Students can Download 1st PUC Business Studies Previous Year Question Paper March 2020 (South), Karnataka 1st PUC Business Studies Model Question Papers with Answers helps you to revise the complete Karnataka State Board Syllabus.

Karnataka 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Time: 3.15 Hours
Max Marks: 100

Instructions to candidates:

  1. Write the serial number of questions properly as given in the question paper while answering
  2. Write the correct and complete answers.

Section – A

I. Answer any ten of following questions in a word or a sentence each. While answering Multiple Choice Questions, write the serial number/alphabet of the correct choice and write the answer corresponding to it. Each question carries one mark: ( 10 × 1 = 10 )

Question 1.
What is Hundi?
Answer:
Hundi is an instrument of exchange, which was prominent in the Indian subcontinent. It involved a contract which and warrant the payment of money, the promise or order which is unconditionally capable of change through transfer by valid negotiation.

Question 2.
Provision of residential accommodation to the members at reasonable rates is the objective of
(a) Producer’s co-operative
(b) Consumer co-operative
(c) Housing co-operative
(d) Credit co-operative
Answer:
(c) Housing co-operative

Question 3.
Give an example for a government company.
Answer:
Indian Telephone Industries Ltd; BSNL, BHEL.

Question 4.
Expand EFT.
Answer:
Electronic Fund Transfer.

Question 5.
The payment mechanism most typical to e-business is
(a) Cash on Delivery
(b) Cheques
(c) Credit and debit cards
(d) e-cash
Answer:
(d) e-cash

Question 6.
How is land pollution caused?
Answer:
Dumping of toxic waste.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 7.
Who are promoters?
Answer:
A person or group of persons who conceive the idea of setting up a new business, assess its feasibility and take necessary steps to arrange the basic requirements, and establish a business unit say, a Company and put into operation is known as a promoter.

Question 8.
What is the tenure (period) of commercial papers?
Answer:
90 days to 364 days.

Question 9.
In which year start-up India Scheme was implemented?
Answer:
16 January 2016

Question 10.
Which of the following does not come under the types of Itinerant retailers?
(a) Peddlers
(b) Market Traders
(c) Cheap Jacks
(d) Street Stall Holders
Answer:
(d) Street Stall Holders

Question 11.
How many commodity Boards are working in India?
Answer:
Seven.

Question 12.
Which one of the following modes of entry requires a higher level of greatest risks?
(a) Licensing
(b) Franchising
(c) Contract manufacturing
(d) Joint venture
Answer:
(d) Joint venture.

Section – B

II. Answer any ten of the following questions in two or three sentences each. Each question carries 2 marks: ( 10 × 2 = 20 )

Question 13.
What is Business?
Answer:
Business is an economic activity involving the production and sale of goods and services undertaken with the motive of earning profit by satisfying human needs in society.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 14.
Define Partnership.
Answer:
According to Section 4(2) Indian Partnership Act, 192 defines partnership as “the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.”

Question 15.
State any two limitations of Departmental undertakings.
Answer:
The two limitations of the departmental undertaking are:
(a) Departmental undertakings fail to provide flexibility, which is essential for the smooth operation of the business.
(b) There is a lot of political interference through the ministry.

Question 16.
Mention any two types of Banks.
Answer:

Question 17.
Distinguish between e-business and e-commerce.
Answer:
1st PUC Business Studies Previous Year Question Paper March 2020 (South) 1

Question 18.
What is the social responsibility of business?
Answer:
Various activities which provide for the welfare of the society along with the earning of profit for the firm are termed as “Social Responsibility of Business”.

Question 19.
Name any two stages in the formation of a company.
Answer:
(a) Promotion stage.
(b) Incorporation stage.

Question 20.
Write the meaning of retained earnings.
Answer:
A company generally doesn’t distribute all its earnings amongst the shareholder as dividends. A portion of the net earnings may be retained by the business for use in the future.

Question 21.
State any two institutions set up by the government for small and rural industries?
Answer:
(a) National Bank for Agriculture and Rural Development (NABARD).
(b) National Small Industries Corporation (N SIC).

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 22.
Give the meaning of vending machines?
Answer:
Automated vending machines are the newest revolution in marketing methods. Coin-operated vending machines are proving useful in selling several products such as hot beverages, platform tickets, milk, soft drinks, chocolates, newspaper, etc. in many countries.

