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Business Services-1 · Gujarat Board (GSEB) STD 11 Commerce (GSEB - English Medium). 23 questions.

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23 questions · timed · auto-graded

Question 13 Marks
What are special godowns? Explain with examples.
Answer
Special (specific) godowns:
Godowns used for storing goods that require special care, treatment and maintenance are called special or specific godowns.
For example, goods such as explosive items, crackers, chemicals, cooking gas, petrol, etc. require special godowns. Perishable goods such as fruits, vegetables, milk and milk products, etc. also need to be stored in such godowns.
These godowns are costlier to build and maintain. They need to adhere to several laws, rules and regulations too. For example, underground tanks needed to store petrol are prepared with special types of bricks and building materials.
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Question 23 Marks
“ Godown creates time utility “ – Discuss.
Answer
  • Today things are produced in bulk with high expectation of demand. Goods are kept in the godowns til its demand arise in the market. Goods are to stored and sold at proper time.
  • Thus time utility increase. Besides all this farm product such as wheat , sugar cane, rice are seasonal crops and require the services of Godown. Umbrella . raincoat , woolen clothes , kite , crackers etc. are sold during occasional only . Its sale is possible due to the service of godown .
  • Due to this service distribution of raw – material and finished is made possible, at proper time. Time utility is more in godown services.
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Question 33 Marks
“ Insurance does no remove risk, but it compensates for the loss resulting from the risk “ – Justify the statement.
Answer
  • Insurance is taken to get economic protection against natural and man made risks. Insurance does nor remove risks.
  • Insurance company also can not make any arrangement to remove risk but pays financial compensation against loss due to risk, company pays within the limit of the amount of insurance.
  • Natural risks such as earthquake , tsunami: cyclone , flood and elements insurance company can not remove, But pays compensation to the insure for the economic loss suffers from such risks.
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Question 43 Marks
Explain the principle of Insurable interest .
Answer
  • The insure takes insurance of certain asset and he/ she is economically beneficiary by its existence and suffer economic loss from its destruction.
  • Regarding this thing the interest of insure is insurable interest e.g. when the house of neighbor is damaged, we really feel sorry but do not bear any economic loss.
  • Our insurance does not exist in property and insurance is taken then it gets cancelled.
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Question 53 Marks
Explain principle of Indemnity .
Answer
  • Principle of Indemnity : the basic objective of insurance contract is to pay compensation to the insured against loss.
  • How much compensation to be paid is determined by this principle , Insurance bears properties is not take to make profit.
  • Compensation is not paid more than loss.
  • If the insurance taken of the asset is of $D$ $6$ lakh and the worth of asset is $D$ $10$ lacs and entire asset is destroyed then insure gets $D$ $6$ lacs as compensation .
  • If the value of asset is $D$ $10$ lacs , insurance taken is of $DD$ $6$ lacs and damage to the asset is $D$ $4$ lacs then proportionate amount compensation of insurance amount $D$ $2,40,000$ will be paid.
  • If the value of property is $D$ $10$ lacs and insurance taken is of $D$ $10$ lacs and damage to the property is $D$ $10$ lacs then entire amount $D$ $10$ lacs will be paid by insurance company .
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Question 63 Marks
What is the principle of Utmost good faith ?
Answer
  • Basic concept of insurance is social. Both the parties of in surance contract should trust each other. Principle of Utmost Good faith means at the time of contract both the parties should mutually give full and complete details regarding everything related to the contract.
  • Even if some detail is ot asked for and is affect the contract one should disclose it to the other party during signing the contract. When the hidden detail are disclosed later on then it is a found no detail should be kept hidden detail is called breach of the principle of Utmost Good Faith and insurance contract gets cancelled .
  • In these circumstances of economic does not get back the amount of premium paid and can not receive the compensation of economic loss.
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Question 73 Marks
“ Transportation service create place utility in products” - Discuss.
