Joint stock company
No. Distinction
1 Formation Formation of aco-operative Formation of a joint stock
society is comparatively company involves many legal
cheaper formalities. It is lengthy,
complicated and costly process
2 Motive The main motto of a co- The main motto of a joint stock
operative society is to provide company is to earn profit.
services to members. Profit Providing service is the
making is its secondary secondary motive.
objective.
3 Transferability Shares are not transferable to Shares are freely transferable
of shares other members though they in a public limited company.
can be surrendered to the
society.
4 Numbers of A minimum of 10 members A private company must have
Members are required for formation of at least 2 members and a
a cooperative society though maximum of 50 members. A
there is no maximum limit. public company has a
minimum 7 members but there
is no maximum limit.
5 Management Managing committee is the Board of Directors constitute
managing body of the management of company.
cooperative society. However Directors run the business very
the management is not very efficiently since they possess
efficient. the required expertise.
6 Capital Raising It can raise limited capital It can raise large capital since
capacity since the dividend is fixed attractive dividend is paid and
and there is no capital there is capital appreciation
appreciation
7 Voting Rights The principle of voting is one The principle of voting is one
member one vote share one vote
8 Remuneration Managing committee works Directors are paid fees
honorary capacity (allowances) for attending
Board Meetings.

6. Co-operative Society and Partnership Firm

Sr. Point of Co-operative Society Partnership firm
No. Distinction
1 Meaning It is voluntary association When two or more persons join
of individuals which is hands to undertake certain
formed for providing activities with the objective of
services to members earning profits, it is called a
partnership firm.
2 Motive The main motive is to The main motive is to earn
provide services to its profits.
members
3 Membership A minimum of ten A minimum of 2 members are
members are required to required to form a partnership
form a co-operative firm. However the maximum
society. No maximum limit is 10 for banking business
limit. and 20 for non-banking business
4 Transferability of Shares can be transferred No partner can transfer his share
shares in favour of the society at in favour of others without the
any time by the members consent of other partners
5 Legal status Co-operative society Partnership firm does not enjoy
enjoys an independent an independent legal status.
legal status different Legally there is no difference
from its members. between the partnership firm
and its partners.
6 Registration Registration of co- Registration of partnership firm
operative society is is optional. Registration is
compulsory under State compulsory in the state of
Co-operative Society Act. Maharashtra.
7 Management The general body elects The partners themselves manage
the managing committee the partnership firm.
which looks into the
management of co-
operative society
8 Secrecy There is no secrecy as Secrecy can be maintained as
members are more and limited number of members and
books of accounts have to books of accounts need not be
be published published.
9 Act The co-operative society The partnership firm is governed
is governed by the State by Partnership Act, 1932
Co-operative Societies
Act, 1960.

7. Private Company and Public Company

Sr. Point of Private Company Public Company
No. Distinction
1 Definition A private company is a A public company means a
company which by its company which is not a
articles restricts the right to private company
transfer its shares, if any,
limit the number of its
members to 50.
2 Number of In a private limited company In a public limited company a
Directors a minimum number of 2 minimum number of 3
directors is essential directors is essential
3 Transfer of share Shares in Private company Public company can invite
are not transferable public for issuing its shares
and debentures.
4 Number of The minimum number of The minimum number of

members members are 2 and members are 7 and there is no
maximum 50 maximum limit of members.
5 Name It is compulsory to add the It is compulsory to add the
word ‘Private Limited’ after word ‘limited’ after the name
the name of private of public company.
company.
6 Issue of It is not compulsory to issue It is compulsory to issue of
Prospectus the prospectus and statement prospectus and in the absence
in lieu of prospectus of prospectus to sent statement
in lieu to the registrar.
7 Minimum Minimum paid-up capital is Minimum paid up capital is
Capital one lakh rupee five lakh rupees.
8. Quorum For a meeting of members For general meeting of
the quorum is minimum two members the quorum is
members minimum five members.
8. Sole Trading Concern and Co-operative Society.
Sr. Sole Trading Co-operative Society
No.
Meaning
1. It is a private enterprise that belongs to a It is a voluntary association of persons,
single individual who come together to provide service
to its members.
Regulating Law/Act
2. There is no law that governs It is governed by the Indian Co-
proprietorship firm. General operative Societies Act, 1912. However,
regulations, tax and labour laws have to every state has a separate regulating
be followed law.

Management
3. The sole proprietor is the owner and The management of a Co-operative
manager of the concern. society is based on the democratic
principle of management. The
managing committee is elected by the
members and acts as a representative of
the co-operative society.
Membership
4. The sole proprietor is the owner and the A minimum number of 10 members are
only member of the sole trading required for the formation of a Co-
concern. operative society.
Motive
5. Profit making is its only motive. Providing service to the members is its
main motive.
Profit and Loss Sharing
6. Profits earned belong wholly to the Profits are distributed in the form of
proprietor as his personal income. dividend. (Max 15% p.a.).
Losses, if any, are also to be borne by
him.
Liability
7. The owner of a proprietorship firm has The liability of the members is limited
unlimited liability to the extent of the unpaid amount of
shares held by them.
Legal Status
8. A proprietorship firm doesn't have a Co-operative society has a separate
separate legal status. legal status distinct from its members.
9. Joint Hindu Family Business and Co-operative Society.

Sr. Joint Hindu Family Business Co-operative Societ
No.
Meaning
1. In this form of business organization, It is a voluntary association of persons,
business is conducted by the members who come together to provide service
of Joint Hindu Family which is inherited to its members.
by them as per the law.
Regulating Law/Act
2. It is regulated by the Hindu law. It is governed by the Indian Co-
operative Societies Act, 1912. However,
every state has a separate regulating
law.
Management
3. Karta is the key person responsible for The management of a Co-operative
the management of the business. society is based on the democratic
He may be assisted by the coparceners principle of management. The
to a certain extent. managing committee is elected by the
members and acts as a representative of
the co-operative society
Membership
4. There is no maximum limit on the A minimum number of 10 members are
number of members in a Joint Hindu required for the formation of a Co-
Family Business. operative society.
Motive
5. Earnings profit it its main motive. Providing service to the members is its
main motive.
Liability
6. The liability of the Karta is unlimited The liability of the members is limited
whereas the liability of all the co- to the extent of the unpaid amount of
parceners is limited. shares held by them.
10. Sole Trading Concern and Joint Stock Company.

Sr. Sole Trading Concern Joint Stock Company
No.
Meaning
1. It is a form of business organization It is an incorporated association which
which is owned and managed by a is an artificial person created by law,
single person. having a common seal, ensuring
perpetual succession and a common
stock comprising of transferable shares
carrying limited liability.
Membership
2. There can be only one owner of the The minimum number of members in
business. case of a public limited company is 7.
Liability
3. The liability of the sole owner is The liability of the members is limited
unlimited. to the extent of the amount unpaid on
the shares held by them.
Legal Status
4. A sole trading concern does not have a A joint stock company has access to
separate legal status different from its large financial resources.
owner.
Financial Resources
5. Financial resources are very limited in a A joint stock company has access to
sole proprietorship. large financial resources.
Stability
6. Since the sole trading concern depends A joint stock company enjoys perpetual
on the survival of its sole owner, it lacks succession. Its stability and continuity
stability. is not dependent on its members.

11. Joint Hindu Family Firm and Joint Stock Company.

Sr. Sole Trading Concern Joint Stock Company
No.
Meaning
1. It is a form of business which is It is an incorporated associated which
conducted by the members of joint is an artificial person created by law,
Hindu family. having a common seal, ensuring
perpetual succession and a common
stock comprising of transferable shares
carrying limited liability.
Regulating Law / Act
2. A joint Hindu family business is a Joint Stock Company is controlled
family concern that operates under the under the Indian Companies Act, 1956.
provisions of the Hindu Law and Hindu
Succession Act, 1956.
Membership
3. There is no maximum limit on the The minimum number of members in
number of members in a joint Hindu case of a public limited company is 7.
family business. There is no maximum limit on the
number of members. In a private
company, the minimum number of
members is 2 and the maximum
number is 50.
Financial Resources
4. The financial resources of joint Hindu A joint stock company has access to
family firm are limited as compared to a large financial resources.
joint stock company.
Liability
5. The liability of the Karta is unlimited The liability of the members is limited
and the liability of co-parceners is to the extent of the amount unpaid on
limited. the shares held by them.
Stability
6. The stability of joint hindu family firm A joint stock company enjoys perpetual
depends on the birth and death in the succession. Its stability and continuity
family. After the death of the Karta, the is not dependent on its members.
business is passed on to the next
generation.
Q.2. State with reasons whether the following statements are true or false.
1. Sole trading company is easiest to form.
Ans. True.
(1) Minimum legal formalities.
Unlike joint stock company, sole trading company need not follow
complicated legal formalities. There are few, simple legal formalities to be
observed. This makes the formation easy. Anybody who is a major and
normal person can start the business. It requires no special qualification.

(2) No registration.
There is no long procedure of getting the organisation registered under any
law. He can start the business as soon as the idea is born.
(3) Small size.
The business is usually of small size. There is no need to go for
establishment of strong infrastructure including machinery and modern
technology. Therefore it can be easily organised.
(4) Small capital.
The sole trading business requires small capital which can be easily
mobilised through personal sources. He need not go for public issue of
shares and debentures which require a time consuming procedure.
(5) One man show.
Every aspect of businesses individually under the control of sole trader
himself. There is no member or partner. It makes the task easy and quick.
There is no need to consult or meet anybody to take a decision.
2. A sole trader has a limited liability.

Ans. False
(a) One man show.
A sole trader has unlimited liability. The sole trader himself invests entire
capital and bears all the risks in business. There is no other member or
partner to share the liability. He is entirely responsible for the consequences
of his business.
(b) No distinction between personal assets and business assets.
The law does not make any distinction between personal assets and
business assets of the sole trader.
(c) Debt liability falls on a single person.
Being the single owner of the firm, the sole trader is alone responsible for
the debts of the firm. He has to single handled manage all affairs of
business and faces risks and .uncertainty. Eventually all the losses fall on
his head.
3. A sole trader has a weak bargaining power.
Ans. True.
(a) Lack of capital.
A sole trader has limited financial resources. Therefore, he can invest only
less amount of capital and sell goods in small quantity. M^has no
position of strength.
(b) Small scale business.
As the sole trader does not undertake large scale business, he has a limited
capacity as a bargainer in the market. In the absence of bulk purchase, he
can not influence the market as a buyer.
(c) Lack of professional skills.
A sole trader may not possess the skills of bargaining. Unlike joint stock
companies, he can not hire professional managers. Therefore, he may not
be able to get goods at competitive terms from the market.

(d) Lack of expansion and diversification.

Big organisations like joint stock companies divert their surplus funds towards
expansion . and diversification and become leaders. More they grow, more they
dominate and bargain. This is not the case of a sole trader who has no scope for
expansion and diversification and plays a less important role with a weak
bargaining capacity.
(e) Lack of competence.
A sole trader can also become a victim of sudden change in the market or a rise
in the number of competitors. This may be due to his limited financial capacity.
,,Thus a sole trader has a weak bargaining power
4. It is difficult for a sole trader to operate his business in an international
market. or
Sole proprietor is useful for small business in local area.
Ans. True.
(a) Specialist of local market.
Sole trader generally operates in a local market. His activities are generally
confined to a limited or local area, covering local consumers. His business
activities are mainly spread in areas like groceries, tea stalls, fashion
designing, furniture mart, laundry, restaurants etc. which are purely local in
nature. Thus local business is suitable for a small business.
(b) Lack of capital
A sole trader has a limited capacity to raise finance. Limited financial
resources restricts his operations within the local areas. National and
International business requires large scale investment.
(c) Lack of expansion and diversification
Expansion or diversification of business requires special skills and
professional management. He can not hire expensive managerial skills. He can
not invest huge capital on modern infrastructure. Therefore he prefers to run a
small business.
(d) Unlimited liability.
His liability being unlimited, he has to take calculated risk and never jumps to
large scale business. Being a one man show, he can not expand business
beyond certain limit.
(e) Weak bargaining capacity.
His bargaining power is weak due to limited financial resources. He can not
influence market as a buyer. He can not become a leader and therefore remains
a small player.
Thus he generally operates in a local market.

5. A sole trader can take quick decisions and prompt action for his business
Ans. True
(a) One man show.
A sole trader enjoys a complete authority over the affairs of the business. He
invests the entire capital and become the sole authority of taking major
decision.
(b) He is superior and other employees are sub-ordinates.
He is sole owner, manager and controller of the business. There is nobody to
challenge his authority. Though he keeps assistants, they are only his sub-
ordinates who readily accepts his decisions and implement the same.
(c) Lack of accountability.
Even if the business suffers losses, there is no need for him to provide an
explanation to anybody. He is not even answerable for any action regarding
the affairs of the business.
(d) No partners to share profit and losses.
Sole trader does not allow any outsider to join his business. It is
distinctively meant for single man ownership. In the absence of partners, the
entire responsibility of investment, decision making, risk taking and
uncertainty bearing rests with him. Therefore his authority is unlimited.
(e) No meetings and consultation.
Unlike joint stock company, there is no need for sole trader to conduct
board meetings and share holder meetings to get their approval. Sole trader
is free from time consuming meetings and extensive discussions. There is
no need to consult anybody to take decisions. Therefore, he can take quick
decisions and prompt action for his business.
6. A sole trading concern can maintain complete business secrecy.
Ans. True
(a) One man show.
Being one man show he never consults anybody while taking business
decisions .There is no source to leak information. He keeps all information
and decisions close to his heart. If needed, he may not share information
with his family members also.
(b) No legal formalities
A sole trader need not publish his books of accounts. There is no statutory
requirements like publishing balance sheet, annual report, etc. Thus there is
no source of leakage. All the secrets of business remain with him.
(c) Rivals are denied information
His new ideas for business promotion are not to be known to his
competitors as he need not disclose this information to outsiders.
(d) All secrets remain within the company.
Even during crisis time no one will come to know about his position. In
case he is suffering losses, no outsider would come to know unless he is
ready to share the information. He never dares to open his mouth in this
regard.
Thus complete business secrecy can be maintained by sole trading concern.
7. Profit motive is the primary objective of a business Organisation.

Ans. False.
a) Profit motive is not primary objective.
Profit motive is not the primary objective of all business organisations.
Organisations like co-operative society and public sector units (PSUs) are
not profit oriented. They have other objectives besides earning profit. Only
private enterprises are purely profit oriented.
(b) Service motive.
Public Sector Business Organisations and co-operative organisations are not
guided by self interest and profit motive. Their primary objective is to
provide service. A part of the profit earned by public sector organisations is
spent on Poverty Alleviation Programmes.
(c) To promote welfare.
Public Sector Organisations and co-operative organisations are welfare
oriented. Though they earn profit their main goal is to promote welfare of
the general public. "All for each -Each for all" is the principle of co-operative
organisation. Balanced economic development, reduction of inequality are
the goals of public sector.
(d) Social and political considerations.
The public enterprises like Indian Railways are influenced by various socio
economic and political considerations and not by profit motive. Public
organisations provide utility services like provision of water, electricity, health
and education at reasonable cost. They generate millions of job
opportunities.
e) Helps in accelerating economic growth.
Public sector units work towards stimulating economic growth. They serve
the economy by providing strong net work of infrastructure. Their
contribution spread in different areas including transport, communication,
fertilizers, coal, oil etc.
8. The maximum number of members in a Joint Hindu Family Business is fifteen .

Ans. False
(a) The size of family determines the number.
The number of members in case of Joint Hindu Family business is uncertain. It
is determined by the size of the family. There is no limit on maximum number
of members in a Joint Hindu Family.
(b) Membership by operation of law.
Joint Hindu Family business comes into existence due to operation of Hindu
Law. The person becomes member by status. Therefore, membership comes to a
person naturally by birth.
(c) Birth rate and death rate.
The number of members fluctuates according to birth rate and death rate of the
family. A male person who is born in a Hindu Family automatically becomes a
member by the virtue of his birth. At the same time, the depth of a person reduce
the number of members.
(d) No outsiders allowed.

Unlike Joint Stock Company, Outsiders can not become the members of a
Joint Hindu Family. The membership is confined to family members. The
firm does not entertain partnership outside.
9. There is no limit for membership in Joint Hindu Business.

(or)
There is no maximum number of members in Joint Hindu Family Firm.
Ans. True.
Answer: Refer - Q. No. D (1) above
10. The liability of a 'Karta' in Joint Hindu Family firm is limited.

Ans. False
(a) Unlimited liability.
The liability of a Karta in joint Hindu family firm is unlimited. All the debt
obligations fall on the head of Karta. Though Karta is assisted by co-
parceners, he is the final authority to take decisions. He individually faces
risks and uncertainty. Thus Karta is held responsible for any wrong decision
and has to pay off the liabilities.
(b) No separate legal status.
The joint Hindu family business does not enjoy a separate legal status.
Karta is solely responsible for any outcome of business.
(c) No distinction between personal assets and family assets.
The law does not make any distinction between business assets and family
assets of Karta. In case of a crisis, the Karta has to sell off all personal
assets to meet debt obligations.
(d) The liability of co-parceners is limited and Karta faces unlimited liability.
All other members (co-parcerners) have limited liability. Their liability is
limited to the share of each member in the family business. On the
contrary, Karta faces unlimited liability.
(e) No membership from outside.
Joint Hindu Family does not entertain any outsider to become coparcener. Thus there is no
possibility of risks divided and liability shared. Therefore Karta faces unlimited liability.
11. Joint Hindu Family emerges out of an agreement between co-oparceners. (or)
Co-parcener are the partners of the Joint Hindu Family business.
Ans. False.
(a) Co-parcener are the members of the business, but they are not partners of the
business. Only Karta is authorized to enter into contract on behalf of the firm.
(b) Existence by law and not by agreement.
Joint Hindu Family business comes into existence due to status and not due to
contractual agreement. It has no partnership deed. It comes into existence by
the operation of Hindu Law. In the absence of agreement, the co-parceners
are not partners though they share profit.

(c) No principal - agent relationship. A partner has a right to represent himself as

a principal as well as an agent of the firm to the third party, (principal agent
relationship). A co-parcener has no right to act as a principal cum agent of the
firm to the third party. (d)Limited liability.
Every partner has unlimited liability. But the liability of the co-parcener is
limited to the extent of their share in the joint Hindu family business.
(e) Equal share in profit. In a partnership firm, every partner receives profit on
the basic of ratio agreed upon. But there is no such ratio of sharing profit
among co-parceners. Profit is equally shared between Karta and co-parceners.
Thus co-parceners are not partners in business.
12. There is continuity in the Joint Hindu Family Business.

Ans. True
(a) Continuity and stability.
Joint Hindu Family business can continue for a long period of time. It does
not come to an end and passes from one generation to another.
(b) Comes into existence by operation of law.
This business comes into existence due to operation of Hindu Law.
According to Hindu law business is considered as a heritable asset.
Hindu law states that the family business is passed on to three successive
generations i.e. sons, grandsons and great grandsons become joint owners
of the property due to birth in the family.
(c) Death of Karta is not the end of business. Death of 'Karta' does not affect the
existence of the firm. The next eldest member of a family can take over the
position of 'Karta'. Even the death of Co-parcener does not affect the
business.
(d) Unity of family. Mutual trust and help keep the family united for ever. The
wisdom of elders and leadership of Karta ensure togetherness. When one of the
members faces a problem, the entire family stands behind him and show their
solidarity. It strengthens the spirit of unity.
13. Joint Stock Company can raise huge capital.

Ans. True.
1. Long term sources of finance.
a. A joint stock company can raise capital through issue of shares and
debenture.
b. It can raise loans from financial institutions like LIC, UTI, RCTC.
c. Development banks like IDBI, SIDBI, IPCI also provide long term loans
2. Short term sources of finance.
a. It can invite general public to keep their money in deposits .
b. It can approach commercial banks for overdraft, cash loans, cash credit,
bills discounting, etc.

3. International sources.
A joint stock company can raise capital in international market through Global
Depose Receipts (GDR) and American Depository Receipts (ADR).
4. Investors of all classes.
Joint stock company is in a position to sell its shares to all sections - rich,
middle etc. and poor. Since capital of the company is divided into shares of
small denominations, reaches even the poor sections of the society.
5. Incentive and options.
The features like attractive dividends, voting rights, transferability of shares
etc. act incentive to impress large size of investors.
Joint stock company provides many options to investors such as equity shares,
preferences shares, debentures etc. which suits different types of investors.
14. In partnership agreement may be oral or written.

Ans. True.
i. Agreement is a must.
Partnership is created out of agreement. In the absence of agreement, the
partnership is not valid. In India the agreement may be" oral or written.
However it is advisable to have written agreement for the sake of security.
ii. Partnership is not based on status.
Partnership is not created out of relationship or status. Whatever may be the
close relationship one may have with the partners, it can not quality them as
partners. It is the agreement between them that constitutes partnership.
iii. Mere participation in business activities can not make them partners.
The fact that somebody is participating in the operation of the partnership firm
does not mean he is a partner. For example, in case of joint Hindu family all
family members (coparceners) operate the firm together and share the profit.
But joint Hindu family business is not a partnership organisation. Therefore,
an agreement is a must for partnership.
iv. Mere understanding between person is not an agreement.
A partnership firm may use the services of a person to assist the firm in it
work. The person may be paid a certain percentage of profit for that work.
Here the person works on good understanding and not on agreement. He will
not be recognised as a partners unless they have agreed to that effect.
v. Partnership deed protects the rights of partners.
Partners put their agreements in the form of document called "partnership
deed". It reveals all aspects including amount of capital invested by each
partners, ratio of share of profit etc. This document is a security to protect the
rights and claims of partners. Such an written agreement avoids
misunderstanding and disputes.