Question 23.
What do you mean by Franchising?
Answer:
According to Charles W.L. Hill, “Franchising is basically a specialized form of licensing iñ which the franchisor not only sells the intangible property to the franchisee but also insists that the franchisee agrees to abide by strict rules ás to how it does business.”

Question 24.
State any two measures and schemes introduced by the government to promote international business?
Answer:
(a) Duty drawback scheme.
(b) Export manufacturing under the bond scheme.

Section – C

III. Answer any seven of the following questions in 10-12 sentences. Each question carries 4 marks: ( 7 × 4 = 28 )

Question 25.
Explain briefly the different types of manufacturing industries.
Answer:
The various types of industries are:
Primary industries: Primary industries refer to industries that are concerned with the production of goods mainly with the help of nature. Mining, agriculture, forestry, fishing, etc. are examples of primary industries. Primary industries can be classified as:

(a) Genetic industries: Genetic industries refer to those activities which are undertaken for reproducing or multiplying plants and animals with the object of making a profit from their sales. Example: Nurseries raising seedlings and plants, cattle breeding, poultry fanning, etc.

(b) Extractive industries: Extractive industries refer to those activities which are concerned with the extraction or production of wealth from the soil, air, water, or from beneath the surface of the earth. Example: Agriculture, mining, fishing, forestry, hunting, fruit gathering, etc.

Secondary industries: Secondary industries refer to industries where human labor plays a more important role than nature. Secondary industries can be classified into:
(a) Manufacturing industries: Manufacturing industries refer to activities concerned with the conversion of raw materials or semi-finished goods into finished goods.

Example: Conversion of raw cotton into cotton textiles; conversion of raw jute into jute products; production of sugar from sugarcane, etc. Manufacturing industries may be sub-divided into four types. They are:
1. Analytical industries: Analytical industries refer to those manufacturing industries which produce many types of products by analyzing, i.e. separating, the same basic raw materials into different products. Example: In oil refining, the same crude oil is analyzed or separated into different products like petrol, diesel oil, kerosene, lubricating oil, etc.

2. Synthetic industries: Synthetic industries refer to all those manufacturing industries where various materials are combined together in the manufacturing process to manufacture a new product. Example: The cement industry is a synthetic industry, in the sense that cement is produced by combining many materials, such as gypsum, coal, etc.

3. Processing industries: Processing industries refer to those manufacturing industries where different components are processed through different processes into a finished product. The Paper industry, textile industry, etc. are examples of processing industries.

4. Assembling industries: Assembling industries refer to those manufacturing industries where different component parts already manufactured are assembled into final products. The automobile industry is an example of assembling industries.

(b) Construction industries: Construction industries refer to those activities which are concerned with the creation of infrastructure necessary for economic development. In other words, they refer to those who are concerned with the construction of buildings, roads, bridges, railway lines, dams canals, etc.

Tertiary industries: Tertiary industries refer to industries that provide support services to primary and secondary industries and also to activities relating to trade. These days, services also are regarded as industries and are called tertiary industries. These industries are regarded as part of commerce, i.e. as auxiliaries to trade.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 26.
Briefly explain any four features of Global Enterprises.
Answer:
Features:
(a) huge capital resources: These enterprises are characterized by possessing huge financial resources and the ability to raise funds from different sources. Because of their financial strength, they are able to survive under all circumstances.

(b) Foreign collaboration: Global enterprises usually enter into agreements with Indian companies pertaining to the sale of technology, production of goods, use of brand names for the final products, etc.

(c) Advanced technology: These enterprises possess technological superiorities in their methods of production. They are able to conform to international standards and quality specifications. This leads to the industrial progress of the country.

(d) Product innovation:’These enterprises are characterized by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs of existing products.

Question 27.
Briefly explain any four functions of warehousing.
Answer:
Usually, goods are not sold or consumed immediately after production. They are held in stock to be available as and when required. A special arrangement must be made for the storage of goods to prevent loss or damage. Warehousing helps business firms to overcome the problem of storage and facilitates the availability of goods when needed.

Functions of Warehousing
(a) Consolidation: The warehouse receives and consolidates materials/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.

(b) Break the Bulk: The warehouse divides the bulk quantity of goods received from the production plants into smaller quantities and then transported according to the requirements of clients to their places of business.

