Achiever Home-Tuitions
(Two Hours)
Answers to this Paper must be written on the paper provided separately.
You will not be allowed to write during the first 15 minutes.
This time is to be spent in reading the Question Paper.
The time given at the head of this Paper is the time allowed for writing the answers.
Attempt all questions from Section A and any four questions from Section B.
The intended marks for questions or parts of questions are given in brackets [ ].
SECTION A (40 Marks)
(Attempt all questions from this Section)
Question 1.
Distinguish between :
(a) Variable Cost and Semi-Variable Cost.
(b) Savings Account and Current Account.
(c) A Private Warehouse and a Public Warehouse.
(d) A Production Budget and a Sales Budget.
(e) A Brand and a Grade.
Answer 1.
Variable Cost
(i) These are the costs which vary
directly in proportion to changes in the
volume of output.
(ii) Ex. - Cost of direct material and
direct labour etc.
Savings Account
(i) This account is opened by general
public mostly.
(ii) The rate of interest is low.
Semi- Variable Cost
The costs which do not vary
proportionately but do not remain
constant with changes in the volume of
Ex. - Telephone costs, basic rental
charges etc.
Current Account
Current account is opened by businessmen.
No interest is paid by banks on current
Private Warehouse
(i) These warehouses are owned by
manufacturers and traders.
(ii) Private warehouses are generally
Public Warehouse
These warehouses may be owned by
government, public trusts and other
public authorities.
Public warehouses are located in places
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located in rural and sub-urban areas.
linked to roads, railways and water
Production Budget
(i) Production budget contains an
estimate of the total volume of
(ii) The works manager is responsible
for the preparation and execution of the
production budget.
A Brand
A brand is a name, term, symbol or
design used to identify the goods or
Sales Budget
Sales budget is a forecast of sales to be
achieved during a specified period in
The sales manager is directly
responsible for this budget.
A Grand
A grade is a' division of products into
class made up of units possessing
similar characteristics of size and
Question 2.
(a) Give any two methods used for On-the-Job training.
(b) Explain 'Indirect Cost'.
(c) Why is gratuity given by an employer to an employee ?
(d) What is a Trademark ?
(e) Give two examples of efficient and eco-friendly technology.
Answer 2.
(a) Two methods used for on-the-job training are :
(i) Job Rotation : This method involves the movement or transfer of the
trainee from one job to another, basically of similar nature, either in the
same department or different departments. The trainee gets job
knowledge and gains experience in different assignments.
(ii) Apprenticeship Training : In this method, the trainee learn by working
with those who are already skilled in their jobs. People who want to
enter skilled traders (such as welder, plumber) are required to undergo
apprenticeship training.
(b) Indirect cost refers to the expenses incurred on those items which are not
directly chargeable to production. Salaries of timekeeper, storekeeper,
foremen are examples of indirect costs.
(c) Gratuity is an extra-gratia or voluntary payment made by an employer to his
employees who retired after long and dedicated services. It is given to protect
the superannuated employee against the risk of old age.
(d) A trade mark is a legal term and refers to the brand which is registered under
the Trade and Merchantile Marks Act, 1958.
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(e) Two examples of efficient and eco-friendly technology are :
(i) Bio-technology : It means using living organisms or their products for
commercial purposes.
(ii) Nano-technology : It is the development and use of devices that have a
size of only a few meters.
Question 3.
(a) State two expectations of Competitors or Associates from a business
(b) Give any two suggestions to draw the attention of viewers to an
advertisement of a product/service marketed by your company.
(c) Briefly explain the concept 'Marketing Research'.
(d) What is meant by 'the Clearing House Function' of the Reserve Bank of
India ?
(e) Explain the term Brand Equity.
Answer 3.
(a) Two expectations of competitors from a business concern are :
(i) Fair trade practices regarding price, quality and service.
(ii) An atmosphere of healthy competition and ethical behaviour.