15. The liability of every partner is unlimited.

Ans. True.
1. Unlimited liability.
All partners have an unlimited liability for the firm's obligation towards outsiders.
They are jointly and severally liable for all debts and obligations of the firm
whether incurred by themselves or other partners.
2. No separate legal existence.
It is a voluntary association which enjoys no separate legal status. The ownership
as well as management lie with the partners In other words there is no difference
between the firm and the management in the eyes of the law.
Thus they are liable for all profit and loss arising out of their deals
3. No distinction between personal assets and family assets
All the partners have an unlimited liability for the firm’s obligation towards
outsiders. If the business assets are not sufficient to pay the debts, the personal assets
of the partners may be attached for that purpose.
They are jointly and severally liable for all debts and obligations of the firm whether
incurred by themselves or by other partners as agents of the firm.
4. No membership from outside to share liability.
Partnership allows only limited members. There is no outside member to share
liability. They do not invite general public to become members. Thus all partner
have to bear unlimited liability.
16. Co-operative society differs from other forms of business organisation.

Ans. True
a) Service motive.
The basic objective of all other commercial organisation is to earn profit, while the
objective of a co-operative organisations is to provide service to its members. It is
voluntary organisation where membership is open to all irrespective of caste or
religic.
b) Mutual interest and common welfare.
The co-operative organisation is formed to uphold the principle of "All for each and
e for all". It stands for the view that self help and mutual help can promote common
welfare. The other organisations are personal organisation promoting personal
interest.
c) To protect the interest of weaker section.
The private organisation are guided by self interest and profit motive. The co-
opera organisation is formed by people from weaker section to protect their
interest.
d) Principle of one man - one vote.
Private organisations like Joint Stock Company encourage concentration of power
in hands of few and growth of monopoly. It is based on the principle of one share
one vos In co-operative society, the voting rights are based on the principle of 'one
man one votf. There is democratic management and equality.

e) To promote economic interest of the poor.

Business organisation like Joint Stock Company serves the interest of rich and mid
class who invest their money on shares. Co-operative society serves the interest of p
people. It works for the noble cause of removing poverty and reducing inequality.
17. The membership of co-operative society is voluntary.

Ans. True
(a) Voluntary associates
Co-opratiove organization is defined as a voluntary association of people who
have joined together to promote their common economic interest.
(b) Free to join and quit.
It is voluntary association of persons and not of capital. It is formed with the
consent of its members. Any person can join organization at his own will at time
and also can leave at any time by giving due notice to the society. No one is
compelled to become a member.
(c) Open membership
The membership of a co-operative society is kept open to any person. It is not
based on caste or creed. No discrimination is applied on the basis of sex, colour
race etc.
d) Political and religious neutrality
A co-operative society is formed with the basic idea of promoting
common social and economic interest. It is expected to remain away from
the religion and politics i.e. people cannot form a co-operative society for a
particular religion or a political party.
(e) Low face value of share
Generally the face value of share is kept at a relatively lower level. It
enables everyone to become the member.
18. Maximization of profit is the main motto of co-operative society

Ans. False
(a) To promote mutual welfare.
The main motto of co-operative society is to promote mutual welfare of
the members and not maximization of profit. Service above self is the
spirit of co-operation
The primary objective of a co-operative society is to provide service to its
members. The secondary objective of a co-operative society is to make
profit.
(b) To protect weaker section from exploitation
The co-operative organization come into existence due to economic and
social imbalance during the period of industrial revolution. Its main aim is
to protect weaker sections from the exploitation of private monopoly.

(c) Low prices and fair quality of goods

Co-operative societies distribute goods of fair quality at lowest possible
prices. Since many office bearers provide honorary services, its operating
cost remains less. Thus it supplies goods at lower prices. The main
objective is to provide service and not to earn profit.
(d) Promotes equality
It aims at mutual prosperity of all and not of few at the cost of others.
Thus it safeguards the community against the evil of monopoly. The
principle of ‘One man – One vote’ aims at maintaining equal status for all.
(e) Builds up good will
The co-operative organization gives scope for self – government to its
members. It promotes the feeling of goodwill and co-operation among its
members. Thus the basic and fundamental objective of co-operative is to
provide service to its members.
19. The voting of the co-operative society is based on the principle of ‘one share
on vote
Ans. False
(a) Principle of equality
The voting rights of co-operative society are based on the principle of ‘One
man one vote’ Co-operative organization is based on democratic
management. In co-operative organization each member is given equal
right.
(b) Co-operative mutual interest and not individual interest
Co-operative organization is formed with the purpose of avoiding
individual domination and to promote mutual welfare. Therefore, voting
rights are not based on number of shares.
(c) Promotes the spirit of democracy.
Unlike joint stock company the entire management body of the co-operative
organization is elected by its members. Even the chairman is elected by its
members. Thus it upheld the democratic principle.
(d) Avoids concentration of power.
In a joint stock company people who have majority shares enjoy excess power
a-d keeps management under their control. They can influence decisions in
favour of theft ideas and earn surplus profit. It leads to concentration of economic
power. In a co-operate society, individual domination is eliminated and mutual
welfare is promoted.
20. The shares of a co-operative society are easily transferable.

Ans. False
(a) Shares are not easily transferable.
Shares of a co-operative society are not easily transferable in the market. Shares of
a co-operative society are generally returned to the society.

(b) Shares are not listed in stock exchange.

Shares of a co-operative society are not listed on a stock exchange. Therefore they
not be bought and sold. Thus there is proper trading centre for shares of co-open
society.
(c) No incentive for investors.
The shareholders of a co-operative society neither get higher rate of dividend nor
voting powers on the basis of individual holdings. Therefore, buying shares is not
an attract option for the investors.
(d) Co-operatives encourage membership and not shares.
Co-operative society aims at the prosperity of all the members of the society.
Therefore the membership is always kept open. Co-operatives, instead of offering
shares to the members, encourages new membership.
21. The ownership and management are not separate in joint stock company.
Or
Shareholders can manage the business.
Ans. False
1. The company is an independent body altogether from owners(shareholders).
Being registered organization, joint stock company enjoys a separate legal status.
The members are not liable for the action of the company.
The company is an artificial person purely created by law. It can function
independently.
2. Shareholders are owners of the company.
Shareholders enjoy the ownership of the company. They do not manage company
affairs.
However company cannot manage and control management activities like human
beings. Therefore shareholders elect among themselves directors who act as the in
charge of the company.
3. The staff of the company implements the decisions of the company.
The directors recruit group of executives and other employees to manage company
affairs.
These managers and other staff implement the decisions: of the directors. Thus
management falls in the hands of directors an employees.
4. Shareholders do not manage the company* directly.
In a joint stock company there is complete separation of ownership and
management. A member a owner but he cannot bind company by his act. His
activities are personal and nothing to do with company affairs.
5. Shareholders can influence management indirectly.
Shareholders enjoy voting rights which can be used by them to influence
management indirectly. If shareholders are not satisfied with the performance of
directors, they can be ranged by the members. Policy decisions taken by the board
must be approved by the shareholders.

22. Registration is not compulsory for Joint Stock Companies.

Ans. False.
a) Compulsory registration.
It is compulsory on the part of every joint stock company to register itself
under Indian Companies Act 1956. Companies operating without
registration are treated illegal.
b) Certificate of incorporation.
The company has to apply for registration in prescribed form. Once the
Registrar is satisfied with the documents, he will enter the name in his
register.
After registration, the Registrar issues a certificate of Incorporation. The
company becomes a distinct legal entity from the date mentioned in this
certificate.
c) Separate legal status.
Registration provides an exclusive identity to exist independently. The
survival of the company does not depend upon members. Thus Joint Stock
Company enjoys a separate legal status on account of registration.
d) Registration is the initial process.
The formation and working of the company is regulated by the provisions
of the Indian companies Act. Registration signals the beginning of the
company. No company can function without registration.
(e) Death or insolvency of a member or director does not affect survival
The existence of a joint stock company does not come to an end due to the
death or insolvency of a member or director. The company is established
by law. Even if all members and directors die, the company continues to
survive.
23. Public limited company shares are freely transferable
Ans. True
a) Free transferability
There are no restrictions (except preference shares) on transferability of
public limited company share. A shareholder of a public limited company
can sell his shares to anybody he likes. Every member is free to transfer
his shares to anyone without the concern of other members.
(b) Shares are traded in the stock market.
The shares of public limited company are traded in secondary market known
as stock exchange. They can be purchased and sold through the stock
exchange.
(c) Incentive to investment.
Free transferability of share encourages public to invest shares. Crores of shares
are bought and sold in a day
(d) Voluntary association.
Joint Stock Company is a voluntary association where e; member join the
company on their own will. Every member is free to invest in Initial Pu Offer
(IPO) irrespective of their economic status and later they are free to sell the same
anybody they like.
24. A joint stock company ensures perpetual succession.

Ans. True.
(a) Continuous existence.
The death, insolvency, lunacy etc. of its members and directors does not affect the
sui of the company. Thus it enjoys perpetual succession.
(b) A artificial person created by law.
A joint stock company is an artificial person created by law. It has distinct
legal state Members may come, members may go. But the company exists.
Even if all member and directors die, the company continues to exist.
(c) Closure involves a legal procedure.
Since company is formed under the provisions of the companies Act 1956, it can
would up its operations only through the legal process.
(d) Stability.
Compared to sole trader and partnership, the joint stock company enjoy
greater degree of stability and growth. In fact stability and perpetual
succession and complimentary to each other.
25. Company form of organisation has developed before industrial revolution.

Ans. False.
(a) Industrial revolution necessitated the birth of company.
Industrial revolution brought up sudden changes in the scale of operation of
industry.
Company form of organisation is very suitable for large scale business.
Therefore
joint stock company appeared after industrial revolution.
(b) Lack of large scale industry.
At the time of industrial revolution only two kinds of organisation were
existing trading concern & ii) Partnership organisation. Both of these
organisation could not cope up with the industrial revolution. It resulted in
the arrival of company organisaion.
(c) Larged scale production
Industrial revolution brought major changes in production such as factory
system, large scale investment and professional management. such changes
necessitated the introduction of company form of organization.
(d) Research and technology
Industrial revolution mainly focused on innovation technology, market
research and risk. A joint stock company fulfills such aspects.
(e) Limitation of small units
Small units suffered from various limitation such as limited resources, lack
of professionalism, unlimited liability, lack of modernization etc. Joint Stock
Company became the suitable organization to fulfill the objectives of
industrial revolution.
Therefore, company form of organization was introduced after industrial
revolution.

EXTRA OBJECTIVE TYPE QUESTIONS

Q.3. Select the Proper option from the options given below and rewrite the completed
sentences.
(1) A sole proprietorship is the ________ form of organization
(a) Private sector (b) Public sector (c) Joint sector
(2) A sole partnership has _____________ owner / owners
(a) one (b) two (c) unlimited
(3) A sole proprietorship is a type of ______ organization in nature
(a) government (b) personal (c) legal
(4) __________ is the oldest and simplest form of business organization
(a) Joint stock company (b) Joint Hindu Family firm (c) Sole trader ship
(5) The Minimum number of owners in a sole trading concern is ___________
(a) one (b) two (c) three
(6) Sole trading concern generally operates in a __________ area.
(a) local (b) regional (c) national
(7) The liability of a sole trading concern is__________
(a) limited (b) unlimited (c) personal
(8) There is less scope for ____________ under sole tradership.
(a) personal care (b) secrecy (c) specialisation.
(9) The organisation that can spread its activities to remote areas is .
(a) sole tradership (b) Joint stock company (c) partnership
(10) The sole trading concern suffer from lack of
(a) motivation (b) supervisor (c) stability
(11) Sole trading concern suffers from the limitation of
(a) continuity (b) personal touch (c) supervision
(12) The liability of a Sole Trader is a _______________
(a) unlimited (b) limited (c) limited by guarantee
(13) The liability of the Karta is ______________
(a) Unlimited (b) limited (c) Joint and several
(14) The Joint Hindu Family business is normally restricted to______________ market
(a) local (b) regional (c) national
(15) The control of the joint hindu family business is in the hands of ___________
(a) Karta (b) Co-parcener (c) shareholder
(16) The business organization that operates only in India is called __________
(a) Joint Hindu Family Business (b) partnership (c) Sole trading concen
(17) The members of the undivided Hindu family are called ___________
(a) Karta (b) Co-parceners (c) Partners
(18) Business organisation which is controlled by Hindu succession Act is known
as_________
(a) Joint stock company
(b) Partnership firm
(c) Joint Hindu family firm
(19) Limited managerial skill is the _______ of Joint Hindu Family Business.
(a) feature (b) limitation (c) advantage
(20) The head of Joint Hindu Family Business is called as

(a) proprietor (b) Karta (c) Director
(21) The members of a Joint Hindu Family Business are known as
(a) partners (b) Karta (c) co-parceners
(21) ____ is the business organisation where the membership is created by the status.
(a) Partnership firm (b) Joint stock company (c) Joint Hindu family
(22) Female members enjoy co-parceneray rights in the state of .
(a) Kerala (b) Tamilnadu (c) Maharashtra
(23) For partnership Organisation minimum____________ number of persons
are required
a) Two (b) Seven (c) ten
(24) The maximum number of partners in a banking business is__________ .
(a) 10, (b) 2, (c) 20
(25) The agreement signed between partners is called .
(a) Partnership deed (b) memorandum (c) bye-laws
(26) The liability of the partners in a partnership firm is
(a) unlimited (b) limited (c) joint and several)
(26) The maximum number of partners in a non-banking business is
(a) 20 (b) 10(c) 50
(27) Indian Partnership Act was passed in the year
(a) 1912 (b) 1956 (c) 1932
(28) Registration of partnership firm is ___________in Maharashtra.
(a) Compulsory (b) not compulsory (c) optional
(29) Registration of partnership firm is___________ in India
(a) not compulsory (b) compulsory (c) optional
(30) The minimum number of members required for the registration of The a co-
operative society is ______10/20/25)
(31) The nature of ___________ organisation is service oriented
(sole tradership/co-operative/partnership)
(32) Each for all and all for each is the principle of___________ .
Sole tradership/co-operative/partnership)
(33) Indian co-operative societies act was passed in__________.
(1920/1912/1925)
(34) The Maharashtra co-op. society's act was passed in________ .
(1960/1912/1925)
(35) a co-operative society_______ principle is followed in voting.
( one share one vote / one man one vote / no vote)
(36) The document containing rules and regulations of the co-operative society is
called__________.
(byelaws / agreement / rule book).

B. Write a word or phrase or a term which can substitute each one of the
following.
(1) Organisation whose owner is the sole manager and decision maker of his
business.
(2) Name the business organisation which can protect business secrecy to the
maximum extent.
(3) Type of organisation which suits the business based on fluctuations &
speculation requiring quick decision.
(4) The oldest and simplest form of business organisation.
(5) 'One man show' type of business organisation.
(6) The senior most members (head) of Joint Hindu Family Business
(7) The Act that provides provisions for the existence of Joint Hindu Family
(8 The members of the Joint Hindu Family
(9) A business organization in which a person inherits business and funds from
previous generation which automatically pass on from one generation to another
generation
(10) A business organization which comes into existence by law of inheritance
(11) The name in which the business is carried on under partnership
(12) Agreement of partners (or) the document which shows the ratios on which profits
and losses are shared.
(13) A partner who gave his name to partnership firm.
(14) A partner in partnership firm who takes active participation in day to day work.
(15) Partners whose name is unknown to general public.
(16) A partner whose liability is limited to the extend of his investment.
(17) A partner who does not take active participation in day to day work of the firm.
(18) The documents containing rules and regulations laid by managing committee
of co-operative organization
(19) An elected body of members of co-operative society which is responsible for
day to day administration of the society
(20) A type of organization which has minimum 10 members
(21) The type of commercial organization which is established for provided services
C) Match the column
A Group B Group
(i) Sole tradership (a) Owned and managed by government
(ii) Maximum secrecy (b) Sole proprietorship
(iii) Corporate Organisation (c) Joint Stock Company
(iv) Services of sole trader (d) Remotest areas
(v) Public Enterprise (e) One man business

A Group B Group
(i) Karta’s liability (a) Depends on births and deaths in the
(ii) Membership in Joint Hindu family
Family Business (b) Karta
(iii) Co-parcener liability (c) By status
(iv) Management right (d) limited
(v) Number of members (e) unlimited
(f) 50
Group A Group B
i) Unlimited liability a) Compulsory in Maharashtra
ii) Minimum Partners b) Responsible upto debt by him
iii) Limited partner c) Incase of general partnership
iv) Minor partner d) Two
v) Registration of partnership e) Limited liability
vi) Indian Partnership Act f) Unlimited liability
vii) Nominal partner g) Below 18 yeas
h) 1932
i) Lends name
A Group B Group
i) Co-operative faming a) Cash basis
ii)Voting rights co-operative b) Co-operative organization
societies c) One man one vote
iii) Service motive d) Farmers’ co-operative society
iv) Marketing co-operative e) Formed by small producers
v) Trading of co-operative f) One shares one vote


J. K. SHAH CLASSES S.Y.J.C. – OC
CHAPTER 2
BUSINESS SERVICES
Q.1. DISTINGUISH BETWEEN
A.
Sr. Points of Life Insurance Fire Insurance Marine Insurance

No. Distinction
1. Meaning A contract whereby A contract which A contract whereby
the insurance insurer promises to the insurance
company undertakes pay compensation company undertakes
to pay a certain sum to insured if to pay compensation
of money either on something happens to the insured in case
death or maturity to the subject matter of loss to him due to
(whichever is earlier) due to fire or dangers (perils) of
for a consideration related events. the sea.
(Premium).
2. Who takes It can be taken by an It can be taken by It can be taken by
it individual for his individuals for their exporters, importers
own life or for his properties or by and shipping
family members businessmen for companies
their goods,
properties business
liabilities, etc.
3. Subject In Life Insurance, the In Fire Insurance, In Marine Insurance,
Matter life of the Insured is a the goods and Goods in ship, cargo
subject matter assets or property and freight is the
of the insured is the subject matter
subject matter
4. Insurable It must exist at the It must exist both at It must exist at the
Interest time of contract the time of contract time of loss
and also at the time
of loss
5. Period The policy can be It is generally for a
It is generally for a
issued for any short period like
short period and
number of years, one year may range from one
even until death of month to a year.
the assured Normally, it does not
exceed one year
6. Compensati It is paid either on It is paid only if It is paid only if there
on death or maturity there is loss due to is a loss causing
whichever is earlier fire during the term event during the
of policy term of the policy
: 27 :
7. Point of It is not applicable as

It is applicable as It is applicable as
Distinction a human life cannot insurance company insurance company
be valued in terms of
compensates for the compensates for the
money for calculating
financial loss and financial loss and the
the actual loss the insured is insured is brought
brought back to the back to the same
same financial financial condition
condition that he that he was before
was before the the event.
event
8. Number of Insured can take any Generally, only one Generally, only one
Policies number of policies on policy can be taken. policy can be taken.
the same life. However, double However, double
insurance is insurance is possible.
possible The beneficiary is the
insured person or
company.
9. Beneficiary The beneficiary can The beneficiary is The beneficiary is the

be insured (if the the insured who insured person or
survives the selected has insured the company.
term) or else the property or goods.
nominee or the legal
heir on the death of
the assured
10. Surrenderin The policy can be It cannot be It cannot be
g of policy surrendered before surrendered surrendered
the expiry of the term
subject to certain
conditions
B.
Sr. Point of Current Savings Account Fixed Deposit Recurring
No. Distinction Account Account Deposit
Account
1. Meaning It is that It is that account It is that It is that
account which which is opened account where account
is maintained by individuals in a fixed sum of where
by order to save a money is depositors
businessman part of their deposited for a can regularly
and others income fixed period save fixed
who have amount for a
regular bank specific
transactions period
: 28 :
2. Withdrawals Customers Customers can Customers Customers

can withdraw withdraw either cannot cannot
money by by cheques or by withdraw withdraw
cheques withdrawals slip during the during the
fixed period. If fixed period.
withdrawn If withdrawn
earlier, rate of earlier, rate of
interests will interest will
be less than be less than
applicable applicable.
3. Facilities The bank The bank gives a The bank gives The bank
gives a pass book, a fixed deposit gives a pass
passbook, cheque book and receipt to the book and
cheque book, pay-in-slip book customers pay-in-slip
statements of to the customers book
account and
pay-in-slip
book to the
customers
4. Who takes it It is suitable It is suitable for It is suitable It is suitable
for traders, fixed income for any person for fixed
businessmen, group, wage ors with income
firms or salary earners temporary idle group.
institutions. cash
5. Consideration There are no The Customer Payment is Payment is
Operations and restrictions on have certain
received only on received after
Withdrawals the operation restrictions onexpiry of the the expiry of
of a current withdrawals fixed period. If the fixed
account as long withdrawn period.
as there is earlier, then the
balance in the rate of interest
account will be less than
applicable
6. Rate of Interest Normally, Interest rate if low. Interest rate is The rate of
interest is not higher. Longer interest is
given the period, higher than
higher will be savings
the rate of account but
interest less than fixed
deposit
account
7. Nature of It is of Itis of continuous 90% of the 90% of the
Account continuous nature amount of amount in
nature fixed deposit the account
can be given as can be given
loan as loan
: 29 :
8. Facilities Temporary No Overdraft It is for fixed It is for a

overdraft facility is given period of time fixed period
facility is except when of time.
given the fixed
deposit receipt
renewed
C.
Sr. Point of Road Transport Rail Transport Water Transport Air Transport
No. Distinction
1. Speed Road transport It has It is the slowest It is the fastest
has limited considerable mode of mode of
speed due to speed since it transport transport
bad road runs on tracks
conditions, which rarely
accidents, etc. gets disturbed
2. Carrying It has limited It has huge It has a very It has limited
Capacity carrying carrying huge carrying carryings
capacity capacity capacity capacity
3. Cost of It requires The cost of It uses It uses airways
construction and limited capital construction of waterways which are
maintenance investment in trains, railway which are natural and
terms of tracks is high. natural high- hence there is
construction of Also the ways and hence no cost
road, vehicles maintenance of there is no cost involved.
and their trains, tracks involved. However, there
maintenance and stations is However, there is a huge cost
high. is high cost for
involved for constructions
construction of of aircrafts and
ships and ports airports. These
and also costs are very
maintenance of high compared
ships and ports. to other modes
of transport.
4. Distance Recommended Recommended Suitable for long Suitable for

for short for both short distances long distances.
distance and long specially across
distance countries and
continents.
5. Transport Transport Transport Transport Transport
Charges charges are not charges are charges are charges are the
fixed but are relatively low lowest very high
high due to and are fixed
increased fuel according to the
prices. distance.
6. Door to Door It provides It does not It does not It does not
service door to door provide door provide door provide
service to door to door door to door
service service service
: 30 :
7. Means of It uses It uses It uses boats, It uses