Answer
  • Products are sent at the place where they are demanded. This is carried out through transport facility. Products grown in one region is available in another region.
  • This is possible only due to facility of transportation. Place utility is created . the use of marine wealth. Forest areas and the products gown in hilly areas are consumed by city dwellers.
  • Without facility of transportation this would not be used an would remain where it is grown and would perish.
  • It is a fact that due to transportation place utility is created area. Herbs and natural mineral wealth.
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Question 83 Marks
“ Train transportation service in the city is proved back bone of transportation “ – Discuss.
Answer
  • Back bone in human body keeps postur5e and nerves to brain. Transportation functions as backbone It transports goods from one place to another. Passengers also use this facility.
  • It strengthens the economy of city. Due to this service products are sent from one place to another and reach to the interior village and the needs of the people are fulfilled.
  • It connects various cites and as a result continuity of trade and commerce and human life is maintained .
  • That is why it is said that trains running in the cities are backbones of economy of cities.
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Question 93 Marks
“Warehouse service is a blessing for wholesalers “ – Discuss.
Answer
  • Wholesalers purchase goods in bulk from manufacturers. As per requirement the retailers purchase goods from wholesalers and sell them to customers.
  • In these situation reaming goods have got to be stored in warehouse till they receive order from retailers. Goods should be protected too.
  • More over they have to repack goods in big or small packing as per the requirement of retailers . Store of goods packing , protection etc.
  • services are provided through godown so it is true that godown services are blessing to wholesalers.
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Question 103 Marks
How is the sale of goods possible without having delivered goods ?
Answer
  • Receipt of the goods stored in the godown is issued to the owner of the goods. It includes the quantity, of goods , weight and type of goods etc. with complete details .
  • As per requirement for different type of quantity of goods separate receipts are issued .
  • purchase of goods can inspect the goods. If the likes goods and desire to purchase it owner of the goods takes fixed amount from him and writes the same of the purchase on the receipt of the godown and the owner of the goods. Now is the purchaser on the receipt of the godown and the owner of the goods.
  • Now is the purchaser of goods and in this way receipt is transferred the purchaser . In this circumstances stored goods remain in the godown and as it is sold, its ownership is transferred .
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Question 113 Marks
Give information about BRTS service in big cities .
Answer
  • $BRTS$ service means Bus Rapid Transit System. This service is observed in big cities.
  • Local municipal corporation has stared this service for passenger to reach very fast from one place to another. Separate road is allowed to this type of service. It has started where the roads are quite wide.
  • Time duration between two Frequency of buses is very little so that continuity of transportation is maintained .
  • Today no other vehicles are allowed in the separate road kept for $BRTS$. The rates of tickets are quite high compare to those of other ordinary bus service.
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Question 123 Marks
“ Bonded warehouse are a blessing for re – export”. – Explain.
Answer
  • Some times it so happens that a person has no capacity to pay excise on goods he has imported.
  • The goods are kept in the godown which are known as bonded godowns , they are near seaports and front where the goods are imported.
  • These type of godowns offers various services such as repacking of good in big or small size with retaining of its quality and property and it is classified the goods too.
  • The imports. As per order received from foreign countries without paying excise duty exports goods. Thus , bonded godowns are a blessing for importers for re – export.
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Question 133 Marks
Give information about public provident Found scheme of post Department .
Answer
  • Any person can open the account related to public provident fund in a post office, In this account $D$ $500$ yearly is to be subscribed. At present yearly maximum $D$ $1,50,000$ are deposited in this account. Its time period is $15$ years.
  • After $15$ years the amount of this account is given back with interest to the account holder. The amount of subscription is deducted from income tax.
  • If the account holder dies before stipulated time , the amount is given to the nominee whose name has registered as successor.
  • As per new current rule after the stipulated period is over, account can be extended to $5$ more years on application. It can be extended for as many times as you wish.
  • This account can not be closed before stipulated period.