(b) Two suggestions to draw the attention of viewers to an advertisement
(i) By using picture and drawings of the products being advertised.
(ii) By using catchy but short headlines. The headlines may be slogan or
reference to the quality of the product.
(c) Marketing research is "the systematic gathering, recording and analysis of
data about marketing problems to facilitate decision-making." Marketing
research provides information which is very helpful in taking right decisions,
about the various elements of marketing mix, i.e., product, price, place and
(d) The Central Bank provides clearing house facility to the commercial banks.
It settles the claims of commercial banks through a process of book entries.
The daily balances between the commercial banks can easily be adjusted by
means of debit and credit entries in their respective accounts with the
Central Bank.
(e) Brand equity means the marketing effect of a brand. It refers to the
outcomes from the marketing of a particular product or service because of
its brand name.
Question 4.
(a) Distinguish between a Debit Card and a Credit Card.
(b) State any two rights of a Consumer.
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(c) Write a short note on the Chipko Movement.
(d) What do you understand by Audio-Visual Communication ?
(e) State two advantages of Road Transport over Air Transport.
Answer 4.
Debit Card
(i) In case of debit card, card holder
must have money in his/her bank
(ii) With debit card the card holder
uses his own money.
Credit Card
In case of credit card the balance in
account is not necessary.
With credit card the account holder is
provided credit by the bank for a
maximum period of 52 days.
(b) Two rights of a consumer are :
(i) The right to choose : The consumer should be assured access to a
variety of goods at competitive prices. This means the seller should not
use aggressive selling techniques to sell the product to the consumer.
There should be freedom to choose from alternative products.
(ii) The right to safety : These are various risks involved in the consumption
and use of products such as food drugs, toys, electrical appliances etc.
The consumers have the right to get protected against such risks.
(c) Chipko Movement was led by a group of villagers in the Uttarakhand region
in 1970. They opposed commercial logging. The movement is known for its
tactic of hugging trees to prevent them from being cut down by the
contractors. This movement draw worldwide attention. It inspired
environmentalists both nationally and globally.
(d) Audio-Visual communication combines both sound (aural) and sight (visual)
means. The communication which are seen and heard both. Example television.
(e) Two advantages of Road Transport over Air-Transport are :
(i) Economy : For short distances and small loads, road transport is quicker
and economical compared to air-transport.
(ii) Door to door services : Road transport provides complete service by
loading the goods at the consignor's door and unloading them at the
consignee's place. Goods can be loaded wherever they are and can be
taken directly to their destination while in air transport it is not possible.
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Attempt any four questions from this Section
Question 5.
(a) Differentiate between Shareholders and Creditors as Stake holders of a
commercial organisation.
(b) Distinguish between oral communication and written communication.
Answer 5.
(i) Shareholders are the owners of
the company.
(ii) Shareholders earn profit.
(iii) They have the voting right.
(iv) They are internal stake-holders.
(v) They invest in the capital of the
(vi) They assume greater risk of loss
of capital.
Creditors are the lenders to the
Creditors take interest from the
Creditors don't have any voting right.
They are external stake-holders.
They only give loan to the company.
They assume lesser risk of loss of
Oral Communication
1. It is a transmission of a message
through written words.
2. Permanent record for future
3. In appropriate for urgent messages.
Written Communication
It is a transmission of a message
through spoken words.
No record for future reference.
Appropriate during emergent
4. Takes more time.
Takes less time.
5. More economical for distant places. Not economical for distant places.
Question 6.
(a) How can environmental values and ethics be protected ? Give reasons to
support your answer.
(b) Explain the different sources of Internal Recruitment.
Answer 6.
(a) Environmental values make people environmentally conscious. Teaching
environmental values encourages people to carry cloth bags. Use organic
manure, keep surroundings clean, refuse use of polybags etc.
The following steps can be taken :
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Develop suitable literature in the form of comics, slogans, charts and
other child friendly materials.
(ii) Compile short stories having strong value components.