Transport animals, passenger big ships, aircraft,
animal carts, and goods liners, helicopeters,
motor-cycles train tankers, etc. jets, etc.
three and
four
wheelers.
8. Suitability It is suitable It is suitable It is suitable It is suitable
for for for for
transporting transporting transporting transporting
the goods in heavy goods very heavy light weight
relatively in large goods, perishable
smaller quantity over machineries and valuable
quantities for long in large goods to any
short distance. quantities to part of the
distance. any part of world.
the world.
9. Safety It provides Goods are Goods are Goods are
limited safety kept in safe as they safe as they
to goods locked are specially are specially
from sun, wagons packed. packed.
rain, wind, which
etc. provides
protection
against sun,
wind, rain
etc.
10. Accidents Chances of Chances of Chances of Chances of
accidents are accidents are accidents are accidents are
more due to less because less in less because
poor road of one way waterways. of good
conditions track and maintenance
and negligent good signal and expert.
drivers. system.
11. Ownership Ownership is Ownership is It is owned by It is owned
in the hands in the hands both private by both
of private of the sector as well private
parties government as public sector as
sector. well public
sector.
: 31 :
D.
Sr. Points of Cheque Bank Draft
No. Distinction
1. Meaning According to the Indian A draft is an order to pay
Negotiable Instrument Act, A money drawn by one office of a
cheque is an unconditional bank upon another office of the
order directing the banker to same bank for a sum of money
pay a certain sum of money payable to order on demand
only to the order of a certain
person.
2. Aim It aims at facilitating It aims at facilitating immediate
businessman for effecting outstation payments.
local payments.
3. Drawer The drawer is the account The drawer is the bank itself.
holder of the bank
4. Dishonour The cheque may or may not A draft can never be
be dishonoured dishonoured as it is already
paid for.
5. Bank The bank may not charge for The bank charges a nominal
Charges issuing cheque book. amount to issue a draft.
6. Payments Payment of crossed cheques Payment of bank draft can be
cannot be obtained obtained immediately
immediately
7. Facility Cheque facility is extended to Draft facilities is extended to
extended to account holders of the bank both account holders of the
only bank as well as outsiders.
8. Reliable Cheques issued by an A bank draft is more reliable as
individual may not be cleared it is issued by the bank only
due to many reasons such as after receipt of payment.
sign not matching, post
dated, less balance, etc.
E.
Sr. Points of Loans Overdraft
No. Distinction
1. Meaning It is arrangement under It is an arrangement under
which a certain amount is which the current account
advanced for a certain fixed holder is allowed to overdraw
period from the account.
2. Eligibility Any account holder i.e. Only current account holders
current, savings, fixed deposit can gets overdraft facility
can get a loan.
3. Rate of It is lower than that of It is higher than that of loans
interest overdraft
4. Duration It is for a long period It is for a short period.
: 32 :
5. Interest Interest is charged on the Interest is charged on the

Charged amount of loan sanctioned, amount actually withdrawn.
whether withdrawn or not
6. Amount Amount of loan is larger. Amount of overdraft is smaller
7. Separate Separate account is to be No separate account is
Account maintained. required.
8. Purpose The purpose is to meet long The purpose is to meet short
term requirements. term working capital
requirement.
9. Repayment Amount of loan is to be Amount of overdraft is
repaid in instalments or in adjusted against the deposits in
lumpsum on the due date. the current account.
10. Security Some valuable assets are to be Overdraft is sanctioned against
given as security hypothecation of stock.
F.
Sr. Points of Commercial Bank Central Bank (RBI)
No. Distinction
1. Function The main function is to accept The main function of the central
deposits from public for lending bank (RBI) is to regulate money
to industry and others. supply in the country.
2. Printing of The commercial banks cannot The central Bank can print
Currency print current notes. currency notes.
3. Acceptance The commercial bank accepts The central bank does not accept
of Deposits deposits from public deposits from public
4. Loans The commercial banks The Central Bank provides loan
provides loan to industry and to Bank and Financial
commerce. Institutions.
5. Ownership It can be owned by private It is owned and controlled by
and/or by government the government of India
agencies.
6. Number There are many Commercial There is only one Central Bank
Bank in India. (RBI) in India.
7. Monetary The commercial banks do not The Central Bank frames the
Policy frame any Monetary Policy Monetary and Credit Policy
8. Monitoring The Commercial Bank does The Central Bank keeps a check
not keep check on the Central on the Commercial Banks.
Bank.
G.
Sr. Points of Bonded Warehouse Duty Paid Warehouse
No. Distinction
1. Meaning Bonded Warehouse is the Duty paid Warehouse is the
warehouse where imported warehouse where imported
goods on which duty is not goods on which duty is already
paid are stored. paid is stored.
: 33 :
2. Location They are located within the They are located in port-town
dock area. outside the dock area.
3. Markets The imported goods stored The imported goods stored
here are mostly for the here are mostly re-exported.
domestic markets.
4. Supervision The customs authority closely These warehouses are not
supervises the working of supervised by the customs
these warehouses. authority. They are supervised
by port authority.
5. Delivery Delivery of goods is done Delivery of goods can be
after payment of Import duty. obtained after payment of the
In case of re-export, the rent charges of the warehouse.
import duty need not be paid,
only rent and service charges
need to be paid.
6. Purpose Main purpose would be that Main purpose would be that
either the importer may not the importer does not have
be in a position to pay the suitable warehousing facility or
import duty or he may not he faces any problem in the
require immediate delivery of transportation of the goods.
goods.
7. Ownership Such warehouses are owned Such warehouses may be
by public authorities. owned by private or dock
authorities.
1. Central bank cannot accept deposit from general public.
Ans. True
(i) Bank of the government
Central bank act as the bank of the government. It accepts government
deposits. It provides loans to government. But it does accept deposits from
general public
(ii) General public cannot operate accounts with central bank
General bank does not entertain general public to open account and
operate transactions. Central Bank only facilities government transaction
not general public
(iii) Central bank does not invite deposits for commercial purpose
Central bank is the apex body of banking sector which works to promote
economic growth of the nation. It brings price stability.
(iv) Central bank does not invite deposits for commercial purpose
Central bank is the apex body of banking sector which works to promote
economic growth of the nation. It brings price stability.
Unlike commercial banks, central Bank is not profit oriented . It never
invites general public to keep deposits to earn profit.
: 34 :
(v) Central bank is a welfare oriented organisation.

The primary objective of central bank is to work for the welfare of the nation. It
does not involve in commercial operations for the saeke of profit.
It designs and implements monetary policy. It helps commercial banks when
they meet financial crisis. But it does not accept deposits from general public.
2. Over draft facility is given to saving account holders.

Ans. False.
i) Overdraft facility is granted only to current account holders.
Business firms, companies and businessmen holding current account are
eligible to enjoy overdraft facility. It is granted to those account holders who
enjoy a good track record and reputation in their business transactions.
ii) Banks provide overdraft facility to adjust demand for and supply of funds.
Businessmen holding current account face shortage of funds to meet their
commitments. Overdraft facility helps to adjust their need for money.
iii) Overdraft facility is a kind of indirect loan to current account holders.
Over draft facility is an indirect loan available to current account holders. It
supports businessman to withdraw over and above their actual balance so as to
clear their cheques.
The extra amount is treated as loan and interest is charged.
iv) Overdraft facility is not available to saving account holders.
Overdraft facility is a special privilege enjoyed by current account holders. Other
accounts like saving account do not enjoy such facilities.
3. Current account is suitable for salaried people.

Ans. False.
i) Firms and businessment operate current account.
Current account is operated by businessmen to facilitate transactions in
business. Current account is exclusively opened for the purpose of handling
money transaction in their day to day business activities.
ii) Current account suits business community not salaried people.
Generally salaried people operate saving accounts. It is more convenient
to salaried classes. Businessmen always operate current account. He can
withdraw entire money keeping only minimum balance. There are no
restrictions in withdrawals as long as balance is kept in the account.
Therefore current account suits businessman more than the salaried
people.
iii) Overdraft facilities.
Current account holders are eligible to enjoy overdraft facility. It enables
the businessman to withdraw over and above the actual balance. It is very
useful to businessman whenever he faces temporary shortage of funds.
Therefore a businessman always prefers to operate current account.
: 35 :
iv) Short term finance

The businessman who have clean track record and reputation in their
current account transaction stand to enjoy certain other facilities. They can
get cash credit facility and other agency services from commercial banks.
4. Cash can be withdraw from ATM at any time.

Ans. True.
i. Availability of 24 hours service.
ATM provides 24 hours x 7 days service to customers throughout the year.
Therefor customer can withdraw money at any time.
ii. Spreading all over the country.
ATM is installed all over the country almost at every important place. You
can find A-* at all shopping centres, near railway stations, business centres
etc. As it covers a< important centres, the consumer has the option of
withdrawing money from anywhere at anytime.
iii. Helpful at the time of travelling.
When the customers visit different places, they have to carry their ATM card to
withti-aJ money. It is very helpful to travellers when they visit different
locations and picnic spas
iv. Riskless operation.
ATM facilitates fast and quick money transactions for the customer. They can
with money at restaurants, malls, shopping centres and any other place to
settle the payments.
The customer can operate all his deals without the risk of carrying large
amount cash. He can insert the card and receive money anytime at any
place.
5. Profit motive is the primary objectives of commercial banks, (or)
Commercial sanks are not service oriented organisations.
Ans. True.
i) Profit motive.
A commercial bank is a financial intermediary which performs certain
functions purely for re purpose of earning profit. All its financial
operations are based on profit motive.
ii) Interest acts as source of revenue.
Commercial banks accept deposits frojjn public by promising certain rate
of interest. From such deposits, they grant loans ra households and
business firms at a relatively higher rate of interest. The difference in
interest becomes profit. Thus profit earning is the Tiotive behind such
operations.
iii) Discounting bills and investment on shares.
Commercial banks are concerned with the business of investing money on
government bills and securities. They also invest part of their money on
shares. This provides them enough profit.
: 36 :
iv) Agency services.

Profitability is one of the fundamental principles of commercial banks.
They undertake various agency services such as collection of bills, payment
of premium, role of undertaker, issuing letter of credit, traveller cheque,
Dmat service etc. For all such services they collect commission which
adds to their income.
6. Duty paid warehouses help to provide storage for perishable goods.

Ans. False.
i. Duty paid warehouses accomodate imported goods.
Generally importer keep their imported goods until they are transported.
ii. Duty paid warehouses are set to help importers.
The duty paid warehouse are located near ports. Therefore it is very
convenient importers to keep their goods in such warehouses. It is very helpful
when they face problems in transportation.
iii. Duty paid warehouses do not provide cold storage facilities.
Duty paid warehouses do not provide cold storage facilities to store perishable
goods are convenient for the importers to keep their goods untill they are
transported to their places
iv. Duty paid warehouses provide other services
Duty paid warehouse also provides various other services like assembling
grading packaging, labelling etc. It promotes business prospectus of importers
7. Private warehouse are used by its owners
Ans. True
i) Private warehouses are owned and operated by manufacturers and their
own purpose. They do not allow outsiders to use this facility. Most of the
implant warehouses and field warehouses are private warehouses.
ii) Private warehouses are built to store only the goods of the manufacturer.
Private Warehouses are build by manufacturers to keep their finished goods
before they are distributed to wholesalers and retailors. They are helpful to
them to store the goods during the waiting period. Thus they are used for their
own purpose and not to help others.
iii) They help to store emergency stock.
Manufacturers use these warehouses to keep safety stock. Whenever there is
emergency demand, they release this stock immediately.
iv) Private warehouses help to meet seasonal demand.
Some goods are produced throughout the year. But they are demanded only
during seasons. To meet such seasonal demand, the manufacturers keep the
goods in private warehouses. There is no possibility of such warehouses
extending services to other businessmen.
v) They act as mixing centres.
Some producers receive different goods from different plants which are to be
mixed at one place. For example in case of fertilizer, different chemicals are to
be mixed in right proportion. Private warehouses facilitate such service to
their owners.
: 37 :
8. The principle of indemnity is applicable to life insurance.

Ans. False.
i. All contracts except for life insurance are contracts of indemnity.
The principle of indemnity is not applicable in case of life insurance. The
contracts and marine are based on the principle of indemnity. This principle
prevents the insure: recover anything more than the value of his own
insurable interest.
ii. The value of life can not be estimated in term of money.
The principle of indemnity ensures that the insured will not get
compensation more than the value of loss. In case life insurance, loss is
caused by death. It cannot be estimates terms of money. No monetary
compensation is equal to the value of life.
iii. Value of property or goods can be estimated.
In case of fire and marine insurance the subject matter is property or goods.
The value goods or property can be estimated in terms of money.
Therefore principle of inderr--. applicable in case of fire and marine
insurance.
iv. The principle of indemnity is based on security not on profitability.
In case of marine and fire insurance, the indemnity principle discourages
the policy I to exploit the opportunity to make profit out of loss. In the
absence of indemnit, insured will intentionally destroy his property or goods
to make profit. In case of life ins.. the compensation is paid at the time of
death. Life of a person is more valuable and n< be treated like property or
goods. Therefore it is illogical to apply the principle of inde-ipxase of life
insurance.
9. The insured must have insurable interest at the time of taking policy.
Ans. True.
i) Insurable interest means the insured should suffer financial losses if any
harm or damage happens to the property and he benefits if the insured
object is safe.
ii) Person taking the insurance must have insurable interest in the subject
matter he is going to insure.
iii) All the contracts of insurance follow this principle. If there is no insurable
interest then the contract of insurance becomes invalid.
iv) Ownership of the property at the time of taking the policy as well at time of
making the claim is essential in order for the insurer to have insurable
interest in the property.
v) A person has insurable interest in his own life and property. A wife has
insurable interest in the life of her husband. A businessman has insurable
interest in the goods and property of his business.
Thus, for an insurance contract to be valid the insured should have an
insurable interest in the subject matter at the time of taking the policy.
: 38 :
10. An individual must always tries to minimise the loss by fire as for as
possible.
Ans. True.
i) The insured must take care of the subject matter.
According to the principle of mitigation of loss, the insured should take all
necessary steps to take care of the subject matter. He should extend
protection to subject matter as of no policy is taken.
ii) The insured must minimise the loss.
It is the duty of the insured to take utmost care and precaution to prevent
damages on goods or property. He should not take it for granted in the
matter of protection. Such an approach will minimise the loss.
iii) It is his moral responsibility to protect the interest of the subject matter.
The policy holder should personally take initiative to ensure security of the
subject matter. For example, in case of fire insurance, the insured should
have all security arrangements like fire extinguisher, water facility, sand
etc.
iv) The insured must be alert to face challanges.
The insured should not have a casual attitude towards protection of the
property. If Mr. A's godown is on fire, the insured should not simply watch
the situation. He should try all possible efforts to stop fire like calling fire
brigade, pouring water on fire, calling the neighbours to join fighting etc to
stop spreading of fire.
11. Air transport is suitable for short distance.

Ans. False.
(i) Expensive for short distance.
Generally air journey is expensive. In case the short distance it is very
expensive. As the cost of operation remains high, the average cost for short
distance tends to be high.
(ii) Airtransport is luxury.
Inspite of arrival of several airlines, the competition has not reduced the
cost drastically. Every year the fuel price is hiked and so the cost of air
transport.
(iii) Poor coverage.
Most of the airports situated away from city. Air transport does not cover all
the locations «e road transport. Air transport can not take the passengers
directly to their destination. There is no door-to door service. It is common
that the passengers seek assistance from -cad transport to reach their place
from airport.
(iv) Lack of options.
In case of air transport, passengers do not have several options. Many
airlines do not operate routes for short distance locations. The frequency of
air journey to such places is els. Thus passengers find it difficult to book
tickets to suit their time of convenience.
: 39 :
(v) Cancellations of air service.

Even advance booking will not help the passengers. Due to climate
changes and management staff conflicts, there are cancellations. This will
upset the schedule of the passengers. It is difficult to book tickets from
alternative airlines.
12. Transport helps in raising standard of living.
Ans. True.
(i) Promotes standard living.
Transport facilitates movement of goods from factory to consumers. Modem
transport assures quick distribution of goods at national and international
level. Thus consumer stands to enjoy variety of goods of their choice.
The availability of all means of transport encourages competition among
sellers. Goods of -reasonable quality are sold at cheap prices. As a result, the
standard of living improves.
(ii) Supply of essential goods.
Transport facilitates supply of essential goods like foodgrain, fruit,
vegetable, medicines in adequate quantity to people. Nobody can live
without the assurance of supply of such goods. Adequate supply at
reasonable prices improve their standard of living
(iii) Price stability
Transport enables quick transport of essential goods from one place to
another place. In the absence of transport, there may be scarcity of goods.
It results on black marketing and rising prices. Thus transport plays an
important role in stability prices
(iv) Employment.
Transport sector acts as a source of employment for millions of job seekers.
The various types of transport like road, railways, airways and seaways,
generate pie"-opportunities.
(v) Industrialisation
Transport contributes towards the success of industrialisation.
Industrialisation contributes to national income and percapita income.
When per capita income increases, standard of living rises.
13. Water transport is the costliest transport.
Ans. False.
(i) Cheapest means.
Water ways are the cheapest of all means of transport. Its operating cost is
Practically there is no construction and maintenance cost for water ways.
(ii) Gift of nature.
Lakes, rivers and ocean are the gifts of nature. They are available at free of
cos: I capital required to operate water transport is relatively lower.
(iii) Economical
They can carry goods at lower rates.
(iv) Energy saving
Since they consume less energy, they are cost effective. The average cost c
remains low.
: 40 :
14. Rail transport provides door to door service.

Ans. False.
(i) No door to door service.
Unlike motor transport, trains cannot facilitate door to door service. People
have i with further transportation to carry the goods from railway stations to
homes f-o stations to homes or godowns. It also results in additional
expenditure for loa unloading.
(ii) Poor coverage :
The coverage of Indian railways is still inadequate Most of the remote villages
in the backward areas still remain isolated
(iii) They can not take travellors directly to home
The buses, taxis and autos take you directly to your destination. The trains
can only drop you at the respective stations. In some places, the railway
stations are located for away from their home.
(iv) The businessman uses other means of transport goods from station
The goods trains which transport raw material and machinery do not take
them to factories. The goods are left at stations. The business mean must
arrange to the means of transport to carry goods from railway stations to
his factory.
(v) Lacks flexibility
Road transport is convenient to travel to any part of the country. There are
different transport companies operating at different routes. Routes can be
changed according to the convenience of the passengers.
Rail transport travels by one way track. Once entered, the routes can not be
diverted. They can transport goods and passengers only those places which
are located in this route.
15. Water transport promotes international trade

Ans. True.
(i) Promotes international trade.
Sea transport is very suitable for international trade. They are helpful in
expansion of global trade. It enjoys greater scope than air transport. At
present three - fourth of the world trade is based on sea transport.
(ii) Bulky carrier.
Ships posses higher carrying capacity. They are suitable for transporting
bulky goods. The capacity of ship is greater than any other means of
transport. They are more suitable for international trade.
(iii) Gift of nature.
Lakes, raivers and ocean are the gifts of nature. They are available at free of
cost. Thus the capital required to operate water transport is relatively
lower.
: 41 :
(iv) Flexibility.
Water transport enjoys the merit of flexibility. If required, sea route can be
diverted during the time of voyage.
(v) Energy saving transport.
Unlike air and road transport, ships consume less energy to operate. Thus
they save energy.
16. Post offices provide money remittance services.

Ans. True
(i) Money order.
Money order is a facility extended by post office to send certain amount of
me-person to whom it is to be sent through post office. The name of the payee
and se" written in the money order form. Payee is the name of the person to
whom the sur sent. The money is delivered at the home of the payee.
(ii) Instant money order.
It is the facility of online transfer of money to the payee. It is very
convenient, reliable and affordable. It is a web based system through
which one can transfer amount Rs. 10000 to Rs. 50000. It is a simple
process.
(iii) International money transfer
This is a scheme which is useful to send personal remittance from abroad
to beneficiaries in India. It entertains only inward remittances into India.
There is no service for outward remittances fro India
(iv) Money Gram
The Money Gram services is available to selected post office in India. This
service was introduced in India since 29th September 2011. It facilitates
international money transfer.
(v) Electronic International Money.
This scheme was launched in February 2008. This scheme facilitates quick and
easy transfer of money between people of India and UAE. Indian post and
Emirate post jointly run this scheme through an agreement signed by them.
17. E-payment facility is not available to general public.
Ans. False.
(a) Every one has access to e-payment.
E-payment means payment transaction carried but with the help of
computer system. Any user having a PC and a browser can access the bank
website and avail of services.
(b) Direct credits.
Salary, pension, dividend on shares, interest on debentures, commission,
royalty etc. are directly credited to the bank account of a person.
(c) Direct debits.
Loan installment, school fees, insurance premium, telephone bills,
electricity bills, water bills, club membership fee, credit card dues are
directly debited to the bank account of the account holder.
: 42 :
(d) Services available at any time.