(c) Stock Piling Goods or Raw Materials which are not required immediately for sale or manufacturing are stored in warehouses to be made available to business depending on customers’ demand. This type of warehouse is also known as the storehouse of surplus goods.

(d) Value Added Services: Provision of value-added «services such as in transit mixing, packaging, and labeling is also a function of modern warehousing.

(e) Price Stabilization: Warehousing performs the function of stabilizing prices by adjusting the supply of goods according to demand. Financing warehouse owners provide loans to the owners on the security of goods and further supply goods on credit terms to customers. The warehouse keepers issue a receipt when goods are kept in the warehouse. This receipt can be used as security to get loans from banks and owners. In this way, it also helps in financing.

Question 28.
Explain briefly the steps involved in online transactions.
Answer:
The following steps are involved in online trading:
(a) Registration: Before online shopping, one has to register with the online vendor by filling- up a registration form. Registration means that you have an ‘account’ with the online vendor. Among various details that need to be filled in is a ‘password’ as the sections relating to your ‘account’.

(b) Selection of product: The buyer should select the product from the menu given on the website. For this purpose, the buyer might have to visit the website of two or more vendors and compare price and quantity.

(c) Placing an order: While browsing the website, the buyer should drop the selected item in his shopping cart. Once the products are selected and the order is placed sales take place.

(d) Payment mechanism: When the sale takes place, the buyer should give his payment option. The payment can be made in any one of the following ways:
(a) Cash-on-Delivery (COD): As is clear from the name, payment for the goods ordered online may be made in cash at the time of physical delivery of goods.

(b) Cheque: The buyer may send a cheque to the online vendor. In this case, the goods are delivered upon realization of the cheque.

(c) Net-banking transfer: The buyer may instruct his bank to electronically transfer the amount from his account to the account of the online vendor.

(d) Debit card or credit card: Popularly refêrred to as ‘plastic money,’ these cards are the most widely used medium for online transactions.

  • A credit card allows its holder to make purchases on credit. Later the issuing bank transfers the amount to the online vendor’s account and the buyer’s account is debited.
  • A debit card allows its holder to make purchases up to a specified amount. The amount is deducted electronically as and when the purchase is made.

(e) Digital cash: This is a form of electronic currency that exists only in cyberspace. This type of currency has no real physical properties but offers the ability to use real currency in an electronic format.

Question 29.
Explain the social responsibility of business towards.
(a) Shareholders
(b) Consumers
Answer:
Social responsibility of business towards shareholders:
(a) A fair rate of dividend should be regularly paid by the business enterprises to their owners.
(b) Management techniques should be effective and efficient so that the net present value of the business is maximized.
(c) Owners should be given the right to participate in the affairs of the enterprise.
(d) The tendency towards the growth of ‘Oligarchic management’ should be arrested.
(e) The owners should be given the full information regarding the working of the company. In other words, accurate and comprehensive reports have to be supplied.
(f) Financial information has to be disclosed and doubts, have to be clarified.
(g) Chairman and directors of the company should be easily accessible to the owner.

Social responsibility of business towards consumer:
(a) Ensuring availability of products in the right quantity, at the right place, and at the right time.
(b) Maintaining the quality of the goods, increasing the quality to the maximum extent so as to compete with any international product.
(e) Charging reasonable prices to its products.
(d) Correct weights and measures have to be used.
(e) The company must provide after-sale service for maintenance of goods.
(f) The business firms should avoid restrictive trade practices and see that full justice is done to the amount that is spent by a consumer.
(g) Constant investigation and discovery of growing wants of consumers, giving importance to research and development of new products that satisfy their wants.
(h) Taking all such measures which promote consumer satisfaction, interest, and welfare.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 30.
Explain briefly any four clauses of the Memorandum of Association.
Answer:
(a) Name Clause: It contains the name by which the company will be established. The approval of the proposed name is taken in advance from the Registrar of the companies.

(b) Objects Clause: It contains a detailed description of the objects and rights of the company, for which it is being established. A company can undertake only those activities which are mentioned in the objects clause of its memorandum.

(c) Capital Clause: It contains the proposed authorized capital of the company. It gives the classification of the authorized capital into various types of shares, (like equity and preference shares) with their numbers and nominal value. A company is not allowed to raise more capital than the amount mentioned as its authorized capital. However, the company is permitted to alter this clause as per the guidelines prescribed by the Companies Act.