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Question 143 Marks
Why the rent of special warehouses is high ?
Answer
  • Special warehouses offer special services to preserve the properties of goods kept in the godoen. Easily flammable substances are stored in underground tanks.
  • Evaporated substances are kept in air – tight containers. Fruits, Vegetables , Fruit juice , by – products of milk etc. are kept in cold storage, Special type of bricks are used to preserve poisonous chemicals and substances.
  • According to the speciality of each product care is taken in special godowns so the rent of such special godowns , is higher than ordinary godowns.
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Question 153 Marks
“ Warehouse brings stability in the price of products “ – Explain.
Answer
  • Now –a – days with the expectation of demand. Large scale production is carried out. Entire production is not brought in the market at a time .
  • If so happens supply increase in comparison to its demand and the price of product decrease. So produced goods are kept in the godown and sent in the market as per requirement.
  • Remaining production is stored in the godown, when shortage of this product occurs in the market, its price increase . In this circumstances stored goods is brought in the market and price is lowered.
  • In this way prices of product remains stable due to godown .
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Question 163 Marks
“ post Department is the most reliable among people “ – Discuss.
Answer
  • Post Department is the ownership of Government. Post department is responsible for all transaction through it. Saving account opened in post office.
  • Recurring account , time deposit and various types of National Savings Certificates , Kisan Vikas patra etc. are purchased from post office and on which fixed interest at fixed period is paid and amount with interest is paid at fixed period .
  • Registered post and parcels are without fail received by the party. In case if it is not received , post department has to clarify the reason.
  • Compare to private courier service, post department is more reliable and popular among people.
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Question 173 Marks
“ Endowment policy is more popular than life Insurance “ – Explain.
Answer
  • The amount of Life Insurance policy is given to the heir of the insured after his death. So the amount paid by insure as premium can not be used by him.
  • If he holds the insurance policy of endowment , then his successors get the money after his death. If the insured has become more popular than Life Insurance.
  • This policy is more useful to him/ her to their successors.
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Question 183 Marks
Explain - “ principle of indemnity and the principle of subrogation are not applicable to “ Life Insurance. ?
Answer
  • Human life is valuable. Its value can not be assessed. Everybody according to their capacity to pay the amount of premium decides the amount of life Insurance and the same amount with fixed rate of interest is paid to their heirs.
  • Here the principle of indemnity is not applicable.
  • As per principle of subrogation if the property is damaged then its compensation is paid , thereafter, the ownership of damaged property is damaged to the insurance company.
  • But to this principle is not applicable to life insurance. Amount of insurance of deceased is paid to their heir but the dead body is submitted to their and family members, Insurance company has not right of ownership on dead of the deceased.
  • Principle of subrogation is not applicable to life Insurance .
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Question 193 Marks
What is the importance of principle of insurance in insurance contract ?
Answer
  • Like other contacts insurance contract is a legal contract. Both the parties of insurance contract have to strictly obey the principles related to insurance .
  • Failing to implement this principles.
  • Means cancellation of insurance contract and one who has taken insurance is not paid financial compensation of insurance against risk .
  • Insurance company calculates compensation against loss as per these principles.
  • Insurance co0ntact gets cancelled and insurance company is free from its responsibility to make payments if the principle of utmost good faith and principle of insurable interest is not followed.
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Question 203 Marks
A person has a car worth ₹10 lakhs and has taken insurance of ₹7 lakhs. B person has a car worth ₹6 lakhs and has taken insurance of ₹4 lakhs. C person has a car worth ₹12 lakhs and has taken insurance of ₹12 lakhs. Based on the above information, answer the following questions:
(i) If person A's car is completely damaged, how much compensation will the insurance company pay?
(ii) If person B's car suffers partial damage resulting in a loss of ₹3 lakhs, how much compensation will the insurance company pay?
(iii) If person C's car is completely damaged, how much compensation will the insurance company pay?