Customers can use e-payment facility at any time according to their
convenience. Customers get 24 hours and 365 days a - year services.
Customers can make transactions from residence or office or even while
travelling.
Q.3. A) Fill in the blanks by using appropriate word given in the bracket, (or)
Rewrite the following sentences by using proper substitute given in the
brackets.
1. Deposits with a commercial bank are_________ of the banks.
(a) Liabilities (b) assets (c) borrowings
2. There is no limit on the frequency of withdrawals from a
(a) Saving account (b) fixed account (c) current account
3. ________deposits are those deposits which can be withdrawn only after
maturity of the agreed time period.
(a) Demand (b) current (c) time]
4. Over draft facility given to
(a) savings account (b) Current account (c) Fixed account
5. The account suitable for creating a saving habit is
(a) current account (b)recurring account (c) saving account
6. _________ account in which the specific amount is deposited per month
regularly is known as .
(a) fixed account (b) savings account (c) recurring account]
7. The cheque which is useful in travelling is
(a) traveller's cheque (b) crossed cheque (c) over draft)
8. Customers can withdraw money from account without any notice.
(a) saving (b) current (c) fixed
9. _____is a primary function of commercial banks.
(a) purchasing and selling securities (b) accepting deposits (c) safe deposit
vault)
10. Facility of E-banking is provided through
a) telephone (b) debit cards (c) internet
11. ____is not part of the functions performed by commercial banks.
a) Accepting deposits, b) Lender of the last resort, c) Lending loans and
advances
12. Dmat account facility is useful for .
(a) retailers, (b) consumers, (c) customers dealing in sale and purchase of
shares,
13. ______deposit which receives highest rate of interest is called
(a) saving account, b) current account, c) fixed deposit account
14. Current account is operated by
(a) household (b) businessman (c) salaried people
15. Land development banks provide loans to farmers
(a) short term (b) medium term (c) long term
: 43 :
16. Commercial banks generally grant loan for __________ loan

(a) Long (b) Medium (c) Short
17. __________ provides foreign exchange for financial imports and exports
(a) Industrial bank (b) R.B.I. (c) Exim bank
18. __________ account suit salaries people
(a) Current (b) Saving (c) Recurring
19. Perishable goods are stored in _______

(a) open ground (ii) duty paid warehouse (c) cold storage warehouse.
20. In_________ importers store their goods and pay duties in installments.
a) duty paid warehouse (b) bonded warehouse (c) cold storage warehouse
21. When the goods are transported from one place to another place________
utility is create
a) Time (b) possession (c) place
22. Bonded warehouses are generally located at________
a) railway station (b) villages (c) port.
23) Bonded warehouses support ______ trade.
a) Export (b) Import (c) domestic
24. Warehouses provides ________ utility by storing goods until season arrives.
a) Time (b) place (c) possession
25. Life insurance is a contract based on the principle of
a) utmost good faith (b) subrogation (c) indemnity
26. The amount of claim for an insurance is limited to the amount of policy or the
actual a whichever is
a) more (b) less (c) insurable
27. The amount of premium depends upon the_____ of the person.
a) age (b) health (c) income
28. The contract of insurance starts as soon as________
a) Loss taken place (b) proporsal is endorsed (c) premium is paid.
29. ________is a contract between two or more than two insurance companies.
a) Reinsurance (b) Assurance (c) Double insurance
30. The principle of indemnity is not applicable to policy.
a) Marine (b) Fire insurance (c) Life insurance
31. The principle of____________ allows the insurer to enjoy all rights and claims
on the subject matter after the compensation is fully paid.
a) Assignment (b) Contribution (c) Subrogation
32. ____________ fire policy is the policy which insures goods which are spread
over.
a) Average (b) Comprehensive (c) Floating
33. ______fire policy covers different risks.
a) Replacement policy (b) Comprehensive policy (c) Adjustable policy
34. The policy which covers sea risk for a ship from the port of departure to the
port of destr is called _____________
a) Value policy (b)Voyage policy (c) Time policy
: 44 :
35. Insurable interest must exist in __________ contracts

a) Life Insurance b) Fire Insurance c) All
36. The principle which prevent the insured from making profit out of claim on
loss
(a) Principle of insurable interest (b) Principle of indemnity c) Principle of
utmost good faith
37. The contract between insured and two insurers is called
(a) Reinsurance (b) Assurance (c) Double insurance
38. In case of life insurance the insurable interest must exist
(a) at the time of taking policy
(b) at the time of event taking place
(c) at the time of taking policy and at the time of event taking place.
39. In case of fire insurance the insurable interest must exist
a) at the time of taking policy (b) at the time of event taking place (c) at the time
of taking policy and at the time of event taking place.
40. In case of marine insurance the insurable interest must exist
a) at the time of taking policy (b) at the time of event taking place (c) at the time
of taking policy and at the time of event taking places
41. Transport creates__________ utility.
a) Form (b) place (c) service
42. The ______ transport facilitates home delivery.
a) road (b) rail (c) air
43. The ______ transport is luxury but costly.
a) air (b) road (c) sea
44. The _____transport spreads air pollution.
a) air (b) road (c) sea
45. The _______transport is the cheapest transport for carrying bulky goods.
a) rail (b) air (c) sea
46. The__________ transport is the cheapest mode of transport.
a) rail (b) water (c) air
47. Canals are water ways.
a) man made (b) nature made (c) none of them
48. Indian railways are owned and managed by
a) private sector (b) government (c) joint sector
49. ___________transport is the fastest mode of transport.
a) sea (b) road (c) air
50. ________transport is the slowest mode of transport.
a) Road (b) Sea (c) Air
51. ________transport is economical for short distance.
(a) Road (b) Sea (c) Railway
52. ________transport is economical for long distance
(a) Road (b) Sea (c) Railway
53. _________ transport facilities door to door service
(a) Air(b) Water (c) Road
: 45 :
54. _________ transport is the oldest mode of transport

(a) Road (b) Air (c) Water
55. Postal services are administered by
a) Private companies (b) government of India (c) Panchayat
56. In case of urgency and to avoid delays is sent.
a) registered post (b) speed post (c) insured post
57. Indian railway is owned and managed by
a) Private sector (b) government (c) co-operative society
58. ______is used to send safe message along with enclosure.
a) Post card (b) Envelope (c) Inland letter card
59. __________is the cheapest means of written communication.
a) post card (b) inland letter (c) envelope
60. __________is the payment system under which international money transfer is
done through selected post offices in India.
a) western money transfer (b) money gram (c) money order
61. ________ provides telecom services in Delhi and Mumbai.
(a) MTNL (b) VSNL (c) Department of telecom
B) Write a word or phrase or a term which can substitute each of the following
statement
1. The account suitable for salaried people.
2. Overdraft facility is given to a certain definite account holder.
3. An account holder enjoys the privileges of any number of withdrawals.
4. An account where fixed amount is kept for a specific period.
5. A bank, which is known as banker's bank.
6. The bank which has right of monopoly of note issue in the country.
7. Loans which can be called back in one day.
8. Deposits for which generally no interest is paid.
9. Deposit which receives highest rate of interest.
10. Deposit which receives periodical payment at regular interval of time.
11. Banks which provide generally short term loans.
12. Banks which provide long term loans to industrialist.
13. Banks which provide loans at low rate of interest.
14. An insurance policy to which the principle of indemnity is not applicable.
15. Name the type of fire policy which covers risks for goods scatterd / spread
over different godowns at different places.
16. The principle of insurance which is not applicable to life insurance.
17. Name the type of policy which is based on age proof.
18. Name the party to whom the compensation to be paid by the insurance
company.
19. Name the party which enters into contract with the insured.
20. The principle which insists on mutual trust between insured and insurer.
21. Name the principle of insurance which assures compensation not more
than the_________ actual amount of loss.
22. The policy which covers risk jointly for wife and husband.
: 46 :
23. Fire policy which sticks to a specific compensation irrespective of value of

property
24. Name the fire policy which is designed to cover risks for things like rare
painting, etc.
25. Name the policy which covers risk throughout the life of the assured
26. Name the policy which covers sea risk during a particular voyage for a
specific_______ period
27. Name the life insurance policy which covers risk for a specific period
28. Document containing the terms and conditions of the contract between
insured__________ and the insurer.
29. Name the cheapest mode of transport.
30. Name the costliest mode of transport
31. Name the slowest mode of transport.
32. Name the fastest mode of transport
33. Name the most economical transport
34. Name the most economical transport for long distance
35. Name the cheapest transport for international trade.
36. Name the transport most affected by weather conditions
37. Name the cheapest mode of transport for internal (home) trade
38. Name the transport which facilitates door to door service
39. Name the transport which is most useful during crisis times like earth quake,
floods etc.
40. Name the transport which carries light and perishable goods for international
trade.
41. Name the transport which carries bulky goods for internaitonal trade.
42. Name transport which is used extensively in international trade.
43. Name the transport which carries bulky/heavy goods within the country.
44. Name the oldest mode of transport.
45. A device through which calls and messages can be sent and received.
46. An electronic letter through which the messages can be exchanged on computer
47. Name the type of warehouse required for agriculture / perishable goods.
48. Name the house where imported goods are stored once the duties are paid.
49. Name the warehouse which helps importers in paying duties in instalments.
50. Name the type of utility created by warehousing.
C) Match the Columns.
Group A Group B
1. Commercial Bank (a) holding shares of public sector banks
2. Central Bank (b) Primary function of commercial banks
3. Government (c) profit motive
4. Issuing tranveller’s cheque (d) contingent function of commercial banks
5. Giving loans (e) only accepting deposits
6. Over Draft (f) commercial bank
7. Current Deposit (g) Amount withdrawn above the actual
8. Fixed Deposit balance
9. Saving Deposit (h) less rate of interest or no rate of interests
10. Recurring Deposit (i) time deposit
11. Bills discounting (j) periodical payment
(k) Reserve Bank of India
(I) Demand deposit
: 47 :
Group A Group B
1. Warehousing (a) Private warehouse
2. Perishable goods (b) Imported goods
3. Bonded warehouse (c) Cold storage warehouse
4. Implant warehouse (d) Time utility
(e) cold storage facility
(f) Open ground
Group A Group B
(1) Life insurance (a) Fire insurance policy
(2) Premium (b) The life insurance policy
(3) Assignment of policy (c) Periodical payment
(4) Principle of sorogation (d) human life
(5) Reinsurance (e) covering risks against sickness
(6) Double insurance (f) insured taking life insurance policies
(7) Comprehensive policy with two or more than two companies
(8) Mediclaim policy (g) wide range of risks
(h) Transfer of risk by insurer to another
insurance company
Group A Group B
(1) Subject matter (a) Joint cover for all employees / society
(2) Age proof (b) Not application to life insurance
(3) Group insurance (c) Life insurance policy
(4) Contract of indemnity (d) Covering importers and exporters
(5) Floating policy (e) Human life
(6) Blanket policy (f) Endowment policy
(7) Voyage policy (g) Goods spread over different places
(h) Covers a specific trip from one port to
another port
Group A Group B
(1) Natural highway (a) air transport
(2) Home delivery (b) water transport
(3) Costly but luxury transport (c) road transport
(4) Sea transport (d) fastest transport
(5) air transport (e) slowest transport
(f) economical
(g) cheapest mode
(h) international trade

: 48 :
J. K. SHAH CLASSES S.Y.J.C. - OC
CHAPTER 3
EMERGING MODES OF BUSINESS
Q.1. Select the proper option from the options given below and rewrite the complete
sentence:
1. In e-business payments have to be made _______.
a) in cash b) on credit c) online
2. The term “e-business” is derived from the terms ______ and e-commerce.
a) e-mail b) e-pay c) cash
3. The transactions under _______ are between business firms and
consumers.
a) C to C b) B to C c) B to B
4. The process of contracting a business function to someone else is called as
______.
a) e-business b) outsourcing c) trading
5. For online transaction _____ is required.
a) trading b) registration c) business
6. The online shopper can pick and drop the things in the _______.
a) shopping mall, b) shopping cart c) shopping bag
7. An electronic facility of transferring funds through the internet is _____
transfer.
a) cash b) net banking c) credit
8. Credit or Debit Cards are popularly known as ‘______ Money’.
a) paper b) plastic c) polymer
9. In bigger shops situated in shopping malls or branded stores, there is a
_____ terminal.
a) SSL, b) POS, c) HTTP
10. Wedding Planning is an example of ______.
a) corporate organization, b) outsourcing c) buying and selling of goods
11. e-commerce is the ______ aspect of e-business.
a) manufacturing b) trading c) marketing
12. _____ process allows buyers and sellers to display information about their
goods on the web.
13. www.flipkart.com is involved in _____ e-business transactions.
14. _____ is a form of electronic currency that exists only in cyberspace.
a) Digital cash b) Credit cash c) Net banking
15. Visa / MasterCard / Amex are examples of ______.
a) Card Issuing Bank b) Payment
16. The e-business website / merchant website forward the information to the
_____.
a) Payment Processor b) Payment Gateway c) Card Association
: 49 : Emerging modes of Business

17. _______ is the virtual equivalent of physical point of sale.

a) Payment Gateway b) Payment Processor c) Card Issuing Bank
18. Between a Website and Payment Processor there is a _____.
a) Payment Gateway b) Credit card Association
c) Credit Card Issuing Bank
19. Coding of information in an online transaction begins at _____.
a) Payment Processor b) Payment Gateway c) e-business website
20. The encryption of data is done using ______ programmes /protocols
which use logical reasoning.
a) Scientific b) Mathematical c) Statistical
21. URL of a secured website begins with _____.
a) http:// b) shttp:// c) https://
22. Generally companies outsource their _____ areas.
a) Core b) non – core c) Semi – core
Q.2. Match the pairs:

Group ‘A’ Group ‘B’
a. e-business 1. cost reduction
b. B to C 2. Hyper Text Transfer Protocol
c. ATM 3. encryption
d. Payment gateway 4. electronic business
e. HTTP 5. point of sale
6. Business to consumer
7. Business to Business
8. authorize payments made onlin
9. outsourcing
10. Automatic Teller Machine
Q.3. Write the word or phrase or term which can substitute each one of the
following:
1. The term derived from the terms email and e-commerce.
2. Name the term which is used by even common man effectively while
collecting the needed information quickly.
3. Name the electronic facility of transferring funds through the internet.
4. Name the form of electronics currency that exists only in cyberspace.
5. Name the service provider which is used for payments through web.
6. Name the modern process of controlling a business function to someone else.
7. The sub – branch of e-business.
8. A well – known Payment Processor.
9. SSL stands for.
10. s-HTTP stands for.
11. This process helps in knowledge sharing between organizations.

Q.4. Distinguish between Traditional Business and e-business.

Sr. Traditional Business E-Business
No.
Concept
1 In traditional business, an Any business conducted using electronic
organizational entity (mostly media is called e-business.
thought of as a store, restaurant
or agency) is designed to offer
consumer goods and services
Access to Goods/Services
2. Consumers can visit only a few Consumers have access to countless web
traditional outlets per day. retailers at the same time.
Access to Information
3. In this form of business, Consumers have access to an unprecedented
consumers can get limited amount of product information, not just from
product information. manufacturer’s websites but also from online
reviews written by previous consumers,
employees and organization.
Price Comparison
4. Price comparison can be done It is possible to check the price offered by
for limited products in the hundreds of online merchants.
traditional form of business.
Skills required
5. In traditional form of retailing, Online retailers rely on different skill sets to
salesmanship and negotiation effectively market their product such as
skills are of utmost importance internet pop-ups, emails blast (e-mail to large
group of people), google adwords, etc.
Face-to-Face interaction
6. It is possible to have face-to-face There is a very low possibility of face-to-face
interaction in this form of interaction in this form of business.
business.
Areas covered
7. Role of middleman is There is direct communication between the
indispensable in traditional buyer and the seller on the internet which
business. eliminates the role of the middleman in e-
business.
Space
8. Physical space required in Online business does not require too much
traditional business is more as physical space.
compared to online business.
1. The term E-business is derived from e-mail and e-commerce.
or
E-business is a broader concept than E-commerce.
True.

(i) E-mail, E-commerce & E-business are inter-related concepts.

The terms E-mail, E-commerce and E-business are based on computer application
through internet. They use electronic technology to operate different activities. E-
business is raj leading industry whereas E-commerce and E-mail act as branch and
sub branch of the E business.
(ii) E-commerce is a branch of E-business.
E-commerce is a branch of E-business. E-commerce is concerned with
distribution a goods and services whereas E-business is concerned with
manufacturing goods. Thus I commerce is the trading aspect of E-business.
(iii) E-commerce, E-mail and E-commerce go together.
E-business covers the full range of business activities via E-mail and E-
commerce E-business refers to production of goods and services which is carried
out through electron^ processing and transmission of data. E-commerce refers to
all forms of trading activities d those goods which is carried out through
electronic processing.
E-mail is handled by E-business to transfer valuable information to different places
ar persons. E-mail connects E-business to various sections of the society.
(iv) E-business is a wider term than E-commerce.
E-business is a broader concept than E-commerce.
E-commerce deals exclusively distribution of goods and services whereas E-
business involves production, sale, distribution, after sale, inter firm business
transactions etc.
2. In on-line transactions 'Account' and 'Shopping cart' are password protected.
True.
(i) To prevent access to unauthorised users.
There is possibility of hackers entering into the account and misuse the same.
Password protection is offered to check illegal entry of hackers.
(ii) Security.
Unlike traditional business, the buyer and seller do not see each other while doing
business Anybody who is an expert in application of computer technology can
easily enter and misuse shopping cart. Therefore password protection is
necessary.
(iii) Impersonification.
E-business identity the person only in terms of numbers and names.
Anybody can visit the site in disguise as a customer and misuse the site. They
can enter into the account of the customer and play a spoil game. Therefore it is
necessary to keep pass words.
(iv) E-business requires plenty of resources.
Traditional business can be started by anybody who has sufficient capital. E-
business requires technical resources other than money. In the absence of availability of
such resources it is difficult to implement E-business. The success depends upon the
efficiency of computer professional and technical experts.

(iv) Computer Hardware.

The primary requirement which is most essential for the operation of E-
business is the ' availability of computer Hardware. The system must provide
adequate speed and memory so as to meet the growing volume of business
transactions.
(v) Hardware professionals with suitable qualifications.
There must be an army of highly skilled technical staff who are well versed
with internet operations. They should be well trained in the art of handling
trade enquires, contacting customers and book orders through internet. In the
absence of well trained and adequate staff, it is impossible to implement E-
business.
(vi) Comprehensive web-site.
One more important requirement is setting up of a comprehensive website. The
company requires to keep communication with various sections like customers,
suppliers, dealers, employees, government etc. The website facilitates all such
communication. If the website does not work, the business has to be closed
down.
(vii) Facility of tele-communication.
Tele-communication is a pre-requirement for implementation of E-business. E-
business should be connected to effective telecommunication system to ensure
smooth operation. In the absence of adequate and effective telephone lines and
internet facilities, the E-business cannot succeed.
(viii) Reliable Payment System.
E-business needs to be supported by an effective and efficient system of payment.
Payments are received and paid. The system should facilitate both the services
smoothly. The customer makes electronic payments for settlement of orders. If the
system goes defective, E-business will have to be closed down.
3. It is easy to set up E-business as compared to traditional business
True.
REASONS :
- Unlike a host of procedural requirements for setting up an industry, e-
business is relatively easy to start.
- The initial investment for stating up an business is generally lower than the
costs associated with starting an equivalent business using a traditional
model.
- Online sellers are able to reduce their overheads as they don’t need
expensive shop fronts, too many employees or large inventory on hand.
- E-business does not require physical space. It requires qualified technical
professionals. Thus, it is easy to set up e-business as compared to traditional
business.

4. E-business allows you to work across the globe in any field.

True.
(i) Global presence.
E-business facilitates global contacts. It is possible to reach partners, agents, distributors
globally. The most important benefit is to reach customers from any part of the world.
It helps businessman to expand global market.
(ii) No Intermediaries.
E-business facilitates direct contacts with the customers and dealers. The customer from
any country can contact businessman without the help of agents. Thus it keeps
middle men away and saves money. Websites are loaded with simple instructions and
sufficient directions to guide the customer.
(iii) Customer service.
The outstanding service provided by E-business is quick response. All queries from
part of the world will be responded quickly and information reaches faster.
Students can contact universities. Tourists can contact guides and book tickets.
Hospitals can be contacted for any kind of medical treatment.
(iv) Technology Transfer.
E-business has become the most convenient tool to effect foreign collaboration. Ind"
businessman can contact foreign firms and acquire technology.
(v) Foreign trade.
Exports can contact their customers through internet. They can contact every
customer individually and look after their specific requirements. Importers can easily
contact sour and collect necessary information regarding products, manufacturers,
prices and terms and conditions. Both importers and exporters can make electronic
payments through internet.
5. Credit Cards are used for cash payments.

- This statement is FALSE.
(Credit cards are used for making credit payments.)
REASONS:
- Credit Cards are also known as Plastic money. These are generally issued by banks
to their customers.
- Credit Cards can be used for making online payments as there is no physical
exchange of cash over the internet. Credit cards are also used at restaurants, retail
outlets or stores.
- The payment made through credit card is usually authorized by the card issuing
bank by way of a fully secured payment mechanism.
- Unlike, when using debit cards, where the amount gets debited from the account,
here the payment is made by the card issuing bank on the customer’s behalf. The
bank generally gives a month’s credit period to the cardholder to pay the credit
amount.
- The card holder can later make the payment to the bank either in full or in
installments.
- The advantage of credit card is the person can use his card even if he does not have
money in his pocket or in his bank account. They are the replacement for currency
notes.
- Therefore, credit cards are used for making credit payments and not cash
payments.

CHAPTER 4
SOCIAL RESPONSIBILITY OF BUSINESS
Q.1. Distinguish Between: - Traditional Social Responsibility & Corporate
Social Responsibility
Sr. Basic of Traditional Social Corporate Social
No. Difference Responsibility Responsibility
1. Meaning It refers to help poor through It refers to commitment
profit made by business. business to contribute
economic development.
2. Evolution It is evolved in ancient India It is evolved after World War II.
and Pre-Christian Era
3. Concept It has philanthropic concept It refers to ethical, legal and
economic concept also.
4. Scope It is restricted at individual In considers economy as a
level. whole.
5. Type It is primitive a narrow It is global and wider approach
approach
6. Goals It has not considered It has considered tangible as
intangible goals. well as intangible goals.
7. Nature of Business firm adopting Business firms adopting
firms traditional social corporate social responsibility
responsibility are generally are generally large firms
smaller firms. including MNCs.
8. Area This concept is operated at This concept is operated at
Coverage local level because it is national and international level
adopted by small firms. as it is adopted by large firms.
Q. 2. State with reasons whether the following statements are true or false.
1. The business is part of society.