(d) Liability Clause: It contains financial limits up to which the shareholders are liable to pay off to the outsiders in the event of the company being dissolved or closed down.

Question 31.
Explain briefly the financial needs of a business.
Answer:
(a) To purchase fixed assets: Every type of business needs some fixed assets like land and building, furniture, machinery, etc. A large amount of money is required for the purchase of these assets.
(b) To meet day-to-day expenses: After the establishment of a business, funds are needed to carry out day-to-day operations.
(c) To fund business growth: Growth of business may include expansion of the existing line of business as well as adding new lines. To finance such, growth, one needs more funds.
(d) To bridge the time gap between production and sales: The amount spent on production is realized only when sales are made. Normally, there is a time gap between production and sales and also between sales and realization of cash. Hence during this interval, expenses continue to be incurred, for which funds are required.
(e) To meet contingencies: Funds are always required to meet the ups and downs of business and for some unforeseen problems.

Question 32.
Explain the merits of lease financing as a source of business finance.
Answer:
Merits of lease financing
(a) A lease arrangement may impose certain restrictions on the use of assets. For example, it may not allow the lessee to make any alteration or modification in the asset.
(b) The normal business operations may be affected in case the lease is not renewed.
(c) It may result in higher payout obligation in case the equipment is not found useful and the lessee opts for premature termination of the lease agreement.
(d) The lessee never becomes the owner of the asset. It deprives him of the residual value of the asset.

Limitations
(a) It enables the lessee to acquire the asset with a lower investment.
(b) Simple documentation makes it easier to finance assets.
(c) Lease rentals paid by the lessee are deductible for computing taxable profits.
(d) It provides finance without diluting the ownership or control of the business.
(e) The lease agreement does not affect the debt-raising capacity of an enterprise.
(f) The risk of obsolescence is borne by the lesser. This allows greater flexibility for the lessee to replace the asset.

Question 33.
Explain any four ways to fund starts up’s.
Answer:
The funding for startups can also be availed in the following ways:
(a) Bootstrapping: Commonly known as self-financing it is considered as the first funding option because by stretching out your personal savings and resources.

(b) Angel Investment: Angel investors are individuals with surplus cash who have a keen interest to invest in upcoming startups.

(c) Venture capital: There are professionally managed funds that are invested in companies that have huge potential.

(d) Crowdfunding: It is the pooling of resources by a group of people for a common goal.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 34.
Explain briefly any four services of retailers to manufactures and wholesalers.
Answer:
Retailers services towards manufacture are:
(a) Help in the distribution of goods: A retailer’s most important service to the wholesalers and manufacturers is to provide help in the distribution of their products by making these available to the final consumers.

(b) Enabling large-scale operations: On account of the retailer’s services, the manufacturers and wholesalers are freed from the botheration of making individual sales to consumers in small quantities. This enables them to operate at a relatively large scale, and thereby fully concentrate on their other activities.

(c) Collecting market information: As retailers remain in direct and constant touch with the buyers, they serve as an important source of collecting market information about the tastes, preferences, and attitudes of customers. Such information is considered very useful in making important marketing decisions in an organization.

(d) Help in promotion: From time to time, manufacturers and distributors have to carry on various promotional âctivities in order to increase the sale of their products. For example, they have to advertise their products and offer short-term incentives in the form of coupons, free gifts, sales contests, and so on. Retailers participate în these activities in various ways and, thereby, help in promoting the sale of the products.

Section – D

IV. Answer any four of the following questions in 20-25 sentences each. Each question carries 8 marks: ( 4 × 8 = 32 )

Question 35.
Explain any four merits and four demerits of sole proprietorship form of business organization.
Answer:
Advantages of Sole Proprietorship:
(a) Quick decision making: A sole proprietor enjoys a considerable degree of freedom in making business decisions. Further, the decision-making is prompt because there is no need to consult others.

(b) Confidentiality of information: Sole decision-making authority enables the proprietor to keep all the information related to business operations confidential and maintain secrecy.

(c) Direct incentive: The need to share profits does not arise as he/she is the single owner. This provides a maximum incentive to the sole trader to work hard.

(d) Sense of accomplishment: There is a personal satisfaction involved in working for oneself. The knowledge that one is responsible for the success of the business not only contributes to self-satisfaction but also instills in the individual a sense of accomplishment and confidence in one’s abilities.