(iii) Develop literature on human values for teachers.
(iv) Develop audio and video programmes both for teachers and students.
(v) Design special literature for parents.
(vi) Develop syllabi of all subjects to inculcate right values.
(vii) Create awareness among all so that everyone has a sacred duty to
protect the environment.
(b) Under internal sources of recruitment, the vacant job positions are filled by
including the existing employees of the organisation.
The different sources of Internal Recruitment are :
(i) Promotions : Vacancies at higher levels may be filled up by promoting
persons working at lower levels. It involves shifting an employee to a
higher post carrying a higher status and increased salary.
(ii) Transfer : Transfer means shifting an employee from one factory,
branch or office to fill vacancy in another factory, branch or office of
the company. It involves shifting an employee to a similar job without
change in status and salary.
(iii) Employee Referrals : Present employees of the company provide
information about the candidates who are willing to be considered for
the present vacancies.
(iv) Former Employees : These include retired employees who are willing to
work on a part-time basis, individuals who left work and are willing to
come back for higher compensations. Even retrenched employees are
taken up once again.
(v) Internal Notification : Management issues an internal notification for the
existing employees to apply for the vacancy in the company.
Question 7.
(a) Explain the Experimentation method of Marketing Research.
(b) 'Budgets are very useful in Management'. Justify.
Answer 7.
(a) Under the experimentation method of Marketing Research, a control market
is established in which all forces except those being tested are kept under
check. Reactions are recorded under controlled conditions to test a theory.
Experimental method provides lessons which can be used to make large scale
marketing activity more effective and profitable. This method is realistic as it
simulates the actual market situation. Mathematical models can be used for
measuring the data in quantitative terms. However, this method involves a
large expenditure of time and many. It requires skilled investigators.
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Moreover, it is difficult to select test markets and to control the variables.
(b) Budgets are very useful in management. They offer the following
(i) Sound planning : Budgets make planning purposeful and precise.
Objectives and programme are expressed in physical or monetary units
in budgets. Budgets are prepared on the basis of forecasts therefore
budgets force managers to think about the future.
(ii) Higher efficiency : Budgets bring efficiency and economy to the
working of a business firm. They help management in obtaining the
most profitable combination of different factors of production.
(iii) Sense of responsibility : Budgets help to establish divisional and
departmental responsibility. They prevent "buckpassing" and create a
sense of responsibility among managers.
(iv) Source of motivation : Budgets represent the 'milestones' to be reached.
They tell people what is expected. Budget become the goals to be
(v) Co-ordination : Budgets force executives to think as a group. Budgets
are prepared in consultation with one another. Therefore, they help in
achieving coordination between different departments of the enterprise.
(vi) Delegation of authority : Budgets allow delegation of authority without
loss of control. It permits participation of employees at all levels.
Question 8.
(a) Distinguish between the Principle of Indemnity and the Principle of
Insurable Interest.
(b) Explain the role of Commercial Banks in the Economic Development of a
Answer 8.
(a) Indemnity means promise to compensate in case of loss. The object of every
insurance contract is to place the insured as nearly as possible in the same
financial position after the loss as he was before the loss. The insured is
entitled to recover from the insurer only the amount of loss actually suffered.
The maximum amount of compensation will be upto the sum insured or the
value of the policy. While principle of Insurable Interest says that in the
absense of insurable interest, a contract of insurance becomes a wagering
contract which is null and void and unenforceable at law. Insurable interest
means that the insured must be in such a position that he will suffer a primary
loss by the happening of the event insured against. A person is said to have
an insurable interest in the subject matter insured, if he is benefitted by its
existence and suffers a loss by its destruction.
(b) Banking is the lifeline of an economy and business activities cannot operate
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smoothly without banking services. According to Stephenson, "Banks are the
distributors and protectors of the liquid capital which is the life blood of any
(i) Safety of money : Money deposited in a bank remains safe. Precious
articles too can be kept in the safe custody of banks in locker.