Ans. True.
(i) Business acts as a trustee of society.
Business acts as a trustee of society. This is because it is one of the most
important elements of society. Therefore it must discharge its obligations towards
various sections of the society. It is the duty of the enterprise to protect the interest
of the members of I society.
(ii) Business serves society.
Business provides goods and services to the society which are demanded by the
socieJ If there is change in expectation of society, business should provide goods
and servia accordingly. Otherwise profit of business organisation will disappear.
: 55 : Social Res. Of Business

(iii) Public Image :

Business organisations try to maintain their standard in order to create goodwill
and image in society. For this purpose business organisation takes care of every
element of society, (e.g.) They look after workers by giving fair wages and non-
monetary benefits and take care of consumer by providing better quality of goods
at reasonable prices which may increase their standard of living etc. This will
enhance their image.
(iv) Broader outlook.
A business organisation has to look after the welfare of various interest groups such
as shareholders, customers, employees, suppliers, creditors etc. A socially
responsible organisation is in a position to work for the interest of all of them rather
than serving a small segment of the society.
2. Tangible goal of earning profit is the sole objective of business.

Ans. False.
(i) Profit is not the only objective.
Modern business firms do not aim at profit alone. Besides profit they like to earn
goodwill and reputation. Therefore they are more concerned about their social
responsibilities.
(ii) Corporate governance.
The modern firms are very much interested in maintaining corporate governance.
They want to be more responsible and more accountable business units. They believe in
honesty and transparency. They want to adopt a open minded policy.
(iii) Human rights responsibility.
The corporate sector respects ethical values in terms of human rights. They
want to ensure fair wages and other monetary incentives to workers. They take
efforts to avoid unfair treatment and exploitation of workers.
(iv) Protection of consumer rights.
All business activities centre around consumers. Consumers are vital section
of the society whose behaviour determines the future of the business
organisation. Corporate governance can check such anti-consumer stand and
promote the welfare of the consumers.
(v) Socio Economic activities.
Business activities are now considered as socio-economic activities. Therefore,
the sole aim of the business organization is not maximizing profit. The business
organizations have social responsibility.
3. Business organization can participate in solving complex social problems.

Ans. True.
(i) Creates employment opportunities :
The business organization should create employment opportunities and provide
better life to the society.

(ii) Prevents pollution:

The organization should prevent environmental pollution by taking the necessary
preventive. measures and maintain ecological balance.
(iii) Financial help to social and cultural activities :
The organisation provides financial help to social and cultural activities by
contributing towards society for education, primary health care, population
control and rural development.
(iv) Development of rural area :
The business organisation should try to promote and develop small scale
industrie rural area and also labor oriented industries in rural area. Thus it
should help in developr of underdeveloped areas.
(v) Prevent overpopulation in the cities :
The business organisation should set up industries in different areas, which may a\
over population in big cities.
4. Business should not disclose their records to investors.

Ans. False.
Commitment to corporate governance.
Companies must ensure a fair degree of corporate governance in their behaviour. Corp
governance refers to open and honest policy in running company in the interest
shareholders.
(i) Financial responsibility.
The companies are subject to financial accountability. They should not indulge in
corpracatices. They should submit standard financial report to shareholders and
governr
(ii) Periodic information :
The company should arrange proper communication facility to inform the
shareholder about all developments of the company.
(iv) Proper disclosure:
The management is expected to maintain proper accounts which are duly
audited time to time. There should be high degree of transparency in such
matters. Even shareholder must get a copy of balance sheet of the company
along with the details profit and loss account.
(v) Proper system of accounting :
It must not prepare manipulated accounts with suppressed profit in order to
deny on reduce dividends to the shareholders. It should not falsify the accounts
to escape the burden
5. Business organisation is not liable to control pollution.
Ans. False.
(i) Environment responsibility.
This is one of the important aspects of corporate social responsibility. The
companies must have a suitable policy in with regard to carbon emissions and
reduction. They should show responsibility to maintain sustainable growth. It
is their duty to build a pollution free society.
(ii) Management of waste water

Every businessman must carefully handle the residuals like waste water so
that they do not contribute to health hazards
(iii) Generation of renewable energy
Businessman must come forward to invest huge capital to generate energy
by planting wind mills and solar units. This will go a long. way tosatisfy
our energy needs besides making the country pollution free.
(iv) Pollution control measures.
It is the duty of the businessman to follow all the norms of pollution control. He must
set up adequate pollution control units so that all pollutants are properly treated
before they are released.
(v) It is their obligation to protect environment.
Business utilises all types of resources available on earth. The resources of the
gift of nature. Therefore it is their turn to take all possible efforts to protect
environment.
6. Business organisation cannot contribute to raise standard of living of society.
Ans. False
(i) Production of harmless goods.
A producer must produce and supply those goods which are environmentally
free. He must avoid supplying goods which will harm the society by bringing
environmental degradation. It will improves standard of living.
(ii) Creates employment opportunities :
The business organisation should create employment opportunities and provide
better life to the society.
iii) Fair wages :
The organisation should pay fair wages and allowances to the employees.
Employees should be given allowances like medical facilities, bonus, educational
allowances, travelling allowance. There should be regular increment and revision
in salary and wages.
iv) Development of rural area :
The business organisation should try to promote and develop small scale
industries in rural area and also labor oriented industries in rural area. Thus it
should help in development of underdeveloped areas.
v) Prevent overpopulation in the cities :
The business organisation should set up industries in different areas, which may
avoid overpopulation in big cities.
7. Ethics is a branch of politics.
Ans. False.
(i) A branch of social science.
Ethics is a branch of social service which is concerned with the moral behaviour.
It tells us what is good and bad. It guides us what to do and what not to do.
(ii) It is concerned with moral values.
Ethics is a system which prescribes moral values. It provides moral guidelines to
give a good charactorto human being including businessman.
The term ethics is derived from greek word 'Ethos' which means charactor.
Thus it is moral science which is a branch of social science.
(iii) Business ethics is concerned with morality in business activities.
Business ethics suggests rules or standards which a businessman must follows in
order to maintain a good conduct or charactor. It is also concerned with corporate
ethics which is"to be followed by professionals and businessman. Thus it is
concerned with moral values and not politics.
(iv) Business ethics is a code of contact
Business ethics is a code of conduct which is to be adopted by
businessman. It specifies what should be done and what should be
avoided for the welfare of the society. It creates a healthy and competitive
business atmosphere.
8. Business ethic is applicable to all business organisation.

or
Every business organisation should pay attention to business ethics while
conducting their activities.
Ans. True.
(i) Business ethics must be followed by every businessman.
Business ethics refers to the code of conduct which every businessman
which expect to follow. It is necessary to maintain harmonious relationship
with all sections of I society.
(ii) Small as well as big business must adopt moral principles.
Business ethics is the common moral principle which is to be adopted by
every business whether it is small scale or large scale. A business man can
create a healthy a competitive business atmoshpere only by respecting
moral values
(iii) Business ethics is a globlal principle.
Business ethics is not restricted to a particular business man or a particular
country. Ethical principles are applicable to all presence and organisations. All
types of organisation whether sole trader or partnership, co-operative or joint
stock company, small or big. Asian company or American company every one
has to follow ethical principles.
(iv) Business ethics serves all the sections.
Ethics insists on fair treatment to all section of the society. It assures equal
importance to consumers, workers, shareholders, investors, government and
society. Therefore every businessman recognises and respects business ethics.
(v) Business ethics guides all the businessmen.
Ethics provides guidelines for businessmen as how to frame their business
policies in accordance with the values existing in the society.

9. Providing career opportunities to employees is the responsibility of business.

Ans. This statement is TRUE.
Reasons:
a) Providing career opportunities to employees is the responsibility of
business.
b) Employees are the human resources of an organization.
c) They must be treated with dignity and respect.
d) Mutual trust and confidence on employees will bring success to
managerial goals.
e) Business should offer adequate opportunities of promotion to their
talented employees.
f) They should provide the employees with proper information about
qualifications, skills, and experience required to obtain promotion.
g) They should increase awareness among the employees so that employees
will be motivated to take the efforts.
h) Employees with talent should be provided with career opportunities.
i) Organization should aim at all round development of personality.
j) Organization should aim at all round development of personality.
Therefore, providing career opportunities to employees is the responsibility of
business organization.
10. Management should avoid workers, participation while taking decisions.

Ans.: This statement is FALSE.
Reasons:
a) Management should encourage workers’ participation while taking
business decisions.
b) Employees are the human resources of an organization.
c) They must be treated with dignity and respect.
d) Workers should be encouraged to participate in the management.
e) Workers are the people who face day to day problems arising in the
functioning of company. So, they are well aware of these problems.
Therefore, they are the right people to find practical solutions to these
problems.
f) Schemes such as common suggestion system for cost saving, quality,
circles, profit sharing, co-partnership should be introduced, so as to
encourage workers’ participation in the decision making process.
g) It will help to raise the morale of the employees.
h) It will help to create a sense of belongingness with the organization.
i) It will help create cordial labour-management relations.
j) Mutual trust and confidence in employees will enable to achieve
managerial goals.

11. Expectation of society and public towards business are changing.

Ans.: This statement is TRUE.
Reasons:
a) Expectation of society and public towards business are changing.
b) World is changing, growing, and expanding rapidly.
c) Business must operate as per expectations of society.
d) Over the years, social demands have changed and business has to respond
positively to the changes.
e) Public and society are becoming aware of their rights.
f) They expect business organizations to protects and promote their rights.
g) Overall knowledge level of public and society is also increasing.
h) Business organization should not do anything that is harmful to the
society.
i) Expectations of society and public towards business are changing and
business has to meet their expectation.
12. Business ethics can be considered as a tool for social development.

Reasons:
a) Business ethics is a code of conduct evolved for regulating the activities of
business towards society and other business units.
b) Business ethics is a relative term. It is different in every country.
c) Business ethics is applicable to all business organizations.
d) It protects interest of all the constituents of the society i.e. consumers,
investors, employees, etc.
e) It creates a healthy and competitive business atmosphere.
f) It specifies what should be done and what should be avoided for the
welfare of the society.
g) It involves fair treatment with the consumers, workers, suppliers,
shareholders, government, competitors and the entire community.
h) It promotes honesty, sincerity, fairness, and justice in business dealings.
i) Business ethics defines the social, legal, cultural and economics limits
within which business organizations have to plan and conduct their
activities.
j) It guides the business organization to formulate the business policies in a
justified manner.
Thus, business ethics practiced by businessmen in the right spirit can be
considered as a tool for social development.
13. Business organization can use natural resources as they want.

Ans.: This statement is FALSE.
Reasons:
a) Business organizations cannot use natural resources as they want.
b) Business organizations operates within the society.
c) They use the natural resources of the society.

d) They should make proper use of the country’s natural resources.
e) There should be optimum utilization of the resources.
f) As supply of natural resources is limited, their wastage should be avoided.
g) The available resources should be used for the benefit of society.
h) They should extract resources in limited quantity.
i) Damage to environment should be avoided while utilizing the natural
resources.
j) Through proper use of resources the business organization can take care
of the welfare of society.
14. Role of media exerts major influence on business organization.

Reasons:
a) Role of media exerts a major influence on business organization.
b) Media plays a very important role in public life.
c) Reach of media to common people is very easy.
d) Media is very powerful and it can speak against wrong policies of business.
e) It can raise its voice against business malpractices and consumer exploitation.
f) Television channels, radio, newspapers can give publicity to unfair
practices.
g) Media is very vibrant and active.
h) Media can easily influence the masses in the society.
i) Business organizations should fulfill their social responsibilities.
j) They should not ignore social values.
Therefore, it is rightly said that media exerts major influence on business
organization.
15. Business organization is not liable to control pollution.

Ans.: This statements is FALSE.
Reasons:
a) Business organization is liable to control pollution as working of business
units result in pollution of air, water, and noise.
b) The carbon particles, dust, harmful gases, chemicals create air pollution.
c) Harmful chemicals drained in water resources causes water
contamination.
d) Sound of machines in the factories can cause noise pollution.
e) Extraction of natural resources cause damage to eco-system.
f) Smoke emitted from the factories causes air pollution.
g) They should adopt eco-friendly products.
h) They should introduce eco-friendly manufacturing process, use renewable
and clean source of energy.
i) They should follow highest standards of packaging.
j) Business organizations should invest in renewable energy projects.
k) They should aim at reducing carbon emissions.

l) Business is a part of society. Therefore, it cannot ignore its responsibility
of protecting environment.
Thus business organizations are liable to control pollution.
16. Introducing Environment Management techniques benefit business

organization.
Reasons:
a) Introducing Environment Management techniques benefit business
organization.
b) Environmental Management System (EMS)is a document developed by
business organization to assess their environmental impact and improve
efficiency.
c) ISO 140001 -2004 is an environmental management standard.
d) It specifies a set of environmental management requirements.
e) The purpose of this standard is to help all types of organizations to protect
the environment, to prevent pollution, and to improve their
environmental performance.
f) ISO 14005-2010 EMS which has been recently introduced provides
guidelines for the phased implementation of EMS including use of
environmental performance evaluation.
g) ISO 14006 – 2011 EMS provides guidelines for incorporating eco-design.
Thus EMS is beneficial to a business organization as the organization can
make a difference by reducing the impact of their products and services
on environment from process of design, materials used, packaging,
delivering, marketing, disposal, etc.
17. Business and environmental protection are contradictory.

Reasons:
a) Business and environmental protection seems to be contradictory.
b) Rapid industrialization has placed tremendous burden on natural
resources.
c) Environmental components i.e. air, water, and land have been polluted.
d) Industrialization has resulted in
i) Increase in pollution ii) Increase in transportation
iii) Growing consumer economy iv) Increase in population
v) Unrestricted extraction of resources.
e) Though business and environmental protection seem to be contradictory,
rules should be framed in a proper manner.
f) It should be able to satisfy environmentalists as well as industrialists.
g) Growth of business is essentially important and so is protection of
environment also.
h) Rules should be strong enough to protect environment.

i) At the same time rues should not hurt the progress of business.
Q.3. A) Select the proper option from the options given below and rewrite the
sentences.
1. Regular and prompt payment of wages is the responsibility towards .
(a) government (b) shareholders (c) employees
2. Businessman should always respect
(a) manufacturer (b) customer (c) retailer
3. A business organization should supply commodity of ______ quality to
their customers.
(a) inferior (b) low (c) good
4. Social responsiblities of commercial organisation towards employees adopt
_____ in the interest of the group.
a) fair wages, b) low wages, c) unfair rewards
5. Businessmen are of the society.
a) representative, b) servants, c) trustees
6. Regular and prompt payment of taxes is the responsibility of business
towards.
(a) customers (b) government (c) shareholders
7. To maintain industrial peace is the responsibility of .
(a) businessmen (b) government (c) shareholders
8. Business is a _________ activity
a) service (b) socio-economic (c) profit
9. A business organisation is part of .
(a) industry (b) governemnt (c) society
10. To earn profit is the objective of the business organisation.
(a) social (b) economic (c) moral
11. Business organisations should supply goods of quality to their
customers.
a) inferior (b) superior (c) medium
12. In modern business environment, _______ provides more opportunities and
challenges
a) Privatisation (b) Globalisation (c) specialisation.
13. Business organisation should try to make _________ utilisation of natural
resources.
a) minimum (b) maximum (c) optimum
14. Location of industries should be in zones.
a) Residential (b) Industrial (c) commercial
15. For economic growth and national security, ________ stability is required.
a) Political (b) Social (c) Natural
16. Business organisation is a part of
a) Industry (b) Government (c) Society

17. Ultimate goal of business must be satisfaction of

a) Shareholders (b) Consumers (c) Owners
18. To maintain industrial peace is the responsibility of organisation towards
a) Customers (b) Employees (c) Society
19. Business or organisation should protect health and provide safety measures
to_______
a) Employees (b) Shareholder (c) Customers
20. Business organisation can maximize profitable by wastage.
a) Ignoring (b) utilising (c) minimising.
21. Business should provide periodic information to
a) Customers (b) Owners (c) Employees
22. Business ethics refers to the system of principles.
(a) Economic (b) Social (c) moral
23. Business ethics is a structural examination of behaviour of people.
a) moral (b) critical (c) economical
24. Business organisation should not create ______ profit
(a) Reasonable (b) Secret (c) Maximum
25. Business organisation should avoid creation of
(a) trade union (b) consumer’s cell (c) monopoly
26. Environmental Management System is mandatory in
(a) India (b) USA (c) China
27. Environmental Mangement System which provides guidelines for incorporating
eco-design is __________
(a) ISO 14001-2004 (b) ISO 14005-2010 (c) ISO 14006 – 2011
B. Match the pairs from group A with Group B

Group A Group B
(i) Economic objective (a) To increase social welfare
(ii) Business ethics (b) Fair wages
(iii) Pollution control (c) To earn profit
(iv) Employees (d) Branch of social science
(v) Obligation to government (e) Social Responsibility
(vi) Social responsibility (f) Regular payment of taxes
(vii) Fair Price (g) consumer
(viii) Protection of Environment (h) Responsibility towards society
(ix) Responsibility to Investors (i) to maintain transparency


CHAPTER 5
CONSUMER PROTECTION
Q.1. State with the reasons whether the following statements are true or false.
1. Consumer Movement aims at the protection of consumer interest.
(or) Consumer protection act is the blessing for the consumers.
(or) Main object of consumer movement is to protect the rights of the consumers.
Ans. True.
(a) To put pressure on business community.
Consumer movement started to protect consumer interest in the market by putting
consumers pressure on business community. The Consumer Protection Act. 1986 was
passed in the interest of the consumers.
(b) To create awareness.
Consumer movement enables consumers to have better knowledge and information
regarding the price structure, sizes, designs and quality of the various products
available in the market Consumer protection Act creates awareness about basic rights
like right to choose, safety choice, to be heard, redress etc. among consumers.
(c) To fight for consumer justice.
Individually the capacity of a consumer is limited to fight and get justice. Consumer
protectic-act will help the consumer to get quick justice and protect all his rights.
Consumer organisation! can provide a supporting hand in matters like filing cases,
guidance and advice in facing lega disputes etc.
(d) To protect consumers from exploitation.
Consumers are exploited and cheated through malpractices and advertising. Most of
the consumers in countries like India are ignorant and illiterates who have no idea of
consume rights. Consumer organisation effectively uses the consumer protection Act
to protect such consumers from great injustice and large scale exploitation.
(e) To assure fair treatment.
Many household appliances, equipment, electrical and mechanical devices sold in the
market are defective in functioning. Consumer movement aims at helping such
customers.
2. Consumer movement is a political movement.
Ans. False.
(a) Social movement.
Consumer movement is a social movement aiming at creating awareness among
consumers who have no knowledge of their rights. Its main objective is to fight for
the rights of the of consumers. It is not a political movement.
(b) Legal assistance.
The movement helps the consumer to fight and get justice through legal links. It helps
them in filing cases, facing legal disputes etc. Thus there is clear objective of
consumer welfare.
: 66: Consumer Protection
There is no political ambition in such a social movement.

(c) To put pressure on government.
Consumer movement in India has put pressure on government to introduce various
legislative measures to protect consumer rights. The consumer protection Act 1986 has
been introduced exclusively for the protection of consumer rights in India.
(d) To promote consumer welfare.
Consumer movement is purely a movement for consumer welfare. There is
absolutely no interference of any political party or political person in such a
consumer based movement.
(e) To spread consumer education.
Consumer movement is concerned with spreading knowledge of consumer rights. It
aims at educating consumers about their rights.
3. The Consumer Protection Act was passed in the interest of sellers.
(OR) Consumers have been given no rights in India.
(OR) Consumer protection Act provides protection to the sellers.
Ans. False.
The Consumer act in India has been passed to protect the rights of consumer and to
promote their welfare.
According Consumer Protection Act 1986, following are the consumer rights :
(i) The right to safety.
This is the right to protect consumer from the evil effects of hazardous goods
and services. The goods and services marketed should protect long term life
interest besides serving the present needs.
Consumers must insist on the quality of life as well as on the guarantee of the
products and services.
(ii) Right to be informed.
This is the right to be informed about the quality, quantity, potency, purity,
standard and price of goods so as to protect the consumers against unfair trade
practices.
(iii) Right to choice.
This is right to have access to variety of goods and services at competitive price.
When a consumer is given option of the products of varying qualities, prices,
sizes and designs he enjoys the freedom to choose the best among them
according to his needs and capacity.
(iv) Right to be heard.
This is the right to listen to consumer's disputes and to assure justice through
various fours.
(v) Right to consumer education.
This is the right to provide necessary education and create awareness and
understanding the market economy. Ignorance and lack of awareness among
the consumers are the m factors responsible for exploitation. They should
know their rights and exercise them.

(vi) The right to redress.

The manufacturer should recognise and readily redress the genuine claims and
grievances' the consumer. The consumer must be compensated for misrepresentation
or unsatisfact services. The defective product must be repaired, replaced or taken
back by the seller.
Thus consumer protection act has been passed with the main objective of
protective interest of the consumers.
4. In India consumer movement is not necessary.

Ans. False
In India consumer movement is necessary.
(a) To protect consumer rights.
Consumer organisation can play a vital role in protecting consumer rights by
influencing consumer behaviour in several respects. Since consumer
organisations are organised at the community level, they can make the
movement a success through collective action.
(b) To extent legal service.
Individually the capacity of a consumer is limited to fight and get justice.
Consumer organises can provide a supporting hand in matters like filing cases,
guidance and advice in facing disputes etc. This will help the consumer to
get quick justice.
(c) To spread consumer education.
Consumer movement can also spread consumer education. They can play an
effective role in creating awareness among consumers and make them understand
the need to fight for consum rights.
(d) To protect consumers from hazardous products.
Unlike western countries, there are no effective laws to protect Indian
consumers from sophisticated but hazardous products and equipments.
Many household appliance equipment, electrical and mechanical devices sold
in the market are defective in functional Use of such products may result in
serious injuries or may result in death. Most of such victims in India are
women and children. Consumer organisations fight for their rights.
(e) To fight against pollution.
Most of the industries in the fields of chemical, fertilizer and refinery do not
follow adequall safety measures resulting air, water and food pollution.
Consumer organisations can take such issues and fight for protection of
consumers from pollution.
(f) To fight against unfair trade practices.
Big firms involve in deceptive and unfair trade practices to cheat and exploit
innocent consumer. Consumer organisation educate consumers about their rights
and help them to protect agaff business malpractices and frauds.

