Students can access the CBSE Sample Papers for Class 12 Business Studies with Solutions and marking scheme Term 2 Set 10 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 12 Business Studies Term 2 Set 10 with Solutions
Maximum Marks : 40
Time : 2 Hours
General Instructions
- This is a subjective question paper containing 12 questions.
- This paper contains 4 questions of 2 marks each, 4 questions of 3 marks each and 4 questions of 5 marks each.
- 2 marks questions are Short Answer Type Questions and are to be answered in 30-50 words.
- 3 marks questions are Short Answer Type Questions and are to be answered in 50-80 words.
- 5 marks questions are Long Answer Type Questions and are to be answered in 80-120 words.
- This question paper contains Case/Source Based Questions.
Short Answer (SA) Type I Questions (2 Marks)
Questions 1.
“Selection is a negative process,” do you agree? Give reason to support your answer.
Answer:
Yes, selection is a negative process, as it is choosing from among the candidates, the ones who best meet a position’s requirements and eliminating the ones who are not suitable. To achieve this target, candidates are required to take a series of tests and interviews in different stages. At each stage, many candidates are eliminated and only a few candidates move to the next stage.
The process of elimination continues till the most suitable candidates are finalised. The above scenario clearly establishes the fact that selection is the process through which unsuitable candidates are rejected and suitable ones are chosen. Therefore, it is regarded as a negative process.
Question 2.
To avoid the problem of shortage and surplus of funds, what is required in financial management? Name the concept and explain any two points of its importance.
Answer:
Financial planning is required to avoid the problem of shortage and surplus.
It is important because (any two)
(i) It tries to link the present with the future.
(ii) It helps in avoiding business shocks and surprises.
(iii) It helps in coordinating various business functions.
Question 3.
RK & Co Ltd. is engaged in manufacturing machine components. The target production is 300 units daily. The company had been successfully attaining this target until two months ago. Over the last few months, it has been observed that daily production varies between 150-200 units. Identify any two possible causes for the decline in production and the steps to be taken to achieve the desired targets.
Answer:
The possible causes for the decline in production and the steps which are to be taken to achieve the desired targets are (any two)
| S.No. | Causes | Corrective Steps |
| (i) | Defective Material | Change the quality specification for the materials used. |
| (ii) | Defective Machinery | Repair the existing machine or replace the machinery, if it cannot be repaired. |
| (iii) | Defective Process | Modify the existing process. |
| (iv) | Defective Physical Condition of Work | Improve the physical conditions of work. |
Question 4.
State the procedure for an investor, who wants to buy securities on a stock exchange.
Answer:
Procedure to buy securities by an investor is as follows
- Selection of broker.
- Opening demat account with a depository.
- Place the order with the broker.
- Execution of order by the broker on instructions of the investor.
- Settlement.
Short Answer (SA) Type II Questions (3 Marks)
Question 5.
Enlist any three needs as per Maslow’s theory along with individual and organisational examples.
Answer:
The needs as per Maslow’s theory and the individual and organisational examples are (any three)
| Needs | Individual Examples | Organisational Examples |
| Self-actualisation Needs | Self-fulfillment | Achievement of goals |
| Esteem Needs | Self-respect | Status and recognition |
| Affiliation/Belongingness Needs | Friendship | Cordial relations with colleagues |
| Safety/Security Needs | Safety of property | Pension plan |
| Basic Physiological Needs | Hunger | Basic salary |
Question 6.
Sahil, the director of a textile company, is planning to manufacture bags for the utilisation of waste material from one of his textile unit. For this, he decided to setup a new manufacturing unit. He also thought of giving equal opportunities to men and women.
For this, he selected Chatterjee, Inderjeet Kaur, Aslam and Sarabjeet as heads of sales, accounts, purchase and production departments. Identify and state the next two steps that Sahil has to follow in the staffing process after selecting the above heads.
Answer:
Selection is done in the third step, in which a prospective candidate is chosen from the pool of candidates. It ensures that the organisation gets the best among the available and it enhances the morale of selected candidate. The next two steps are as follows
(i) Placement and Orientation In this step, employee occupies the position, for which he/she has been selected. After this, a brief presentation about the company is given and employee is introduced to his superiors, subordinates and colleagues.
(ii) Training and Development In this step, training is imparted to the selected P didate, by which he/she can enhance his/her skills, knowledge and through this, one can explore the opportunities.
Question 7.