Answer
(i) Person A's car completely damaged (Loss = ₹10 lakhs)
Compensation = (Insured Amount / Actual Value) × Loss
= (7,00,000 / 10,00,000) × 10,00,000 = ₹7,00,000

(ii) Person B's car partially damaged (Loss = ₹3 lakhs)
Compensation = (Insured Amount / Actual Value) × Loss
= (4,00,000 / 6,00,000) × 3,00,000 = ₹2,00,000

(iii) Person C's car completely damaged (Loss = ₹12 lakhs)
Since insured amount = actual value, full compensation is paid.
Compensation = ₹12,00,000
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Question 213 Marks
ABC Bank is a prominent financial institution that plays a crucial role in the commerce ecosystem by providing essential banking services. The bank accepts deposits from the public through various accounts, such as saving, current, recurring, and fixed deposit accounts, offering interest rates that help maintain depositor trust. Additionally, ABC Bank lends money at higher interest rates than it pays to depositors, creating profit margins that support its operations. The bank also invests prudently in government securities and financially sound units, ensuring liquidity and safety. To manage short-term financial needs, ABC Bank engages in inter-banking transactions facilitated by the Reserve Bank of India, enhancing its capacity to support both individual and commercial customers effectively.
(1) What essential services does ABC Bank provide in the commerce ecosystem?
(2) How does ABC Bank accept deposits from customers?
(3) What is the bank's primary method of generating profit?
Answer
(1) ABC Bank provides essential services such as accepting deposits, lending money, investing, and facilitating inter-banking transactions.
(2) ABC Bank accepts deposits through saving, current, recurring, and fixed deposit accounts.
(3) The bank generates profit by lending money at higher interest rates than those paid to depositors.
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Question 223 Marks
XYZ Bank has adapted to the evolving demands of its customers by offering a range of subsidiary functions beyond its core banking operations. Recognizing the need for efficiency and convenience, the bank facilitates various financial transactions for its account holders. It manages cheque payments and collections on behalf of customers, allowing seamless payments for utilities and services like electricity and insurance. In the realm of foreign trade, XYZ Bank handles currency transactions and provides vital support through letters of credit, ensuring reliability and smooth financial dealings. The bank also issues traveller's cheques, aiding customers during their travels, and offers demand drafts for secure money transfers.Additionally, XYZ Bank acts as an underwriter for new companies seeking to raise capital, earning commissions while helping businesses thrive. By providing solvency certificates and a host of modern services such as ATMs and debit cards, XYZ Bank continually enhances customer satisfaction, saving them time and effort in their financial dealings.
(1) What subsidiary functions does XYZ Bank offer to its customers?
(2) How does XYZ Bank facilitate financial transactions for its account holders?
(3) What role does the bank play in currency transactions related to foreign trade?
Answer
(1) XYZ Bank offers subsidiary functions such as cheque handling, utility payments, currency transactions, traveller's cheques, letters of credit, demand drafts, and underwriting services.
(2) The bank facilitates financial transactions by managing cheque payments and collections, enabling customers to pay bills and transfer money effortlessly.
(3) XYZ Bank maintains currency transactions for foreign trade by providing foreign exchange services and handling related documentation.
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Question 233 Marks
In the modern banking landscape, banks offer various subsidiary services beyond traditional functions. They manage customer transactions, facilitate foreign currency exchanges, issue traveller's cheques, and provide letters of credit for international trade. Banks also offer demand drafts for secure money transfers, underwrite shares for new  companies, and furnish credit information about clients. These services enhance customer convenience and foster strong relationships between banks and their clients.
(1) What subsidiary services do banks provide?
(2) How do banks assist with foreign currency transactions?
(3) What is the purpose of a traveller's cheque?
Answer
(1) Banks provide services like transaction management, foreign currency exchange, and traveller's cheques.
(2) Banks handle foreign currency transactions for import-export activities.
(3) A traveller's cheque ensures safe monetary transactions while traveling.
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