5. The government alone is fighting for consumer protection.

Ans. False.
Government has introduced various acts to protect consumer rights. However there are va~
other organisations which are fighting for consumer rights.
1. Business Associations.
Business associations like Federation of Indian Chambers of commerce and
industry (FIO and Confederation of Indian Industry (CII) have framed code of
conduct to be followed by i firms in trade practices.
They prescribe well defined guidelines to be followed in looking after
grievences of t consumers and recognising consumer rights.
2. Role of NGOs. .
If the consumers are aware of their rights it is difficult to exploit them. Many
social organisations (NGOs) take interest in educating consumers about their
rights. They spreao awareness among consumers and guide them how to fight
for rights. Self-help is best device to keep away all forms of exploitation.
3. Consumer organisations.
The consumer organisations in India started appearing since 1915. The first
consumer organisation called Passengers and Traffic Relief Association was forward
in 1915. Its major objective is to check quality of food items and consumer
durables
At present there are more than 500 consumer organisations functioning in India.
Following are some of the important organisations.
Following are some of the important consumer organisations formed at the national
level
(i) Consumer Guidance Society of India. (CGSI).
(ii) Council for fair business practices. (CFP)
(iii) Consumer Action Group (CAG).
(iv) Bombay Telephone users Association (BTUA).
(v) Confederation of Indian Consumer Organisations (CICO).
(vi) Consumer co-ordination Council (CCC).
4. LokAdalat.
Lok Adalat referred as People's Court is established by the government to settle
disputes by compromise. It is held by state Authority, District authority,
Supreme court Legal Services Committee, High Court Legal Service Committee
orTaluka Legal Service. It accepts pending cases in the regular courts and solves
disputes by compromise. The affected consumer can directly present his
grievence to a LokAdalat. It charges no coart fee. Thus it saves money and time.
This system is speedy and economical.
6. Consumer being the king of the market does not have any responsibilities.
Ans .False.
Consumer has several responsibilities.
1. Consumers should show environment friendly attitude.
Consumers should respect environment and put all possible efforts to create
environment awareness among others. They should co-ordinate with others to
create a pollution free society. They should put pressure on industrialists to

adopt adequate safety measures to avoid air, water and sound pollution.
2. Spreading consumer education.
Consumer movement can also spread consumer education. They can play an
effective role in creating awareness among consumers and make them
understand the need to fight for consumer rights.
They involve in various kinds of activities such as seminars, conferences,
workshops, public meetings, street plays, counselling, demonstrations and
exhibition to spread awareness.
3. Checking defective and unfair trade practices.
` Big firms involve in deceptive and unfair trade practices to cheat and exploit
innocent consumers. Consumer organisations educate consumers about their
rights and help them to protect against business malpractices and frauds.
Consumer organisation can play an useful role in moulding the consumer
behaviour in the right direction.
4. Consumer must exercise their rights.
Every consumer must aware of his rights and come forward to exercise his rights
whenever and wherever required. The consumer protection act 1986
provides rights and responsibilities to consumers. The consumer rights will
deliver benefits only when the consumer himself exercise such rights. He must
choose the commodity, according to his likes and dislikes. If he is not satisfied
with the quality of the product, he must immediately protest and exercise
his right to protect him.
5. Insists on issue of receipts/cash memo.
Most of the consumers do not show interest in collecting bills or cash memo.
Every consumer must insist on the issue of cash memo or receipts for the
goods delivered. Even for a product of small value, cash memo must be issued.
They will act as legal documents to file cases if the products turn out to be
defective or duplicate later. It will also put pressure on the seller to be more
quality conscious.
7. Lok Adalat can be rightly described as people’s court

Ans.:This statement is TRUE.
Reasons:
a. Lok Adalat can be rightly described as people’s court.
b. Lok Adalat is established by the government to settle disputes by
compromise.
c. It is a mock court held by State / District authority, Supreme Court / High
Court / Taluka Legal Service committee.
d. It accepts cases pending in regular courts.
e. The cases are settled on the basis of compromise.
f. Both the parties have to agree to transfer the case to Lok Adalat from the
regular court.

g. No court fee is charged.

h. If the matter is not resolved by Lok Adalat, then it is referred back to the
regular court.
i. Resolution of disputes by Lok Adalat gets Statutory recognition.
j. Railways, Telephones, Electricity Boards also hold Lok Adalat.
8. Order issued by District Forum on a complaint is final

Ans. This statement is FALSE
Reasons:
a. Order issued by District Forum on the complain is not final.
b. The consumer Protection Act was passed in the Parliament.
c. It is a quasi-judiciary machinery for redressing consumer grievances.
d. A three tier machinery has been established.

i) District Forum ii) State Commission iii) National Commission.
e. The District Forum is established by the State government in every
district.
f. It entertains complaints where value of goods and services and the
compensation if any does not exceed Rs.20 lakhs.
g. A person who does not agree with the orders of District Forum can file an
appeal against the order to the state commission within 30 days of the
order.
h. A person aggrieved with the decision of State Commission can file an
appeal to the National Commission within 30 days from the order.
i. If consumer is dissatisfied with the order of national commission. He can
appeal to supreme court within 30 days of such order.
Therefore the above statement that the order issued by District Forum on
a complaint is final is false.

sentences.
1. District forum will entertain complains for which the value of goods or
services and the compensation does not exceed rupees_______ .
(a) Rs. 20 lakhs (b) Rs. I crore (c) Rs. 10 lakhs
2. State commission will entertain complains for which the value of goods or
services and the compensation does not exceed rupees_______________.
(a) Rs. 10 lakhs (b) Rs. I crore (c) Rs. 20 lakhs
3. National commission will entertain complains for which the value of
goods or services and the compensation exceeds rupees____________.
(a) Rs. 2 crores (b) Rs. I crore (c) Rs. 20 lakhs
4. The chairman/head of the District Forum is a _____________
(a) District judge (b) Central minister of law (c) Supreme court judge
5. The Chairman of the National Commission is a___________.
(a) Supreme court judge (b) High court judge (c) District judge
6. The consumer protection Act came into force on___________
(a) 15th April 1986 (b) 15th April 1987 (c) 1st April 1986
7. A person who is not satisfied with the order of National Commission can
go for appeal to_____________
(a) President of India (b) Supreme court (c) Government of India
8. The maximum period of membership of the District Forum is___________.
(a) two (b) three (c) five
9. Consumer movement is_________ in nature.
(a) political (b) religious (c) social
10. The tenture of Central Consumer Protection Council is_______ years.
(a) five (b) four (c) three (March 09)
11. National commission is established by___________.
(a) Central Government (b) State Goverment (c) Zilla Parishad)
12. State Commission is established by______________
(a) central government (b) state government (c) supreme court
13. District forum is established by__________________
(a) central government (b) state goverment (c) district collector
14. Consumer protection Act 1986 provides a _____ system to look after the
complaints of consumers.
a) two tier (b) three tier (c) five tier
15. Consumer protection act was passed in the year_____________
a) 1985 (b) 1986(c) 1987
16. ______is the Father of consumer movement.
a) Mahatma Gandhi (b) Ralph Nader (c) John F- Kennedy
17. ______ is the first country to start country to start consumer movement.
a) U.S.A. (b) Japan (c) Briton
18. In the modern competitive market, consumer is regarded as____________

(a) King (b) servant (c) slave
19. Under the consumer protection act 1986, there is a_________quasi judicial
consumer redressal machinary for solving the complaints of the
consumers.
a) Tow-tier (b) Five - tier (c) Three tier
20. Amendments were introduced to Consumer Protection Act in the year
1993 and_______
a) 1998 b) 2000 c) 2002
21. Any person who does not agree with the decision of State Commission
can appeal to the____________
a) Supreme Court (b) High Court (c) National commission
22. Right to ________ restricts monopolistic tendencies in the market.
a) information (b) choose (c) safety
23. The Government has established__________to settle the consumer disputes
by compromise.
a) Lok Adalat (b) District forum (c) Supreme court
24. National Commission has __________members in addition to the
president.
a) 2 (b) 3 (c) 4
B. Write a word or a phrase or a term which can be suitable for each one of the
following statements.
1) State the name of commission which settles the claims of the consumers of
more than Rs. 1 crore.
less than crore but more than 20 lakhs.
less than 20 lakhs.
4) The right of a consumer which allows him to express his views.
5) The right of a consumer which creates an awareness in him about his
rights.
6) Non-profit non-political independent groups working for a definit cause.
C. Match the pairs from group A with group 'B’

A B
(i) National Commission Chairman (a) King of the market
(ii) Three tier system (b) National Commission
(iii) Consumer movement in India (c) Consumer disputes redressal agencies
(iv) Consumer Protection Act. (d) 1986
(v) State commission (e) 1920
(vi) District Forum (f) Supreme Court Judges
(vii) Consumer (g) District Judge
(viii) Consumer movement (h) Complaints valued above 20 lakhs and
(ix) Mumbai Grahak Panchayat upto 1 crore
(i) 1960
(j) NGO

CHAPTER 6
PRINCIPLES OF MANAGEMENT
Q.1. A State with reasons whether the following statements are true or false.
1. Taylor is called the father of scientific managements.
Ans. True.
(i) Taylor introduced scientific methods.
Fredrick Winsloco Taylor, an American engineer is the first expert who
advocated scientfo methods of management. According to him every
element or movement of work and the performance of the worker must be
scientifically analysed. This will help to frame a scientific approach in
determining standard time, standard method of doing work with
maximum efficiency.
(ii) Taylor favoured science to tradition.
Taylor never favoured traditional methods of management. According to him
the decisiom of how to produce and how much to produce should not be
decided on the basis of will and wish of the manager. The manager must
adopt a scientific approach to determine standard time, production target
and how many workers required to complete the job etc.
(iii) Observations and experience.
Most of the ideas of Taylor are based on his own observation and
experience. Taylor himself adopted a scientific approach by introducing
new techniques and principles, the methods must be tried to reach the best
one. The method which exploits maximum resources with minimum cost
must be selected. All such scientific techniques resulted! increasing
productivity of workers and best performance.
(iv) Standardisation.
Taylor advocated pre-determined standards in connection with material,
method, quality and time. He insisted on the application of scientifically
developed standard tools and equipments. He advocated standardised
working conditions and standard time. All sin syggestions are scientific in
nature.
(v) Scientific training.
Taylor insisted that workers must be selected through a standard
procedure to ensure right person for the right job. It must be followed up
by scientific training. A well trained worker can assure perfection in his
job.
Thus all his ideas and methods are based on scientific approach. Therefore
he is rights ailed the father of scientific management.
: 74 : Principles of Management
2. Principles of management is rigid, (or) Principles of management are neitl

universal nor dynamic.
Ans. False.
(i) Dynamic.
Unlike the natural sciences like physics and chemistry, the principles of
managem* are dynamic in nature. They are flexible and not rigid or static.
They act under the influence of several socio-cultural and economic
factors.
The principles of management are made so flexible that they are
applicable to people and environment which are frequently changing.
Thus dynamic attitude is the basic feature of management.
(ii) Relativity
Unlike scientific principles which are absolute and uniform, the principles
of management can not be used for readymade solutions. They are only
guidelines to solve the problem Management principles are relative and
adjusted in accordance with the existing environment. They do not offer
immediate remedy. They only help the manager to understand the
situation and find out the necessary solution. They can not be accepted
blindly. The manager must keep in mind the size, nature and
requirements of the organisation while applying these principles.
(iii) Management principles are universal.
According to thinkers like Megginson, Fayol and Dalton Mc Farland
management principles are universal and are applicable everywhere. It is
practiced by all organisations under all kinds of situations whether it is
business, government, military university, clubs or church.
In the words of Professor Megginson - "Management principles are true
in all managerial situations and are universally applicable in business,
government, religious.
(iv) Management principles are easily transferable.
Management principles can be transfered from one person to another
person and one country to another country. According to Fayol
presidents, college deans, bishops and heads of governement follow same
principles.
People from developing countries can learn management principles from
developed countries.
(v) Management principles can be altered.
Management principles are only guidelines. Managers can not follow
them blindly. They have to alter them according to the situation existing.
They cannot be applied in rigid form. It is possible to alter them as'per the
situation warrants.
3. Principles of management improve the efficiency of workers.

Ans. True.
(i) Increase in efficiency.
Managers of business organisations are effectively guided and supported
by the principles of management in their strategy to achieve the
organisational objectives. Through application of such principles under
different situations, a manager is bound to gain great experience and
maturity. This will certainly improve his knowledge, ability and
understanding of various managerial situations. These principles helps
them to learn from mistakes and guide them to take right decisions at
the right time.
(ii) To train and educate managers.
Application of management principles provides necessary training to
the managers and educate them how to face different challenges. It also
facilitates them with a great degree wisdom. The experience and the
wisdom enable the manager to evaluate any kind of management job.
Taylor strongly believed that a well trained worker delivers maximum
productivity.
(iii) To achieve optimum utilisation of resources.
Principles of management suggest systematic planning and scientific
application of strategies, help to avoid wastage and improve efficiency.
Taylor's scientific management suggest best method to eliminate
wasteful movements by setting up a standard time to complete task.
(iv) To motivate employees.
The management principles motivate the employees to contribute their best
to company. The principles of management advocate policy of incentives
and promote to improve the performance of the employees.
(v) Team Spirit.
Many reputed organisations adopt principles which develop team spirit
and ordination among the workers. Team spirit avoids confrontation and
conflicts ensures smooth functioning of the organisation.
4. According to Taylor there must be scientific selection and training of workers
Ans. True.
(i) Proper selection :
The job of selection should be entrusted with experts and specialists who
are caps of recruiting right persons for the right jobs. Such a responsibility
should not give to foreman who may not possess the required knowledge.
Taylor suggested a variety of tests to be faced by the candidates before
finalise selection.
(ii) Training.
(iii) Taylor strongly believed that workers need to be well trained for the jobs.
Trair makes them more efficient. The training must be given according to
the requirerm of the job.
(iv) Development of each man to his greatest efficiency and prosperity.

Scientific management believes in developing each worker to his greatest
efficic and prosperity. Workers are selected carefully and scientifically
trained to acr highest level of effeciency. Training is given in accordance
with the requirements the jobs. This will enable him to earn higher
remuneration and mental satisfactk
(vi) Maximum Prosperity of employer, coupled with maximum prosperity of
employee.
According to Taylor the objective of scientific management is to achieve
maximi prosperity for employer and employee. Maximum prosperity for
employer meai just not huge profit in the short run. It is the over all
development of the organisar : in order to achieve permanent prosperity.
Workers achieve maximum prosperity not just by immediately getting
higher waga but through development of their ability. This will enable
them to work efficiently M higher grades which suits their natural abilities.
(vii) Standardised working conditions.
Scientific management prescribes standards in respect of physical
conditions such a working space, ventilation, lighting, temperature,
humidity etc. It ensures optimum utilisation of the capacity of machines
and workers.
5. The principles of equity says that the employees should be differentiated while
distributing the work and making payments.
Ans. False.
i. The principle of equity is not related to payment of wages and salary.
Equity does not mean equal salary or differentiated salary. It does not say
that a peon should be paid equal salary like a manager. It is concerned
about the equal treatment to all employees with respect to application of
rules.
ii. The principle of equity advocates fair and just treatment to employees.
Equity favours fair and just treatment to all employees irrespective of
their status and position. The manager must adopt a kind and fair
approach to ensure justice for all. This will induce the workers to put their
maximum efforts.
iii. Equity implies unbiased treatment.
Principle of equity advocates that a manager must remain unbiased in dealing
with employees. He should not favour one group and unfavour other group.
It will only divide the employees. If the manager is unbiased the employees
will put their efforts unitedly.
iv. Uniform disciplinary rules.
A manager must follow same disciplinary rules for employees whether
they are peons or supervisors. The procedure of application of rules must
be uniform for all irrespective of their position, grade and gender.
Q.2. Distinguish Between: Unity of Command and Unity of Direction:

Sr.No. Unity of Command Unity of Direction
Meaning
1 Unity of command states that an Unity of Direction states that each group
employee should receive orders from in the organization should have the same
only one superior, else the employee objective. Each group should follow one
may get confused and thus may not be manager and work in the same direction.
able to perform efficiently.
Reference
2 Unity of command speaks about the Unity of Direction refers to a group
relation between a single employee and working with the same objectives to
his superior (boss). work in the same direction.
Motive
3 The motive of this principle is to avoid The motive of this principle is to ensure
any confusion in the mind of the that all members in a team are working
employee and to facilitate the employee in the same direction.
to work with clarity.
Basis
4 This principle is based on the idea of one This principle on the idea of single plan
employee one superior (boss). and single manager for one team.
sentences.
(i) Management Principles are _________ in nature.
(a) static (b) limited (c) universal
(ii) Henry Fayol has suggested _____________ principles of management.
(a) 14 (b) 12 (c) 16
(iii) __________ is the principle of specialisation.
(a) Division of work (b) Centralisation (c) Discipline
(iv) Management principles influence ___________
(a) human behaviour (b) organisation (c) government
(v) Concentration of power of authority is started in the principles of
_________
(a) Centralisation (b) Remunarisation (c) Equity
(vi) According to the principles of __________ all employees should be
given same treatment
(a) Authority (b) Discipline (c) Equity
(vii) Technique of study of ____________ concentrates on the movements of the
worker.
(a) Motion (b) Time (c) Organisation
(viii) F.W. Taylor is called as the father of ____________ management
(a) Modern (b) Scientific (c) Technical
(ix) Technique that focuses on complete change in the attitude of the employee
and employer is known as the principle of _____________
(a) attitude change (b) scientific management (c) mental revolution
(x) _______ is the father of modern management

(a) Fayol (b) Taylor (c) Peter Drucker
(xi) _______________ is the father of scientific management
(a) Fayol (b) Taylor (c) Peter Drucker
B. Match the pairs from group A with group B:

A Group B Group
(a) Henry Fayol (a) F.W. Taylor
(b) Science not rule of thumb (b) Traditional thought
(c) Management principle (c) Scientific management approach
(d) Father of scientific management (d) 14 principle of management
(e) Division of labour (e) Universal
(f) Unity of command (f) Work allotment to the workers
(g) Unity of direction (g) Loyalty and devotion
(h) Principle of equity (h) Equal Payment to all employees
(i) Esprit de corps (i) Equal treatment to all employees
(j) Specialisation
(k) One employee one boss
(l) One unit one plan
C. Write a word or a phrase or a term which can be suitable for each one of the
following statements:
(1) State the name of the expert who put 14 principle of management
(2) Name the person who is the father of scientific management
(3) The principle of management relates to justice and kindness.
(4) Father of modern management
(5) The principle of management which says unity is strength
(6) The principle of management that says the work should be divided in to
parts
(7) The principle of management explaining the importance of fair payment
to workers
(8) The principle of management which explain the use of scientific method to
determine the activity performed by the employee.
(9) The technique of scientific management which talk about the change in
the attitude of the employees.
(10) The statements of fundamental truth of management

CHAPTER 7
FUNCTIONS OF MANAGEMENT
Q.1. State with reasons whether the following Statements are TRUE or FALSE.
1. Functions of managements have no role to play in success or failure of an
organization.
Reasons:
a) The functions of management are forecasting and planning, organizing,
commanding, coordinating and controlling.
b) George Terry has given much importance to Planning, Organizing,
Directing and Controlling. These functions are called the basic functions of
management
c) Manager needs to perform many activities in order to manage daily tasks.
These are termed as functions of management.
d) If all functions are performed effectively, and efficiently then organization
can achieve its aims and objectives.
e) Hence functions of management have significant role to play in success or
failure of an organization.
2. Planning is an intellectual process.

Ans. This statement is TRUE
Reasons:
a) Planning is chiefly an intellectual process which means thinking before
doing. The success of planning depends on the manager and his ability to
collect the facts which are likely to affect planning.
b) Whether these facts are connected with the present situation or the
estimated future change what matters is how correctly he takes his
decision on their bases.
c) The whole process happens to be intellectual and for the successful
completion of all these activities the planner should have fair-sightedness,
imagination power and decision making capacity.
d) Therefore, it can be said that planning requires thinking at every step and
hence it can be considered as an intellectual process.
3. Planning function alone can help to achieve organizational objectives.

Ans.This statement is FALSE.
Reasons:
a) Planning is beginning of managerial activities. It is one of the foremost
functions of organization.
: 80 : Functions of Management
b) Control is always exercised in the light of planning. Control without

planning is an impossible one. In absence of planning it would be very
difficult to find out what is going wrong in the organization. It prevents
managements from taking corrective measures to control the situation.
c) Planning determines the activities of different individuals, groups and
departments in such a way, that maximum coordination between physical
and human resources may emerge. Thus, there will be betters
coordination in the enterprise.
d) Planning provides direction for action by stating in advance how work is
to be done.
e) Thus, planning depends on other functions of management such as
directing, controlling, coordination. Thus planning function alone cannot
help to achieve organizational objectives.
4. Planning is of vital importance in the managements process

Reasons:
a) Planning is very first function of management. Planning means deciding
in the present what to do in the future.
b) It bridges the gap between where we are and where we want to be.
c) Planning is performed by all three levels of management viz. Top level
management, Middle level management, and Lower level management.
d) A well prepared plan helps to improve moral of employees. At the same
time effective planning helps to avoid or reduce wastage in the
organization.
e) Thus planning reduces risks and uncertainties, encourages innovation,
facilitates controlling, facilitates coordination. Therefore planning is of
vital importance in the managerial process.
5. Organizing is the process of defining and groupings the activities of the

organization.
Ans. This statements is TRUE
Reasons:
a) Organizings is an important function of management. It is concerned with
bringing together various resources i.e. men, machines, materials, money
methods and establishing relationships among them for the
accomplishment of specific objectives.
b) Organizing is process of implementing the plans by clearly defining the
jobs, working relationships and effectively deploying physical, human
and financial resources for achieving organizational goals.
c) By means of organizing, various abilities are utilized and interest is fund
together.
d) Hence, organizing is the process of defining and grouping the activities of
the organization.
6. Division of works is not required in organizing function.