What do you understand by dematerialisation of securities and demat account?
Answer:
To eliminate the problems of theft, forgery, transfer, delays and time involved in paper work, an electronic book entry system for holding and transferring securities have been introduced. This is referred to as dematerialisation of securities.
Dematerialisation is the process by which physical share certificates are converted to an equivalent number of securities in electronic form. Shares once converted into dematerialised form are held in a demat account. Demat account is an account which enables Indian citizens to trade in listed securities in electronic form.
Question 8.
A newly appointed finance manager of Vepomix Ltd. has been assigned the task of procuring funds for an upcoming project. After procurement, he has to decide upon the assets in which investment is to be made. Identify the financial decisions that he has to take.
Or
Capital markets in India have undergone through some major reforms in the past few years leading to its more efficient trading of securities. Explain any two such reforms.
Answer:
The two financial decisions he has to take are:
(i) Financing Decision It is concerned with the decisions of how much funds are to be raised from which long-term source, i.e. by means of shareholders’ funds or borrowed funds. Shareholders’ funds include share capital, reserves and surplus and retained earnings, whereas, borrowed funds include debentures, long-term loans and public deposits.
(ii) Capital Budgeting Decision It relates to how the firm’s funds are invested in different assets, so that the firm is able to earn the highest possible returns on investment. Investment decisions can be long-term or short-term.
Or
The trends that has emerged are
(i) Change in Trading and Settlement Procedure Earlier, trading on a stock exchange used to take place on the floor of stock exchange, where prices were shouted out and shares were sold to the highest bidder. However, now-a-days, trading is done electronically in the broker’s office through a computer terminal, which is connected to the main computer system of the stock exchange.
Any member can log on to the site, feed the information about the shares he wants to buy or sell and the price into the computer. Accordingly, the transaction is executed by matching the orders at the best bid and offer price.
(ii) Introduction of Depository The Depository Act was passed in 1996. It was formed for the purpose of ensuring free transferability of securities with speed, accuracy and security. Earlier, the shares and other securities were traded in form of physical certificates, which had problems like settlement delays, theft, forgery, etc.
Keeping these weaknesses associated with transfer of share in physical form, SEBI developed a new system, by which all trading in shares is done in electronic form. ‘Depository’ is an institution or organisation which holds securities (e.g. shares, debentures, bonds, mutual funds, etc.) in electronic form, in which trading is done.
Long Answer (LA) Type Questions (5 Marks)
Question 9.
Jack Ltd. announced an incentive of ₹ 15,000 to the employees who do not take leave during the coming Diwali season and show better performance.
(i) Identify and define the incentive which is granted to employees.
(ii) Also, state the type of incentive and define it.
(iii) Name two other types of incentives in the category identified in part (i).
(iv) What type of needs are satisfied by these kind of incentives?
Answer:
(i) Financial incentive is provided to employees. The incentives which are used to motivate people for improving their performance and are provided in direct monetary form or measurable in terms of money are known as financial incentives.
(ii) Productivity linked wage incentive is the type of incentive provided to employees. In this type of incentive, the amount of incentive is linked to productivity of worker or the group to which he belongs.
(iii) Types of financial incentives also include
- Bonus
- Stock option plan
(iv) Following needs are satisfied with financial incentives
- Basic physiological needs
- Safety and security needs
Question 10.
“Directing helps in efficient and effective functioning of the organisation.” In the light of this statement, explain the term directing and mention any four points of it’s importance.
Or
ABC is a leading publication company of the country. The company’s objective is to provide error-free books for the students. But the company’s production department is plagued with many shortcomings. The authors are not given accurate parameters, constant changes are made in the instructions given to the coordinators and last minute irrelevant additions are made in the text.
All these leads to wastage of resources and the company’s objective is also not achieved and the revenues are also falling. The company has recruited a new production manager, replacing the old one. The new production manager identified the need for that function of management in which actual performance is compared with planned performance. State the steps necessary to install that function in the organisation.
Answer:
Directing refers to the process of instructing, guiding, counselling, motivating and leading people in the organisation through effective communication, so that their efforts result in achievement of organisational objectives. Points that highlight the importance of directing function are (any four)
(i) Initiates Action Directing helps to initiate action by people in the organisation towards the attainment of desired objectives, e.g., If a supervisor guides his subordinates and clarifies their doubts in performing a task, it will help workers to achieve work targets given to them.