Limitations of a sole proprietorship:
(a) Limited resources: Resources of a sole proprietor are limited to his/her personal savings and borrowings from others. Banks and other lending institutions may hesitate to extend a long-term loan to a sole proprietor.

(b) Limited life of a business concern: In the eyes of the law, the proprietorship and the owner are considered one and the same. Death, insolvency, or illness of a proprietor affects the business and can lead to its closure.

(c) Unlimited liability: If the business fails, the creditors can recover their dues not merely from the business assets, but also from the personal assets of the proprietor. A poor decision or an unfavorable circumstance can create a serious financial burden on the owners.

(d) Limited managerial ability: The owner has to assume the responsibility of varied managerial tasks such as purchasing, selling, financing, etc. It is rare to find an individual who excels in all these areas. Thus, decision-making may not be balanced in all cases.

(e) Competition of big industries: Nowadays in a modem world demands are more. To full fill, those numerous demands big industries were formed. By producing goods on large scale, supply them at low rates and also provide another number of facilities. As such sole trading concern is unable to complete with them.

Question 36.
Explain the features of a joint-stock company.
Answer:
(a) Artificial person: Just like an individual, who takes birth, grows, enters into relationships, and dies, a joint-stock company takes birth, grows, enters into relationships, and dies. However, it is called an artificial person as to its birth, existence, and death are regulated by law arid it does not possess phýsical attributes like that of a normal person.

(b) Legal formation: No single indìvidtial or a group of individuals can start a business and call it a joint-stock company. A joint-stock company comes into existence only when it has been registered after completioñ of all formalities required by the Indian Companies Act., 2013.

(c) Separate legal entity: Being an artificial person a company has its own legal entity separate from its members. It can own assets or property, enters into contracts, sue, or can be sued by anyone in the court of law. Its shareholders cannot be held liable for any conduct of the company.

(d) Perpetual existence: A joint-stock company continues to exist as long as it fulfills the requirements of law. It is not affected by the death, lunacy, insolvency, or retirement of any of its members.

(e) Common seal: A joint-stock company has a seal, which is used while dealing with others or entering into contracts with outsiders. It is called a common seal as it can be used by any officer at any level of the organization working on behalf of the company. Any document, on which the company’s seal ‘is put and is duly signed bý any official of the company, becomes binding on the company.

(f) Association of persons: A company is a voluntary association of persons established for-profit motive. A private company must have at least 2 persons and the public limited company must have at least 7 persons to get it registered. The maximum number of persons required for the registration in the case of a private company is 50 and in the case of a public company, there is no maximum limit.

(g) Limited liability: The liability of the shareholders is limited to the extent of the face value of the shares held by them. The shareholders are not liable personally for the paýment of the debt of the company.

(h) Transferability of shares: The shares of a public limited company are freely transferable and can be purchased and sold through the stock exchanges. A shareholder of a public limited company can transfer his shares without the consent of others except in the case of private companies.

(i) Large capital: A joint-stock company can raise a large amount of capital because the number of persons contributing towards capital is more in number when compared to sole proprietorship or partnership.

(j) Democratic management: Joint stock companies have democratic management and control. That is, even though the shareholders are owners of the company, all of them cannot participate in ‘the management of the company. Normally, the shareholders elect representatives from among themselves known as ‘Directors’ to manage the affairs of the company.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 37.
Explain the principles of Insurance.
Answer:
(a) Principle of Utmost Good Faith: According to this principle, the insurance contract must be signed by both parties (i.e. insurer and insured) in absolute good faith or belief or trust. The person getting insured must willingly disclose and surrender to the insurer his complete true information regarding the subject matter of insurance.

Example: If any person has taken a life insurance policy by hiding the fact that he is a cancer patient and later on if he dies because of cancer then the Insurance Company can refuse to pay the compensation as the fact was hidden by the insured.

(b) Principle of Insurable Interest: As per this principle, the insured must have an insurable interest in the subject matter of insurance. It means the insured should gain by the existence or safety and lose by the destruction of the subject matter of insurance.

Example: If a person has taken the loan against the security of factory premises then the lender can take the fire insurance policy of that factory without being the owner of the factory because he has a financial interest in the factory premises.

(c) Principle of Indemnity: According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. The insurance contract is not made for making a profit else its sole purpose is to give compensation in case of any damage or loss.