Reasons:
a) Organizing is a division of work
b) Total work to be done is divided into manageable activities so that
duplication is avoided and work can be completed as per predetermined
goals.
c) Division of work facilitates specialization in work and skills which is
essential, as no individual alone can perform the entire work efficiently
and effectively.
d) Division of work is an important organizing function.
7. Staffing is just to determine the number of people required in the

organization.
Reasons:
a) Staffing means appointing competent persons according to the importance
of the post of the organization.
b) It means that more capable persons are appointed on more important
posts and comparatively less competent persons can be appointed on less
important posts.
c) Staffing involves recruitment and selection of employees, performance
appraisal of the employees, promotion and transfer of employees, training
and development, motivating and rewarding the employees.
d) Hence, staffing is not just to determine the number of people required in
the organization.
8. Staffing is one time process as people have to be appointed once.

Ans.This statement is FALSE
Reasons:
a) Staffing means appointing competent persons according to the importance
of the post of organization. It means that more capable persons are
appointed on more important posts and comparatively less competent
persons can be appointed on less important posts.
b) Taking into consideration the long term needs of the enterprise, right men
should be appointed at the right time for the right job. This can be done
through recruitment.
c) Recruitment is an activity of establishing contact between the employer
and the employee.
d) Once an organization could place the right man at the right job, it is easy
to plan, organize, coordinate, direct and control the human activities to get
desired results economically and efficiently.
e) In short, staffing includes manpower planning, recruitment, selection,

training, placement and development of the right personnel for the
enterprise.
Therefore, staffing is not a onetime process as people have to be appointed
from time to time.
9. Staffing includes human resource management.

Ans.This statements is TRUE
Reasons:
a) Human resource management is the recruitment, selection, development,
utilization, compensation and motivation of human resources of the
organization.
b) Human resource management is a wider term as compared to staffing.
c) It includes staffing, record keeping, personnel policies formulation,
conducting personnel research, providing expert services. etc.
d) Hence staffing is a part of the human resource management and not all of
it.
10. Every action in the organization is initiated through directing.

Reasons:
a) Directing as a function of management is concerned with instructing,
guiding and inspiring people in the organization to achieve its objectives.
b) Directing is one of the essential element of management process, therefore
it is said that “Directing is the heart of management process’.
c) Other functions of management i.e. planning, organizing, staffing are
initiated when the directing function is performed.
d) Actual actions are initiated when managers direct their subordinates. The
subordinates in the organization start working when they get instruction
from their superiors.
e) Therefore, every action in the organization is initiated through directing.
11. Directing is not required at all in management of the organization.

Ans.: This statement is FALSE
Reasons:
a) Directing as a function of management is concerned with instructing,
b) Other functions of management i.e. planning, organizing, staffing are
initiated when the directing function is performed.
c) Directing motivates the workers by providing monetary and non
monetary incentives to work efficiently and contribute their maximum
efforts towards achievements of organizational goals.
d) Effective directing results in efficient utilization of resources like time,
money, material and even efforts.
e) The directing function involves training and guiding of the subordinates

and also their supervision. This enhances their efficiency. Thus to achieve
organizational goals and objectives, directing is required at all levels of
management of the organization.
12. Directing function is not directly related with human factor.

Ans.This statements is FALSE
Reasons:
a) Directing as a function of managements is concerned with instructing,
b) Directing is one of the essential elements of management process,
therefore it is said that “Directing is the heart of management process”.
c) Planning, organizing, staffing has no significance if directing function
does not take place. It is the part of management process which ensures
the efficiency and effectiveness of the employees.
d) Many philosophers call directing as “Life spark of an enterprise” as it sets
everything in motion.
e) Hence, directing function is directly related with human factor.
13. Coordination is the essence of management.

Reasons:
a) Organization is a system which is made up of many parts and sub systems
which are interdependent, interlinked and interactive.
b) Coordination gives common direction to all the people in the
organization.
c) The harmony among these sub-system or parts decides the success of the
system as whole.
d) Without coordination any system will collapse in no time.
e) Thus coordination is the essence of management.
14. Coordination is same as co-operation

Ans.: This statement is FALSE
Reasons:
a) Coordination and co-operation are not one and the same.
b) Co-operation means helping one another to reach individual targets.
c) Co-operation can take place among managers or non-managers.
d) However, coordination is the function of managers, whereby they try to
interlink the activities of their subordinates.
e) Coordination is broader in scope than co-operation.
15. Coordination is needed at all levels of management.

Reasons:
a) The element of coordination needs to be everywhere.
b) Activities of all departments need to be coordinated. Within the
department the efforts of individuals and teams should be coordinated.
c) Managers need to coordinate money with materials, materials with
machines, Machines with technology, products with market and so on.
d) Thus managers at all levels and in all sections need to be coordinated.
There is no area of management in an organization where coordination is
not needed.
e) Coordination is needed at all levels of management. Therefore, it is called
pervasive.
16. Controlling is the indispensable function of management.

Ans.: This statements is TRUE
Reasons:
a) Control is an important function of management and consists of all
managerial functions such as planning organizing and staffing.
b) Nature of controlling at different levels of the organization is different.
c) For instance, top management is responsible for administrative control,
middle level management is responsible for execution of policy and low
level management is responsible for execution of activities.
d) If controlling is excluded, all other functions of management are rendered
meaningless.
e) Thus, controlling is the indispensable function of management.
17. Planning and controlling are interdependent and interlinked activities.

Ans.: This statement is TRUE
Reasons:
a) Planning and controlling are two separate functions of management
process. Despite being independent, both the functions are interdependent
to each other.
b) Controlling seeks to appraise the performance only in relation to
objectives set in advance. Without prior objectives, there can be no
performance and hence no appraisal and no controlling.
c) Therefore, it can be said planning is pre-requisite for controlling.
d) Thus, planning and controlling are complementary, supplementary and
interdependent to each other.
18. Corrective action is not possible through controlling

Reasons:
a) Controlling is a basic management function which implies measures of
actual performance of subordinates, comparing it with standards set by
plans and correction of deviations to ensure attainment of objectives
according to plans.
b) Therefore, the difference between the expected results and the actual
results is reduced to the minimum.
c) In this way, controlling is helpful in takings corrective action.
19. Co-ordination is similar to staffing.

Ans. False.
a) Staffing and co-ordination are two different functions.
Staffing is the process of matching jobs with right individuals. It is the process of
filling all positions in the organisation with adequate and qualified personnel.
Co-ordination is the interrelating factor which brings together separate work
units departments within an ogranisation.
b) Areas of specialisation differs.
Staffing specialisation are functions like selecting, training, placement,
compensation etc.
Co-ordination specialises on uniting and co-relating, arrangement of group effort,
inters and motivating working forces etc.
c) Work for different objectives.
The primary objective of staffing is to keep right type of people at right positions
and at the right time.
The primary objective of co-ordination is to co-ordinate different departments for
ensuring successful implementation of the policy.
d) Importance.
Staffing function has become important with growing size of organisation,
technology advancement and recognition of human factor in industry.
Co-ordination enables the management to utilise the energies of the working force
in the best possible manner.
sentences.
1) ______ function designs the future course of action.
(a) planning (b) directing (c) staffing
2) ______ process helps recruiting the right persons for the right places.
(a) planning (b) directing (c) staffing
3) The function of ______ establishes relationship of different people within the
__________ organisation.
(a) organising (b) directing (c) staffing
4) ________ function takes group efforts to bring together different units and
departments within the organisation.
(a) organising (b) directing (c) co-ordination
5) The process of management starts with__________function.
(a) planning (b) controlling (c) co-ordinating
6) _________ involves all aspects of business
(a) planning (b) cntrolling (c) directing
7) Staffing is concerned with____________
(a) physical factor (b) financial factor (c) human factor
8) Planning is__________
(a) neutral process (b) basic function (c) forward looking
9) Planning is________
(a) Advanced Function (b) Primary Function (c) End Function
10) Division of work is involved in__________at function.
(a) Planning (b) Organising (c) Directing
11) Directing is initiated at________ level.
(a) Top (b) Middle (c) Lower
12) Staffing function is a__________activity
(a) Basic (b) Continuous (c) Neutral
13) A process to establish harmony among different activities to achieve desired
results is__________
(a)Controlling (b) co-ordinating (c) co-operation
14) The last function in managerial process is______
(a) Co-ordinating (b) Controlling (c) Motivating
15) Unification, integration and synchronization of the efforts of group members
so as to achieve common goals is a ________ function.
(a) planning (b) organising (c) co-ordinating
16) Controlling measures the_______ of actual performance from the standard
performance and helps in correction action.
(a) Action (b) Deviation (c) Objective
17) Directing is a responsibility of___________at all levels.
(a) Manager (b) Worker (c) People
18) Physical, financial and human resources to develop productive relationship is
________a function.
(a) Organising (b) Directing (c) Staffing
19) Deciding in advance as what is to be done, when it is to be done and who is to

do it is __________ function of management.
(a) planning (b) organising (c) controlling
B) Match the pairs from group 'A' with group 'B':

A B
(i) Planning (a) Departmentalization
(ii) Staffing (b) Framing objectives or policy for
Future course of action
(iii) Organizing (c) promotion and transfer
(iv) Directing (d) continuous commitment to
improvement of quality
(v) Controlling (e) to unite and co-relate
(vi) Co-ordination (f) guiding and inspiring
(g) to order and restrain
A B
(1) Planning (a) Individual Taste
(2) organizing (b) Directly related to Human Beings
(3) Staffing (c) Bridges the gap between where
(4) Directing we are now and where we want
(5) Controlling to go
(d) All the people are employed
(e) Not directly related to Human being
(f) Identify and grouping the work to be
performed
(g) corrective Action taking
(h) Right people at Right Jobs
(i) Taking action against employees
(j) Aims only at organizational Goals
C) Write a word or a phrase or a term which can be suitable for each one of the
following statements.
(1) The first and basic function of management determing objectives and
future course of action.
(2) The function of management which organises people and resources and
concerned with a division of work among managers-and staff.
(3) The function of management concerned with providing man power with
required skills.
(4) The function of management which is concerned with guiding, instructing
and inspiring people with the aim of putting in action the administrative
decisions.
(5) The function of management which involves harmonization or balancing
of group efforts.
(6) One of the functions of management is considered as a base for all

functions.
(7) A function of management that ensures that actual activities match up to
the planned activities.
(8) A function where right people are given right jobs.
(9) A function where recruitment, selection, training, development, etc is done
for the people.
(10) A process where managers instruct, guide and communicate with
employees.
(11) A function rightly treated as the essence of management.
(12) A process where standards are set, actual performance is measured and
corrective action is taken.
(13) An end function where the performance is evaluated in accordance with
plan,
(14) A function without which planning is meaningless.
(15) A management function which is decided in advance as to what to do,
how to do it, when to do it and who is to do it.
(16) A function directly related to human beings.
(17) A management function concerned with ascertaining whether the activities
are carried out as per plan and take corrective action.
(18) An orderly arrangement of group efforts to provide unity of action to
achieve common goals.
(19) A process of taking steps to bringing actual results and desired results closer
together
(20) A function which provides instructions from top level management to the
lower level

CHAPTER 8
ENTREPRENEURSHIP DEVELOPMENT
Q.1. A) Select the proper options given from the options given below and rewrite
the completed sentences:
1. The word ‘entrepreneur’ is derived from the _______ word ‘entreprende’
a) Japanese b) English c) French
2. ‘Entreprende’ means to _______.
a) undertake b) enterprise c) businessman
3. The oxford English dictionary defines an entrepreneur as the ______ of a
business
a)secretary b) employee c) director
4. The term entrepreneur was first used by ______.
a) J. Schumpeters b) R.Cantilon c) A.H.Cole
5. 13 functions of an entrepreneur was enumerated by _______
a)J.Scumpeter b) R.Cantilon c) Kilby Peter
6. The inner urge of a person to do something is ______
a) initiative b) hard work c) creativity
7. Entrepreneurial _______ is measured in terms of the individual’s attitude
toward opportunity recognition.
a) value b) attitude c)motivation
8. The basic element of the process of ______ is motive, behavior and goal.
a)value b) motivation c) attitude
9. Entrepreneur are referred to as __________ ‘factor of production’.
a) Fourth b) Fifth c) Sixth
10. Enterprise is an organization which is involved in some ________ activity.
a) Political b) economic c) social
11. ________ among the employees of the enterprise will have great effect on
the success of the company.
a) Co – ordination b) Positive c) Negative
12. The mental abilities of an entrepreneur consist of creative thinking and
________.
a) Intelligence b) dullness c) pessimistic attitude
13. ________ attitude is very important for the success of an enterprise.
a) Pessimistic b) Positive c) Negative
14. ________ is a pre-requisite ti innovation.
a) Intelligence b) Positive attitude c) Creativity
15. Entrepreneur observes and waits for the best opportunity for their enterprise as
they have the competency of being _________ .
a) Persuasive b) Opportunity seeker c) Optimistic
16. EDP was first introduced in ________ in 1970.
a) Maharashtra b) Tamil Nadu c) Gujarat
: 90 : Entrepreneurship Development
17. The EDP’s are based on the experiments conducted by ________ .

a) McClellands b) Kilby Peter c) Joseph .A. Schumpeter
18. _______ is not an objective of EDP.
a) Helping socially disadvantaged groups.
b) Fostering entrepreneurial capability
c) Identifying backward regions
19. Internal values include ________ .
a) Excitement and fun and enjoyment in life
b) Sense of belonging; warm relationships with others
c) Self Fulfilment; sense of accomplishment and Self-respect.
B) Match the correct pairs:

a. Economic activity 1. Self-fulfillment
b. Highly optimistic 2. Entrepreneurship
c. External values 3. Passion
d. Internal values 4. A sense of belonging
e. Motivation 5. Entrepreneur
6. Positive or negative
7. Benefit
8. Dimension
9. Necessity Based
10. Market opportunity
Group “A” Group “B”

1. Passion a. J. Schumpeter
2. Motive, goal and behaviour b. Internal factor of motivation
3. Strong desire to do something c. Entrepreneurial attitude
4. Profit Margin d. B. Higgins
5. List of values (LOV) – 9 values e. Elements of motivation
f. Enterprise
g. External factor of motivation
h. Entrepreneurship
i. Three dimensions
C) Write a word or phrase or a term which can substitute each one of the
following:
1. An undertaking or adventure involving uncertainty and risk and requiring
innovation.
2. A function of creating something new for an economic activity
3. A person who is an innovator who innovator who introduces new
combinations of means of production.
4. The process of enhancing entrepreneurial skills and knowledge through

structured training and institution-building programmes.
5. The process that motivates a person into action and induces him to continue
the course of action for the achievement of goals.
6. Uncertainty involved in an activity.
7. An entrepreneur can get the work done according to his ideas by sound
arguments and logical reasoning with the help of this competency.
8. A combination of knowledge, skills, motive, attitude and habits.
9. A scheme of instructions which is planned, systematic, consistent, pervasive
and monitored to measure its effectiveness.
10. The type of motivation when a person performs to earn rewards.
11. The type of motivation when a person acts in the fear of failure or frustration.
Q.2. State with reason whether the following statements are ‘true’ or ‘false’
1. Training broadens the vision of entrepreneurs.
Reasons:
a. Training means the act of increasing the knowledge and skills of an
employee or dong a particular job.
b. Training implies activities that teach employees how to perform their
present job better. It is the training that prepares people to perform their
present jobs better. In short, training prepares people to perform their
present jobs more efficiently.
c. Training teaches employees required skills, knowledge or attitude and
helps them in improving performance by improving new skills, new
technique of doing the work and by improving their work habits.
d. Training is thus aimed at improving performance of personnel in their
present position or jobs.
e. Thus, training broadens the vision of entrepreneurs.
2. Attitudes build an entrepreneur

Reasons:
a. An attitude can be defined as a positive or negative evaluation of people,
objects, event, activities, ideas, or just about anything in business
environment.
b. Entrepreneurial Attitude is measured in terms of individual attitude
towards opportunity recognition.
c. Entrepreneur requires various attitude traits that enables for achieving
entrepreneurial success.
d. Attitude attributes such as a burning passion, trustworthiness, flexible-
except with core value, free from fear of failure, timely decision,
entrepreneur as a company assets, ego under control, belief in himself,
accept criticism, maintain a strong work ethic, rebound quickly from
setbacks, get out from comfort zone can put an entrepreneur in the right
mindset for achieving entrepreneurial success.
e. Thus attitudes build an entrepreneur.
3. Motivation is an important factor in the development of an entrepreneur.

Ans. This statement is TRUE.
Reasons:
a. Motivation is the driving force that inspires people to put their efforts
willingly for the achieving of organizational goals.
b. It is a psychological phenomenon which energizes, activities and
stimulated the internal feeling of the employees to accomplish desired
goals.
c. The objective of motivation process is to know from where does it start
and where does it end. This is work that cannot be finished at one go
but it is a combination of many steps.
d. Hence Motivation is an important factor in the development of an
entrepreneur.

ORGANISTION OF COMMERCE AND MANAGEMENT

Time : 3 Hours MARCH 2014 Max Marks : 80
Q.1. (A) Select the proper option from the options given below
(5)(15)
and rewrite the sentences :
(1) A sole trading concern ensures ____________ business secrecy.

(a) minimum (b) Maximum (c) Limited
(2) An electronic facility of transferring funds through the internet is called _________
Transfer.
(a) Cash (b) Net banking (c) Credit
(3) Business organization is a part of ___________
(a) industry (b) government (c) society
(4) ____________is the President of State Commission
(a) The District Court Judge (b) The Supreme Court Judge (c) The High Court Judge
(5) According to the principle of __________all employees should be given fair treatment.
(a) authority (b) discipline (c) equity
(B) Match the correct pairs :

(5)
(1) Private company (a) Minimum 7 members
(2) Overdraft (b) Saving Account
(3) ATM (c) 1996
(4) Consumer Protection (d) Electronic Business
(5) Act Controlling (e) Current Account
(f) Maximum 50 members
(g) Automatic Teller Machine
(h) 1986
(i) Individual Taste
(j) To take corrective action
(C) Write a word a phrased or a term which can substitute each of the following
statements: (5)
(1) The business organization which has minimum ten members.
(2) The type of warehouse where early perishable goods are stored.
(3) An activity motivated by profit.
(4) Father of scientific management.
(5) A function where right people are given right jobs.
Q.2. Distinguish between the following (Any THREE) : (15)

(1) Sole trading concern and Partnership firm.
(2) Road transport and Rail transport
(3) Private company and Public company.
(4) State commission and National commission
(5) Planning and Controlling
Q.3. Write short notes on Any THREE of the following: (15)

(1) Types of Partners
(2) Advantages of outsourcing
(3) Rights of consumers
(4) Importance of principles of management
(5) Importance of directing.
Q.4. State with reasons whether the following statements are True or False
(Any THREE) : (15)
(1) The main purpose of a cooperative organization is to earn profit.
(2) Transport is useful in raising standard of living
(3) It is easy to set up e-business as compared to traditional business.
(4) Management should avoid worker’s participation while making decisions.
(5) Co-ordination is needed at all the levels of management.
Q.5. Attempt the following (Any TWO) : (10)

(1) State social responsibilities of business towards government.
(2) State the importance of consumer protection.
(3) State any ‘five principles’ of management given by Henry Fayol.
(4) State the characteristics of an ‘entrepreneur.’
Q.6. Define Joint stock company. Explain its merits and demerits. (10)
OR
Define ‘insurance’. Explain the various principles of insurance.

Time : 3 Hours OCTOBER 2014 Max Marks : 80
Q.1. (A) Select the proper option from the options given below (5)(15)
(1) Tax maximum number of members in a private company are _________

(a) 50 (b) 40 (c) 20
(2) The principle of indemnity is not applicable to ___________
(a) Life insurance (b) Marine insurance (c) fire insurance
(3) For online transactions _______________is required.
(a) trading (b) registration (c) business
(4) To maintain industrial peace is the responsibility of business organisations
towards______
(a) customers (b) employees (c) society
(5) F.W.Taylor is called as the father of _________management.
(a) modern (b) scientific (c) technical
(B) Match the correct pairs : (5)

(1) Common seal (a) Related with human factors
(2) Bonded warehouse (b) Located at railway station
(3) B to C (c) Business to business
(4) Mumbai Grahak (d) Joint Stock Company
(5) Panchayat (e) Political organization
Staffing (f) Business to consumer
(g) Located within the ports
(h) Partnership firm
(i) Related with financial factor
(j) Non-Government Organisation working
for consumers.
statements: (5)
(1) ‘One man show’ type of business organization.
(2) A set of principles of right conduct.
(3) A consumer dispute redress all agency that handles claims upto rupees twenty lakhs ( `
20,00,000)
(4) The principle of management which says ‘unity is strength’.
(5) A process where managers instruct, guide and communicate with employees.
Q.2. Distinguish between the following (Any THREE) :

(15)
(1) Private company and Public company.
(2) Water transport and Air transport.
(3) District forum and National commission.
(4) Organising and Staffing.
(5) Joint Hindu Family Business and Sole Trading Concern.

(1) Disadvantages of e-business.
(2) Social responsibility of business organisations towards consumers.
(3) Techniques of scientific management.
(4) Importance of coordination.
(5) Functions of an entrepreneur.
(Any THREE) : (15)
(1) Planning has vital importance in the management process.
(2) Business ethics is not applicable to all business organizations.
(3) A Joint Stock Company can raise huge capital
(4) The principle of indemnity is applicable to life insurance.
(5) Consumer Protection Act is a blessing for the consumers.