(ii) Integrates Employees’ Efforts Directing integrates employees’ efforts in the organisation in such a way that every individual effort contributes to the attainment of organisational objectives. Thus, it ensures that Are individuals work for organisational goals.
(iii) Improves Efficiency Directing guides employees to fully realise their potential and capabilities by motivating and providing effective leadership. A good leader can always identify the potential of his employees and motivate them to extract work upto their potential.
(iv) Brings Balance and Stability in the Organisation Effective directing helps to bring stability and balance in the organisation since, it fosters cooperation and commitment among the people and helps to achieve balance among various group activities and the departments.
(v) Facilitates Changes Changes in an organisation are usually resisted by employees. Through effective direction, a manager can explain the purpose and benefit of such changes to the employees.
Or
Function of management discussed in case is controlling. It is a systematic process involving a series of steps which are as follows
(i) Setting Performance Standards: The first step in the controlling process is to set up the performance standards. Standards are those criteria, on which the actual performances are measured. These standards serve as a benchmark towards which an organisation strives to work.
(ii) Measurement of Actual Performance: After the establishment of standards, the next step is measuring the actual performance with the set standards. This can be done with the help of several methods like personal observation, sample checking, performance reports, etc.
(iii) Comparison of Actual Performance with Standards: In this step, the actual performances are compared with the established standards. Such comparisons reveal the deviation between planned and actual results.
(iv) Identifying and Analysing Deviations: At this stage, acceptable and non-acceptable deviations are analysed while focusing on
- Critical Point Control It means keeping focus on key result areas where deviations are not acceptable and it should be attended on priority basis.
- Management by Exception It means if a manager tries to control everything, he may end up in controlling nothing. Thus, he should first handle the significant deviations on priority.
(v) Taking Corrective Action: The most important step in the controlling process is taking corrective actions. After the deviations and their causes are analysed, the task is to remove the hurdles from the actual work plan. The purpose of this step is to bring the actual performance up to the level of expectations by adopting corrective measures.
Question 11.
Daksh Ltd. requires an investment of ₹ 60,00,000 to earn Earning Before Interest and Tax (EBIT) of ₹ 8,00,000. In order to raise ₹ 60,00,000, there are two proposals.
Proposal A
⇒ 6,00,000 equity shares of ₹ 10 each
⇒ Rate of tax = 20%
Proposal B
⇒ 4,00,000 equity shares of ₹ 10 each
⇒ 10% ₹ 20,00,000 debentures
⇒ Rate of tax = 20%
Which proposal, if accepted, would ensure better earnings for the shareholders?
Decide on the basis of Earning Per Share (EPS).
Or
Explain the protective and developmental functions of SEBI.
Answer:
Earning per share will be more, if proposal B is accepted.
Or Protective functions of SEBI are
- Prohibition of fraudulent and unfair trade practices.
- Controlling insider trading and imposing penalties for such practices.
- Undertaking steps for investor protection.
- Promotion of fair practices and code of conduct in securities market.
Development functions of SEBI are
- Training of intermediaries of securities market.
- Conducting research and publishing information useful to all market participants.
- Undertaking measures to develop the capital markets by adopting a flexible approach.
Question 12.
Ayesha purchased 1 litre carton milk from 24 x 7 convenience store. After drinking the milk, she felt irritation, rashes and tiny bumps all over her body. Her sister, Sarah saw the carton milk and realized that product has already expired. Sarah rushed to the store to inquire about the same. Salesman informed her to contact to the customer care center for the reason that they supplied them milk on daily basis. Sarah connected with their customer care cell who refused to take her complaint. Now, Sarah wants to file complaint in district commission and wants to seek compensation for the treatment of her sister.
(i) Identify the responsibility neglected by Ayesha.
(ii) Identify the right(s) violated by the company.
(iii) Can Sarah file complaint in District Commission on behalf of her sister? Also, state who can file a complaint?
Answer:
(i) The responsibility neglected by Ayesha is that she didn’t check the expiry date of the product.
(ii) Following rights are violated by the company
- Right to safety by supplying expired milk instead of safe product.
- Right to be heard is also not followed by the company as they refused to entertain her complaint.
(iii) No, Sarah cannot file complaint on behalf of her sister, Ayesha.
As per Consumer Protection Act, 2019, following can file a complaint
- Any consumer.
- Any registered consumer association.
- Central or state government.
- A legal heir or representative of a deceased consumer.