(ii) Increase in credit: Customers with bank accounts enjoy better credit
worthiness in the business world. Banks also provide credit to their
(iii) Savings : Banks encourage the habit of saving and thrift among people.
They mobilise public savings and invest them in productive avenues.
They increase the rate of capital formation in the country.
(iv) Transfer of money : Banks provide convenient and safe means of
sending money from one place to another. Moreover, payment through
cheques provide a legal proof to the transaction.
(v) Collection of money : Banks collect and realise the bills, interest etc. on
behalf of their customers.
Question 9.
(a) Briefly explain any five factors a businessperson would consider while
selecting an appropriate media to advertise his/her product.
(b) What do you understand by 'Group Insurance' ? State any three features of
Group Insurance.
Answer 9.
(a) The success of an advertising campaign depends to a great extent upon the
media. Therefore, due care should be taken in selecting the media of
advertising. While choosing the appropriate advertising media, following
factors should be kept in view :
(i) Nature of the product : The product to be advertised is the main
determinant of the advertising medium. Consumer products such as
toothpaste, cold drinks, soap etc. are meant for the masses and therefore
should be advertised through newspapers, radio, films and outdoor
displays which have a general and wide appeal. On the other hand,
industrial goods like raw material, machinery, etc. can be advertised
better in specialised trade professional journals, etc.
(ii) Nature and size of the market : The geographical location or region, size
of population and its purchasing power have an important bearing on
advertising media. Advertising in local markets can be done profitably
through local newspapers, film and outdoor displays. Magazines and
direct mail are more appropriate media for advertising in national and
international markets.
(iii) Objectives of advertising : When a new product has to be introduced, a
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combination of various media may be used. Prize contests and
exhibition may be used profitably to build up goodwill and increase
(iv) Type of audience : Illiterate and poor people can better be approached
through radio, films and television. Newspapers, magazines, outdoor
displays and direct mail may be used to convey the message to educated
and well to do customers.
(v) Circulation of media : Newspapers and other media having wide
circulation are useful where the message is to be conveyed to a very
large number of people. Magazines, direct mail and other media having
limited or selected circulation carry the message to a limited number of
(b) Group insurance is a scheme which provides insurance cover on the lives of
several persons under one insurance policy or contract. It is generally
provided to the employees working under one employer.
Features of group insurance are as follows :
(i) Insurance is provided to all employees without any evidence of
(ii) It provides risk coverage to the employees as long as they remain in the
service of the employer.
(iii) The premium is generally paid jointly by the employee and the
Question 10.
From the following Trial Balance ofShri Rai Bahadur, prepare Trading, Profit &
Loss Account for the year ending 31st March, 2012 and Balance Sheet as on that
Trial Balance
Debit Balances
Credit Balances
4,240 Capital
Purchase less returns
15,610 Sales less Returns
Rates & Taxes
388 Sundry Creditors
Lighting & Heating
Electric Power
Bad Debts
Postage, Telegrams, etc.
Opening Stock
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Wages s
Land & Building
Plant & Machinery
Furniture & Fittings
Sundry Debtors
Cash at Bank
The Closing Stock on 31st March was valued at ` 8,760.
Answer 10.
Trading Account
For the year ending 31st March, 2012
To opening stock
6,160 By sales less returns
To purchases less returns
15,610 By closing stock
To lighting and heating
To electric power
To carriage
To wages
To gross profit transferred to
profit & loss a/c
Profit & Loss A/c
for the year ended 31st March, 2012
To rates & taxes
388 By gross profit transferred
from trading a/c
To salaries
To commission
To insurance
To advertising
To bad debts
To postage, telegrams
To net profit transferred to
balance sheet
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Balance Sheet
as on 31st March, 2012
Sundry creditors
4,422 Cash at bank
Sundry debtors
Less : Drawings
Furnitures & fittings
Plant & machinery
Add: N.P.
35,940 Closing stock
Land & building
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