Example: A person insured a car for 5 lakhs against damage or an accident case. Due to the accident he suffered a loss of 3 lakhs, then the insurance company will compensate him 3 lakhs not only the policy amount i.e. but 5 lakhs as the purpose behind it is also to compensate not to make a profit.

(d) Principle of Contribution: According to this principle, the insured can claim the compensation only to the extent of actual loss either from all insurers in a proportion or from any one insurer.

Examp1e A person gets his house insured against fire for 50,000 with insurer A and for 25,000 with insurer B. A loss of 37,500 occurred. Then A is liable to pay 25,000 and. B’s is liable to pay 12,500.

(e) Principle of Subrogation: According to the principle of subrogation, when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer.

Example: If a person receives Rs. I lakh for his or her damaged stock, then the ownership of the stock will be transferred to the insurance company and the person will hold no control over the stock.

(f) Principle of Mitigation of Loss: According to the Principle of mitigation of loss, the insured must always try his level best to minimize the loss of his insured property, in case of uncertain events like a fire outbreak or blast, etc. The insured must not neglect and behave irresponsibly during such events just because the property is insured.

Example: If a person has insured his house against re, then, in case of fire, he or she should take all possible measures to minimize the damage to the property exactly in the manner he or she would have done in absence of the insurance:

(g) Principle of Causa Proxima: Principle of Causa Proxima (a Latin phrase), or in simple English words, the Principle of Proximate (i.e. Nearest) Cause, means when a loss is caused by more than one causes, the proximate or the nearest cause should be taken into consideration to decide the liability of the insurer.

Example: If an individual suffers a loss in a fire accident, then this should already be a part of the contract in order for this person to claim the insurance amount.

Question 38.
Explain the merits and limitations of preference shares as a source of finance.
Answer:
Merits
(a) Preference shares provide reasonably steady income in the form of fixed rate of return and safety of the investment.
(b) Preference shares are useful for those investors who want a fixed rate of return with comparatively low risk.
(c) It does not affect the control of equity shareholders over the management as preference shareholders don’t have voting rights.
(d) Payment of fixed rate of dividend to preference shares may enable a company to declare higher rates of dividend for the equity shareholders in good times.
(e) Preference shareholders have a preferential right of repayment over equity shareholders in the event of liquidation of a company.

Demerits
(a) Preference shares are not suitable for those investors who are willing to take risks and are interested in higher returns.
(b) Preference capital dilutes the claims of equity shareholders over assets of the company.
(c) The rate of dividend on preference shares is generally higher than the rate of interest on debentures.
(d) As the dividend on these shares is to be paid only when the company earns profit, there is no assured return for the investors. Thus, these shares may not be very attractive to investors.
(e) The dividend paid is not deductible from profits as an expense. Thus, there is no tax saving as in the case of interest on loans.

Question 39.
Explain the role of commerce and industry associations in the promotion of internal trade.
Answer:
(a) Transportation or interstate movement of goods: The Chambers of Commerce and Industry help in many activities concerning the interstate movement of goods which includes registration of vehicles, surface transport policies, construction of highways and roads.

(b) Marketing of agro products and related issues: The associations of agriculturists and other federations play an important role in the marketing of agro products. Streamlining of local subsidies and marketing policies of organizations selling agro products are some of the areas where the Chambers of Commerce and Industry can really intervene and interact with concerned agencies like farming cooperatives.

(c) Weights and measures and prevention of duplication brands: Laws relating to weights and Measures and protection of brands are necessary to protect the interest of the consumers as well as the traders. They need to be enforced strictly. The Chambers of Commerce and Industry interact with the government to formulate such laws and take action against those who violate rules and regulations.

(d) Promoting sound infrastructure: A sound infrastructure like road, port, electricity, railways, etc. plays a catalytic role in promoting trade. The Chambers of Commerce and Industry in collaboration with the government needs to take up heavy investment projects.

(e) Labour legislation: A simple and flexible labor legislation is helpfùl in running industries, maximizing production, and generating employment. The Chambers of Commerce and Industry and the government are constantly interacting on issues like labor laws, retrenchment, etc.

(f) Octroi and other local levies: Octroi and local taxes are the important sources of revenue of the local government. These are collected on the goods and from people entering the state or the municipal limits. The government and Chambers of Commerce should ensure that their imposition is not at the cost of smooth transportation and local trade.

