Important Questions

Maharashtra State Board HSC 12th Commerce Book Keeping & Accountancy Important Questions and Answers

• Chapter 1 Introduction to Partnership and Partnership Final Accounts Important Questions
• Chapter 2 Accounts of ‘Not for Profit’ Concerns Important Questions
• Chapter 3 Reconstitution of Partnership (Admission of Partner) Important Questions
• Chapter 4 Reconstitution of Partnership (Retirement of Partner) Important Questions
• Chapter 5 Reconstitution of Partnership (Death of Partner) Important Questions
• Chapter 6 Dissolution of Partnership Firm Important Questions
• Chapter 7 Bills of Exchange Important Questions
• Chapter 8 Company Accounts – Issue of Shares Important Questions
• Chapter 9 Analysis of Financial Statements Important Questions
• Chapter 10 Computer in Accounting Important Questions

Maharashtra Board 12th HSC Important Questions

Balbharti Maharashtra State Board 12th Commerce Book Keeping & Accountancy Important Questions Chapter 1 Introduction to Partnership and Partnership Final Accounts Important Questions and Answers.

Maharashtra State Board 12th Commerce BK Important Questions Chapter 1 Introduction to Partnership and Partnership Final Accounts

I. Objective Questions:

A. Select the most appropriate alternatives from the following & rewrite the sentences:

Question 1.
When dates of drawings are not given, interest on drawings is charged for _____________ months.
(a) three
(b) six
(c) nine
(d) twelve
Answer:
(b) six

Question 2.
A debit balance of the partner’s current account will appear on the _____________ side of the Balance Sheet.
(a) assets
(b) liabilities
(c) debit
(d) credit
Answer:
(a) assets

Question 3.
The interest on partner’s capital is credited to _____________ Account.
(a) Trading
(b) Profit and Loss
(c) Capital
(d) Cash
Answer:
(c) Capital

Question 4.
Under fixed capital method, salary or commission to partner is credited to _____________ Account.
(a) Partner’s Capital
(b) Partner’s Current
(c) Partner’s Drawings
(d) Partner’s Salary
Answer:
(b) Partner’s Current

Question 5.
If fixed capital method is adopted, net divisible profit is transferred to _____________ Account.
(a) Partner’s Current
(b) Partner’s Capital
(c) Profit and Loss
(d) Trading
Answer:
(a) Partner’s Current

Question 6.
A statement showing financial position of a business is called a _____________
(a) Balance Sheet
(b) Trial Balance
(c) Capital A/c
(d) Trading A/c
Answer:
(a) Balance Sheet

Question 7.
Wages paid for Installation of machinery should be debited to _____________ Account.
(a) Machinery
(b) Wages
(c) Trading
(d) Profit and Loss
Answer:
(a) Machinery

Question 8.
All indirect expenses are debited to _____________ Account.
(a) Trading
(b) Capital
(c) Profit and Loss
(d) Current
Answer:
(c) Profit and Loss

Question 9.
Return outwards are deducted from _____________
(a) Purchase
(b) Sales
(c) Capital
(d) Debtors
Answer:
(a) Purchase

Question 10.
Debit balance of Trading Account indicates _____________
(a) Gross Profit
(b) Gross Loss
(c) Net Profit
(d) Net Loss
Answer:
(b) Gross Loss

Question 11.
Credit balance of Profit and Loss Account indicates _____________
(a) Gross Profit
(b) Gross Loss
(c) Net Profit
(d) Net Loss
Answer:
(c) Net Profit

Question 12.
Income received in advance is shown on _____________ side of the Balance Sheet.
(a) Debit
(b) Credit
(c) Assets
(d) Liabilities
Answer:
(d) Liabilities

Question 13.
Amount irrecoverable from debtors is known as _____________
(a) discount
(b) bad debts
(c) allowance
(d) none of these
Answer:
(b) bad debts

Question 14.
Trading Account is prepared on the basis of _____________ expenses.
(a) indirect
(b) direct
(c) revenue
(d) capital
Answer:
(b) direct

Question 15.
Royalty paid on production is shown in the _____________
(a) Balance Sheet
(b) Trading A/c
(c) Profit and Loss A/c
(d) Partner’s Current Account
Answer:
(b) Trading A/c

Question 16.
Prepaid expenses are shown on the _____________ side of the Balance Sheet.
(a) Assets
(b) Liabilities
(c) Debit
(d) Credit
Answer:
(a) Assets

Question 17.
Advertisement expenditure to be written off yet will appear on the _____________ side of Balance Sheet.
(a) Debit
(b) Liabilities
(c) Assets
(d) Credit
Answer:
(c) Assets

