Model Paper 5 Business Studies - Model Paper 5

A maximum investment that is required for equipment in Microenterprises which are engaged in rendering services is-

Stages in the formation of a public company are in the following order:
A. Promotion, Incorporation, capital subscription, commencement of business
B. Incorporation, Capital of Business, Capital Subscription Commencement of Business, Promotion
C. Promotion, Commencement of business
D. Capital Subscription, Promotion, Incorporation, Commencement of Business

Which of the broad categories of industries covers oil refinery and sugar mills?

Limit of investment in small scale industry is ________.

Assertion (A): Double Insurance means when more than one insurance policy is taken to cover the same amount of risk.
Reason (R): In health insurance, the insurer undertakes to pay medical expenses in case of illness of the insured.

Mr. Ankit is a Sole Trader. He runs the 'Prabhat Medical Store'. He needs some money. For this, he met the Branch Manager of a bank. Ankit told the Manager that he needed some such loan as may have the maximum limit fixed. He should be permitted to withdraw as much money as desired up to that limit from the bank. Also, he wants that the interest charged should not be on the maximum limit fixed but on the actual amount withdrawn. The Bank Manager said that they had got such a scheme under which loan could be granted only when the person availing loan kept some property with the bank by way of security. Mr. Ankit became prepared to fulfil this condition. In this way, the loan agreement was finalised between Mr. Ankit and the bank.
Identify this scheme of the bank and explain it.

Mayank has a surplus money of Rs. 25,00,000, which he wants to invest either in equity shares or in preference shares. Two real estate companies (Magic Estate and Skylark Enterprises), with almost the same creditworthiness, are launching their public issue. Magic Estate is coming up with a public issue of preference shares, while Skylark Enterprises is coming up with equity shares. Mayank is confused about the two issues. He consulted his friend Gaurav, who is a portfolio manager and Gaurav convinced him to invest the money in Magic Estate due to 'Preferential Rights of preference shareholders over equity shareholders.
State the 'Preferential Rights' stated by Gaurav, which convinced Mayank to invest in Magic Estate.

When we buy some goods from the market the shopkeeper issues us a Trade Document. At the bottom of this document is written E. & Ο.E. What do you understand from these letters? Explain the justification of these letters.

Pramesh was a successful businessman and owned a departmental store. He was aware of the fact that profit is the reward of risk-bearing. So, in order to earn more profits, he opened two more departmental stores and employed a team of young staff to look after the stores. Initially, the staff was very sincere and Pramesh earned huge profits from his 3 departmental stores. However, over the last two years, his business is running into losses. On close analysis, he found that his staff was not giving much attention to the customers. Moreover, there were many cases of embezzlement (misappropriation of funds) by the employees.
Identify and explain the main cause behind the losses in Pramesh's Business.

To which Auxiliary to Trade has related the following statement?
i. There is a lot of risk in Business.
ii. Information in business has a special significance.
iii. Business can't be run without funds.
iv. To do business material has to be purchased from far off places.

Write the meaning and features of the small-scale industry.

What are the responsibilities of business towards society (public)?

Write the merits of statutory corporations.

After completing a course in gemology, Esha joins her father in the family business of fashion jewellery. Her father owns two showrooms at different locations in the city and operates his business through them. However, Esha intends to expand the business by venturing into online retailing. She also intends to introduce flexible manufacturing with the use of computer networks wherein the marketing department can interact constantly with the production department and get the customized products made as per the requirements of the individual customer.
a. How is the mode of business that Esha intends to adopt different from the one that her father has been following over the years?
b. Distinguish between the two different modes of business as identified in part (a) of the question by giving any four points.

Explain the objectives of business briefly.

Jay owns an event management company in Jaisamaler which provides customized facilities to meet the needs of the customers and ensure a memorable event for them whether they are planning a workshop, a management seminar, marketing or training session. He has a staff of 50 persons. Earlier the salary of the staff members was paid through cheques. The employees had to deposit their cheque in the bank and had to wait for a few days for cheques to be cleared. But now the salary reaches their account on the same day itself with the help of a particular banking service.
In the context of the above case, answer the following questions:
a. What is a cheque?
b. How is a cheque different from a bank draft?
c. Name the banking service which facilitates the transfer of the salary to the employee's account on the same day itself.

Ding Dong Ltd. is planning to float an issue of equity shares in the market in the next four months. The directors of the company are also of the opinion that the company should raise some portion of funds from international capital markets through equity.
In the context of the above case:
a. State any four merits of raising funds through equity shares.
b. Explain briefly any one source through which Ding Dong Ltd. can raise funds through international capital markets.

Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat. It was formed in 1946 and is a brand managed by a cooperative body, the Gujarat Co- operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.6 million milk producers in Gujarat. Amul spurred India's White Revolution, which made the country the world's largest producer of milk and milk products. In the process, Amul became the largest food brand in India and has ventured into markets overseas.
In the context of the above case answer the follwoing qustions:
a. What is a cooperative society?
b. Why do you think Amul was promoted in the form of the cooperative? Explain by giving any four merits of a cooperative society form of business organization.

What do you understand by a sole proprietorship firm? Explain its merits and limitations.

What do you mean by exporting and importing? Mention its advantages and disadvantages.