(g) Harmonisation of sales tax structure and value-added tax: The Chambers of Commerce and Industry play an important role in interacting with the government to harmonize the sales tax structure in different states.

(h) Excise duty: Central excise is the chief source of the government revenue levied across states by the central government. The excise policy plays an important role in the pricing mechanism and hence the associations need to interact with the government to ensure streamlining of excise duties.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 40.
Explain briefly the steps involved in the import procedure.
Answer:
(a) Trade inquiry: The importing firm approaches the export firms with the help of trade inquiry they collecting information about their export prices and terms of exports. After receiving a trade inquiry, the exporter will prepare a quotation called a proforma invoice.

(b) Procurement of import license: There are certain goods that can be imported freely, while others need licensing. The importer needs to consult the Export-Import (EXM) policy in force to know whether the goods that he or she wants to import are subject to import licensing.

(c) Obtaining foreign exchange: Since the supplier in the context of an import transaàtion resides in a foreign country, he/she demands payment in a foreign currency Payment in foreign currency involves the exchange of Indian currency into foreign currency.

(d) Placing order or indent: After obtaining the import license, the importer placeš an import order or indent with the exporter for the supply of the specified products. The import order contains information about the price, quantity size, grade, and quality of goods ordered and the instructions relating to packing, shipping, ports of shipment and destination, etc

(e) Arranging for finance: The importer should make arrangements in advance to pay to the exporter on the arrival of goods at the port. Advanced planning for financing imports is necessary so as to avoid huge demurrages (i.e., penalties) on the imported goods lying uncleared at the port for want of payments.

(f) Obtaining a letter of credit: If the payment terms agreed between the importer and the overseas supplier is a letter of credit, then the importer should obtain the letter of credit from its bank and forward it to the overseas supplier.

(g) Receipt of shipment advice: After loading the goods on the vessel, the overseas supplier dispatches the shipment advice to the importer. Shipment advice contains information about the shipment of goods.

(h) Retirement of import documents: Having shipped the goods, the overseas supplier prepares a set of necessary documents as per the terms of contract and letter of credit and hands it over to his or her banker for their onward transmission and negotiation to the importer in the manner as specified in the letter of credit.

(i) Arrival of goods: Goods are shipped by the overseas supplier as per the contract. The person in charge of the carrier (ship or airway) informs the officer in charge at the dock or the airport about the arrival of goods in the importing country. He provides the document called import general manifest. import general manifest is a document that contains the details of the imported goods.

(j) Customs clearance and release of goods: All the goods imported into India have to pass through customs clearance after they cross the Indian borders. Customs clearance is a somewhat tedious process and calls for completing a number of formalities. It is, therefore, advised that importers appoint C&F agents who are well versed with such formalities and play an important role in getting the good’s customs cleared.

Section – E (PRACTICAL ORIENTED QUESTIONS)

V. Answer any two of the following questions: ( 2 × 5 = 10 )

Question 41.
You are planning to start a new business. Make a list of any five factors you consider while selecting a suitable form of business organization.
Answer:
The five-factor that should be considered while selecting a suitable form of business organization are:
(a) Cost
(b) Liability
(c) Continuity
(d) Management ability
(e) Degree of control
(f) Capital consideration
(g) Nature of business.

Question 42.
As a businessman having concern for environmental protection. Suggest any five measures to control environmental pollution.
Answer:
Five measures to control environmental pollution are:
(a) Definite commitment by top management of the enterprise to create, maintain and develop work culture for environmental protection and pollution prevention.
(b) Complying with laws and regulations enacted by the government for the prevention of pollution.
(c) Participation in government programs relating to the management of hazardous substances, plantation of trees, and checking deforestation.
(d) Ensuring that commitment to environmental protection is shared throughout the enterprise by all divisions and employees.
(e) Arranging educational workshops and training materials to share technical information and experience with suppliers, dealers, and customers to get them actively involved in pollution control programs.

KSEEB Solutions 1st PUC Business Studies Previous Year Question Paper March 2020 (South)

Question 43.
Being a consumer, name the types of large fixed retail shops.
Answer:
The types of large fixed retail shops:
(a) Departmental stores
(b) Chain stores
(e) Consumer cooperative stores
(d) Supermarket
(e) Mail order houses.