(1) State the types of cooperative societies.
(2) State the steps involved in online transactions.
(3) State the ways and means of consumer protection.
(4) State the importance of principles of management.
Q.6. Define a Sole Trading Concern. Explain its merits and demerits. (10)
OR
Q. 6. Define Bank and Explain different types of Bank ?

(1) Indian Partnership Act was passed in the year_________
(a) 1932 (b) 1923 (c) 1942
(2) In India railways are owned and managed by___________
(a) Private companies (b) Government (c) Individuals
(3) Staffing is concerned with___________
(a) Physical factor (b) financial factor (c) Human factor
(4) Businessmen are__________ of the society.
(a) Representative (b) Members (c) Trustees
(5) National Commission has _________members in addition to the chairman.
(a) 2 (b) 3 (c) 4

(1) Sole trader (a) Insurable interest
(2) Life insurance (b) Branch of Social Science
(3) Business ethics (c) Local Market
(4) Henry Fayol (d) Father of scientific management
(5) Planning (e) Principle of indemnity
(f) Father of Modern management
(g) Primary function of management
(h) To earn profit
(i) Last function of management
(j) National market
statements: (5)
(1) A partner who give only his name to the partnership firm.
(2) The term derived from the terms ‘e-mail’ and ‘e-commerce’.
(3) The right of consumer which allows him to express his views.
(4) The principle of management explaining about fair payment to workers.
(5) The form of electronic currency that exists only in cyberspace.

(1) Joint Hindu Family firm and Joint Stock company.
(2) Bonded warehouse and Duty paid warehouse.
(3) District Forum and state Commission.
(4) Organising and Coordinating.
(5) Cooperative society and Partnership firm.

(1) Features of sole trading concern.
(2) Any ‘five types’ of banks.
(3) Advantages of e-business.
(4) Any ‘five cases’(needs)of social responsibilities of business.
(5) Nature of principles of management.
(Any THREE) : (15)
(1) In partnership the liability of partners of a firm is unlimited
(2) Cash can be withdrawn from ATM at any time.
(3) Business organization is not responsible to control pollution.
(4) In India Consumer Protection Act is not required.
(5) Training broadens the vision of entrepreneurs.

(1) State the advantages of Road Transport.
(2) State the working of a Payment Gateway.
(3) State the responsibilities of consumers.
(4) State the principles of Scientific Management.
Q.6. Define ‘partnership firm’. Explain its merits and demerits. (10)
OR
Define ‘planning’. Explain its importance.

(1) A sole trading concern ensures____________ business secrecy.
(a) minimum (b) maximum (c) limited
(2) For online transaction ______________is required.
(a) trading (b) registration (c) business
(3) Credit or Debit cards are popularly knows as ___________money.
(a) paper (b) plastic (c) polymer
(4) To make timely payment of proper taxes is the responsibility of organization towards the
_________
(a) shareholders (b) customers (c) government
(5) Under the Consumer Protection Act 1986, there is a ________quasi judicial consumer
dispute redressal machinery for solving the complaints of consumers.
(a) two-tier (b) five-tier (c) three-tier

(1) Public Company (a) Father of scientific management
(2) Henry Fayol (b) Corrective action taking
(3) Controlling (c) Commercial bank
(4) Reserve Bank of India (d) Withdrawal after fixed period of time
(5) (R.B.I) (e) Maximum 50 members
Fixed deposit account (f) Central Bank
(g) Unlimited members
(h) Father of modern management
(i) Taking action against employees
(j) Withdrawal before the fixed period of time
statements: (5)
(1) The type of commercial organization established for providing services to its members.
(2) Getting good quality products is the basic right of this group of society.
(3) a consumer dispute redressal agency that handles claims more than ` 1(one) crore.
(4) The statements which disclose fundamental truth of management.
(5) A process wherein the manager instructs, guides and communicates with employees.

(1) Partnership Firm and Joint Stock Company.
(2) Current Account and Saving Account.
(3) State Commission and National Commission.
(4) Planning and Controlling.
(5) Cooperative Society and Joint Hindu Family Firm.


(1) Advantages of e-business.
(2) Nature of principles of management.
(3) Features of co-operative society.
(4) Importance of organizing.
(5) principles of Insurance.
(Any THREE) : (15)
(1) Maximization of profit is the main motto of co-operative society.
(2) E-business allows you to work across the globe in any field.
(3) Business organisaion has various types of social responsibilities.
(4) ‘Lok Adalat’ is one of the effective ways to resolve consumer problems.
(5) Principles of management are rigid.

(1) State the responsibilities of business towards government.
(2) Explain the characteristics of an entrepreneur.
(3) State the importance of co-ordinating.
(4) Explain the importance of consumer protection.
Q.6. Define a sole trading concern. Explain its merits and demerits. (10)
OR
Define Bank. Explain different types of banks.


(1) The maximum number of partners for a firm carrying on banking business is ________
(a) 10 (b) 20 (c) 7
(2) Door-to-door service is offered by _________ transport.
(a) Rail (b) Road (c) Air
(3) Business organization is a part of _________
(a) Industry (b) Government (c) Society
(4) In modern competitive market consumer is regarded as ____________
(a) King (b) Agency (c) Superintendent
(5) Planning is _________function.
(a) advanced (b) basic (c) end

(1) Co-operative Society (a) The Father of Modern Management
(2) ‘e’ Business (b) President of national commission
(3) District Judge (c) Not directly related to human beings
(4) F.W.Taylor (d) Outsourcing
(5) Staffing (e) One share one vote
(f) President of District forum
(g) Father of Scientific management
(h) Electronic Business
(i) Right people to right jobs
(j) One member one vote
statements: (5)
(1) ‘One man show’ type of business organization.
(2) A bank which is known as bankers bank.
(3) Name the modern process of controlling a business function to someone else.
(4) Name the employees organization protecting their rights.
(5) Principle of management that says that any work should be divided into small parts.

(1) Partnership Firm and Joint Stock Company.
(2) Current Account and Fixed Deposits Account
(3) Road Transport and Water Transport
(4) District Forum and State Commission
(5) Planning and Controlling


(1) Features of Joint Hindu Family Business.
(2) ‘e’ Business
(3) Significance of Principles of Management.
(4) Right of Consumers
(5) Any ‘five’ principles of management.
(Any THREE) : (15)
(1) The ownership and management is not separated in Joint Stock Company.
(2) Reserve Bank of India cannot accept deposits from public.
(3) Post offices provide money remittance services.
(4) Management should avoid worker’s participation while making decisions.
(5) The Consumer Protection Act was passed in the interests of the sellers.

(1) State the features of sole trading concern.
(2) State the social responsibilities of business organization towards government.
(3) State the working of payment gateway.
(4) State the functions of an Enterpreneur.
Q.6. Define Co-operative Society. Explain its merits and demerits of Co-operative
Society (10)
OR
Define ‘Controlling’. Explain its importance.


(1) Indian Partnership Act was passed in the year________

(a) 1932 (b) 1923 (c) 1942
(2) Overdraft facility is given to _________
(a) Saving account (b) Current account (c) Fixed deposit account
(3) In e-business, payments have to be made _________
(a) in cash (b) on credit (c) online
(4) Ultimate goal of business must be the satisfaction of ____________
(a) Shareholders (b) Consumers (c) Owners
(5) In the modern competitive market consumer is regarded as the_________
(a) Agency (b) Superintendent (c) King

(1) Private company (a) One man one boss
(2) Principle of unity of (b) Basic function
(3) command (c) 12 hours service
(4) Planning (d) Maximum 50 members
(5) ATM (e) One man many bosses
Road transport (f) 24 hours service
(g) The cheapest means of transport
(h) Unlimited members
(i) End function
(j) The costliest means of transport
statements: (5)
(1) The senior most family members of a Joint Hindu family firm.
(2) Getting good quality products is the basic right of the group of society.
(3) A consumer disputes redressal forum working at state level.
(4) Father of Modern Management
(5) A function of management directly related to human beings.

(1) Co-operative society and Joint stock company
(2) Road transport and Water transport
(3) District forum and State commission.
(4) Co-ordinating and Controlling
(5) Private company and Public company


(1) Advantages of outsourcing.
(2) Significance of principles of Management.
(3) Features of a Sole Trading concern.
(4) Importance of Directing.
(5) Functions of a Warehouse.
(Any THREE) : (15)
(1) Co-operative society differs from other forms of commercial organisations.
(2) e-business allows you to work across the globe in any field.
(3) Business organization does not have various types of social responsibilities.
(4) ‘Lok Adalat’ is one of the effective ways to resolve consumer problems.
(5) Principles of management are rigid.

(1) State responsibilities of business towards employees.
(2) State the functions of an entrepreneur.
(3) State the importance of planning.
(4) State the rights of consumers.
Q.6. Define a partnership firm. Explain its merits and demerits. (10)
OR
Define Life Insurance. Explain the types of Life Insurance policies.

ORGANISAION OF COMMERCE AND MANAGEMENT

Note ; (i) All questions are compulsory.

(ii) Figures to the right indicate full marks for the questions.
(iii) Figures to the left indicate question numbers.
(iv) Answer to every question must be started on a new pages.
[15]
Q.1. (A) Select the proper option from the possible question given below and rewrite
the complete statements: (5)
(1) The Karta in a Joint Hindu family business has _________ liability.
(a) Unlimited (b) limited (c) Joint
(2) Perishable goods are stored in _________
(a) bonded warehouse
(b) duty paid warehouse
(c) Cold storage warehouse
(3) The process of contracting a business function to someone else is called as
_______
(a) e-business (b) outsourcing (c) trading
(4) Businessmen are______________ of the society.
(a) representatives (b) members (c) trustees
(5) Government has established _________to settle consumers disputes by
compromise.
(a) Lok Adalat (b) District forum (c) Supreme Court.

(a) Co-operative society (1) Manager
(b) F.W.Taylor (2) 12 hours service
(c) Directing function (3) One member one vote
(d) A.T.M (4) Government owned
(e) Rail transport (5) Father of scientific management
(6) 24 hour service
(7) Owned by private companies
(8) Father of modern management
(9) Maximum business secrecy
(10) Worker
(C) Write only ‘one’ word or phrase or term which can substitute the following
statements : (5)
(1) A partner who give the name to a partnership firm.
(2) Geeting products of better quality is the basic right of this group of society.
(3) A Consumer dispute redressal agency that handles claims upto rupees
twenty lakhs.
(4) The Principles of management which advocates that work should be divided
into small Sub-parts.
(5) One of the functions of the management to considered as a base for all
functions.
Q. 2. Distinguish between the following (Any THREE) : (15)

(1) Sole trading concern and partnership firm.
(2) Savings account and Fixed deposit account.
(3) District Forum and National Commission.
(4) Organising and Directing
(5) Co-operative society and Joint Hindu family firm.
Q. 3. Write short notes on the following (Any THREE):

(1) Disadvantages of e- business
(2) Any ‘five’ principles of management
(3) Types of partners
(4) Importance of staffing
(5) Role of transport
Q. 4.State with reasons whether the following statements are True or False (Any THREE) :
(1) Maximisation of profit is the object of a co-operative society
(2) e – business means using the internet to connect people and processes.
(3) Businesws organization have various types of social responsibilities.
(4) Consumer protection Act is not a blessing for the Consumers.
(5) Principles of management improves the efficiency of Employees.
Q.5. Write short answers of the following (Any TWO) :

(1) State the social responsibilities of a business towards consumers.
(2) State the characteristics of Enterpreneurship.
(3) State the important of controlling
(4) State the rights of consumers.
Q.6. Define Joint Stock Company and explain its features.
OR
Define Fire Insurance? Explain the various types of fire insurance policy.

Q.1. (A) Select the proper option from the possible options given below and
rewrite the complete statements: (5)
(1) Indian Partnership Act was passed in the year …………….. .
(a) 1932 (b) 1923 (c) 1942
(2) Postal services are administered by ………………. .
(a) Private companies (b) Government of India (c) Panchayat
(3) Credit or debit cards are popularly known as ` …………………. Money ‘.
(a) Paper (b) Plastic (c) Polymer
(4) To maintain industrial peace is the responsibility of organisation towards
………… .
(a) Customers (b) Employees (c) Society
(5) Directing is initiated at ……………. Level.
(a) Top (b) Middle (c) Lower
(B) Match the correct pairs: (5)

Group `A’ Group `B’
(a) Government company (1) Recurring deposit account
(b) Overdraft facilities (2) Authorizes payments made online
(c) A.T.M. (3) 49% share capital held by Government
(d) Trade Union (4) Father of modern management
(e) F.W. Taylor (5) Job security
(6) Current account
(7) 51% share capital held by Government
(8) Automated Teller Machine
(9) Negotiations with management
(10) Father of scientific management
(C) Write a word, Phrase or term which can substitute the following statements:
(5)
(1) One man show’’ type of business organisation.
(2) Non Profit and non-political independent groups workings for definite cause
(3) The principle of management explaining the importance
(4) The court established by Government to settle consumer disputes by mutual
compromise
(5) A function of management where right people are given right job
Q.2. Distinguish between the following (Any THREE): (15)

(1) Sole trading concern and Partnership firm .
(2) Savings account and fixed deposit account
(3) District forum and National Commission
(4) Private company and Public company
(5) Planning and Organizing
: 266 :
J.K.SHAH CLASSES S.Y.J.C. – O.C.
Q.3. Write short answers of the following (Any TWO): (10)

(1) Merits of co-operative society
(2) Features of a joint stock company
(3) Merits and Limitations of air transport
(4) Advantages of e-business
(5) Elements of business ethics
(Any THREE): (15)
(1) Maximum number of members in a joint hindu family firm is 20.
(2) e – business allows you to work across the globe in any field
(3) Business should not disclose their records to investors
(4) Consumer being the king of the market does not have any responsibilities
(5) Principles of management improve the efficiency of employees.
Q.5. Write short answers of the following (Any TWO): (10)

(1) State the registration procedure for a partnership firm
(2) State the importance of consumer of consumer protection
(3) State any five principles of management
(4) State the factors motivating the entrepreneur
Q. 6. Define commercial bank. Explain its primary functions

OR
What is organizing? Explain the nature of organizing
: 265 :
: 267 :

Note : (i) All questions are compulsory.

Q. 1. (A) Select the proper option from the possible [15]

options given below and rewrite the complete statements: (5)
1) The maximum number of partners for a firm carrying on banking business is
_______.
a) ten b) twenty c) seven
2) Bonded warehouses are located at _______.
a) Railway stations b) villages c) ports
3) To maintain safety of investment is the responsibility of business towards
________.
a) Community b) Investors c) Employees
4. The president of state commission is _______.
a) District Court Judge b) Supreme Court Judge c) High Court Judge
5) Management principles influence _______.
a) Human behaviour b) Organization c) Government

a) Indian Companies Act 1. Cheapest mode of transport
b) Air transport 2. Directly related to human beings
c) HTTP 3. Negotiations with management
d) Trade Union 4. 1956
e) Directing 5. Hyper transfer text protocol
6. 1932
7. Not directly related to human beings
8. Costliest mode of transport
9. Encryption
10. To maintain solvency and
prestige.
(C) Write only a word or a phrase or a term which can substitute the following
Statements: (5)
1) A partner who gives only his name to the partnership firm.
2) Name the form of electronic currency that exists only in cyberspace.
3) A consumer dispute redressal agency that handles claims of more than Rs. 1
(one) crore.
4) Father of modern management.
5) An end function where the performance is evaluated in according with the
plan.

Q. 2. Distinguish between the following (ANY THREE): [15]

1) Joint Hindu Family firm and Joint Stock Company
2) District forum and state commission
3) Fire insurance and marine insurance
4) Partnership firm and Co-operative society
5) Organizing and staffing
Q. 3. Write short notes on the following (ANY THREE): [15]

1) Features of a co-operative society.
2) Advantages of e-business.
3) Responsibilities of business organization towards government.
4) Importance of consumer protection.
5) Importance of co-ordinating.
Q. 4. State with reasons whether the following statements are True or False (ANY
THREE): [15]
1) In a partnership firm, the liability of partners is unlimited.
2) Business organizations do not have various types of social responsibilities
3) Lok Adalat can rightly be described as “people’s court”.
4) According to Taylor, there should be scientific selection and training of employees.
5) Planning has no vital importance in the process of management.
Q. 5. Write answers of the following (ANY TWO): [10]

1) State the various types of warehouses.
2) State the advantages of outsourcing.
3) State the importance / significance of the principles of management.
4) Explain characteristics of entrepreneurship.
Q. 6. Define ‘Joint Hindu family firm’. Explain the features of a Joint Hindu family firm.
OR [10]
Define ‘bank’. Explain different types of banks.


Note ; (i) All questions are compulsory.

Q. 1. (A) Select the proper option from the possible [15]

options given below and rewrite the complete statements: (5)
(1) The Karta in Joint Hindu Family Business has ______ liability.
(a) Unlimited (b) limited (c) joint
(2) Perishable goods are stored in .
(a) Bonded warehouses (b) Duty paid warehouses
(c) Cold storage warehouses
(3) The process of contracting a business function to someone else is called
as_______.
(a) e-business (b) outsourcing (c) trading
(4) To maintain safety of investment is responsibility of business organization
towards .
(a) Community (b) investors (c) employees
(5) According to the principles of ______ all employees should be given same
treatment.
(a) Authority (b) discipline (c) equity

(a) Co-operative society (1) 1986
(b) e-business (2) Primary function of management
(c) Consumer protection act (3) Father of modem management
(d) F.W.Taylor (4) 1956
(e) Planning (5) Profit objective
(6) Outsourcing
(7) Father of scientific management
(8) Electronic business
(9) End function of management
(10) Service objective
(C) Write only a word or a phrase or a term which can substitute the following
Statements: (5)
4
(1) One man show* type of business organization.
(2) The principle of insurance under which the insurer and insured must show
complete faith towards each other.
(3) Duties, obligations of business organization directed towards welfare of
society.
(4) A consumer dispute redressal agency that handles claims up to ` 20 lakhs.
(5) A process where managers instruct, guide and communicate with
employees.

Q. 2. Distinguish between the following (ANY THREE): [15]

1) Partnership firm and Joint Stock Company.
2) Road transport and Air transport.
3) District forum and state commission.
4) Private company and Public company.
5) Staffing and Controlling.
Q. 3. Write short notes on the following (ANY THREE): [15]

1) Merits of Co-operative society.
2) Disadvantages of e-business.
3) Elements of business ethics.
4) Rights of consumers.
5) Nature of planning.
Q. 4. State with reasons whether the following statements are True or False (ANY
THREE): [15]
1) There is no limit for membership in Joint Hindu Family Business.
2) Overdraft facility is given to savings account holder.
3) Credit cards are mostly used for online payment.
4) Consumer, being the king of the market does not have any responsibilities.
5) Principles of management are rigid.
Q. 5. Write answers of the following (ANY TWO): [10]

1) State the importance of co-ordination.
2) State the responsibilities of business organization towards employees.
3) State Henry Fayol's 'any five' principles of management.
4) State the functions of entrepreneur.
Q. 6. Define Sole Trading concern. Explain its mertis and demertis.

OR [10]
Define Insurance. Explain the various principles of insurance.

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S.Y.J.C. – O.C.

Sr. No. Chapter Name Pg. Nos.

1. FORMS OF BUSINESS ORGANIZATIONS 1 – 26

3. EMERGING MODES OF BUSINESS 49 – 54

4. SOCIAL RESPONSIBILITY OF BUSINESS 55 – 65

1. Sole Trading Concern and Partnership Firm

2. Proprietorship and Joint Hindu Family Firm

: 1 : Forms of Business Organizations

3. Partnership Firm & Joint Hindu Family Firm

: 2 : Forms of Business Organizations

7 Liability of The liability of all the partners Only Karta’s liability is

4. Partnership Firm & Joint Stock Company

: 3 : Forms of Business Organizations

8. Continuity The partnership firm lacks Joint stock company enjoys

5. Co-operative Society & Joint Stock Company

: 4 : Forms of Business Organizations

6. Co-operative Society and Partnership Firm

: 5 : Forms of Business Organizations

7. Private Company and Public Company

4 Number of The minimum number of The minimum number of

: 6 : Forms of Business Organizations

9. Joint Hindu Family Business and Co-operative Society.

10. Sole Trading Concern and Joint Stock Company.

: 8 : Forms of Business Organizations

11. Joint Hindu Family Firm and Joint Stock Company.

: 9 : Forms of Business Organizations

2. A sole trader has a limited liability.

: 10 : Forms of Business Organizations

(d) Lack of expansion and diversification.

: 11 : Forms of Business Organizations

7. Profit motive is the primary objective of a business Organisation.

8. The maximum number of members in a Joint Hindu Family Business is fifteen .

(d) No outsiders allowed.

9. There is no limit for membership in Joint Hindu Business.

10. The liability of a 'Karta' in Joint Hindu Family firm is limited.

: 14 : Forms of Business Organizations

(c) No principal - agent relationship. A partner has a right to represent himself as

12. There is continuity in the Joint Hindu Family Business.

13. Joint Stock Company can raise huge capital.

: 15 : Forms of Business Organizations

14. In partnership agreement may be oral or written.

: 16 : Forms of Business Organizations

15. The liability of every partner is unlimited.

16. Co-operative society differs from other forms of business organisation.

: 17 : Forms of Business Organizations

e) To promote economic interest of the poor.

17. The membership of co-operative society is voluntary.

18. Maximization of profit is the main motto of co-operative society

: 18 : Forms of Business Organizations

(c) Low prices and fair quality of goods

20. The shares of a co-operative society are easily transferable.

: 19 : Forms of Business Organizations

(b) Shares are not listed in stock exchange.

: 20 : Forms of Business Organizations

22. Registration is not compulsory for Joint Stock Companies.

24. A joint stock company ensures perpetual succession.

25. Company form of organisation has developed before industrial revolution.

: 22 : Forms of Business Organizations

EXTRA OBJECTIVE TYPE QUESTIONS