Question 18.
_____________ is the list of all ledger balances.
(a) Balance Sheet
(b) Trial Balance
(c) Trading A/c
(d) Profit and Loss A/c
Answer:
(b) Trial balance

Question 19.
Final accounts are prepared on the basis of _____________ and adjustments.
(a) Trial balance
(b) Trading A/c
(c) Profit and Loss A/c
(d) Capital A/c
Answer:
(a) Trial balance

Question 20.
The personal medical bill of a partner paid from the business is known as _____________ of the partner.
(a) capital
(b) profit
(c) cash
(d) drawings
Answer:
(d) drawings

B. Write the word/phrase/term, which can substitute each of the following sentences.

Question 1.
The capital method in which the partner’s Current Account is opened.
Answer:
Fixed Capital Method

Question 2.
The capital method in which the partner’s Current Account is not opened.
Answer:
Fluctuating Capital Method

Question 3.
Method of Capital Account in which capital balances of partners change every year.
Answer:
Fluctuating Capital Method

Question 4.
Expenses that are due but not paid at the end of the year.
Answer:
Outstanding/Unpaid expenses

Question 5.
A provision that is created on sundry debtors for likely bad debts.
Answer:
Reserve for Doubtful Debts

Question 6.
Income is received before it is due.
Answer:
Income received in advance

Question 7.
The stock is valued at cost price or market price whichever is less.
Answer:
Closing stock

Question 8.
Reduction in the value of fixed assets due to its continuous use.
Answer:
Depreciation

Question 9.
The transport expenses incurred to carry the goods purchased by the firm.
Answer:
Carriage Inward

Question 10.
Income due but not received.
Answer:
Accrued income

Question 11.
Account prepared on the basis of direct expenses and incomes.
Answer:
Trading Account

Question 12.
Account prepared on the basis of indirect expenses and incomes.
Answer:
Profit and Loss Account

Question 13.
The transport expenses are paid to Railway, the Airways company, or the Shipping company.
Answer:
Freight

C. State whether the following statements are True or False with reasons:

Question 1.
The partnership agreement must be in written form.
Answer:
This statement is Raise.
A partnership agreement can be in oral or written form. It is advisable to have a partnership agreement in written form, to avoid future conflicts and disputes among the partners. However, it is not compulsory.

Question 2.
There is no limit to a maximum number of partners in a firm.
Answer:
This statement is Raise.
Minimum two persons are required to form the partnership firm. As per the provisions made under the Companies Act 2013 (amended in 2014) the maximum number of partners in a firm is restricted to 50.

Question 3.
Partners are entitled to get a salary or commission.
Answer:
This statement is False.
In Partnership Deed when it is clearly mentioned that all partners or specific partners are entitled to salary or commission then only partners are entitled to get salary or commission. When partnership deed remains silent on salary or commission, then partners are not able to get any salary or commission.

Question 4.
Closing stock is always valued at market price.
Answer:
This statement is False.
As per the conservatism concept, the closing stock is always valued at cost price or market price whichever is less. If the market price of closing stock is greater than its cost then closing stock is recorded at cost.

Question 5.
The trial balance is the basis of the Final Account.
Answer:
This statement is True.
Based on the Trial balance and other adjustments, one can prepare Final Accounts. So, the Trial balance is the basis of Final Accounts.

Question 6.
Return inward is deducted from purchases.
Answer:
This statement is False.
Return inward means Sales return and it is to be deducted from sales, not from purchase. Return outward is deducted from purchases.

Question 7.
Discount allowed to Debtors is called as Bad debts.
Answer:
This statement is False.
Discount allowed to Debtors is an expense for the business while Bad debts mean irrecoverable amount from debtors and is a loss to the business. Thus, both have different meanings so, we cannot say that discount allowed to debtors is called as Bad debt.

D. Complete the Sentences.

Question 1.
Documentation charges paid for purchasing a building is debited to _____________ Account.
Answer:
Building

Question 2.
Credit balance of Trading Account indicates _____________
Answer:
Gross Profit

Question 3.
Receivable income is shown on _____________ side of the Balance Sheet.
Answer:
Assets

Question 4.
Trademark, Copyright, Patents are the examples of _____________ asset.
Answer:
intangible

Question 5.
Balance Sheet is a _____________ but it is not an _____________
Answer:
Statement, Account

Question 6.
Profit and Loss Account is a _____________ Account.
Answer:
Nominal

Question 7.
The income which is due but not yet received is called _____________ income.
Answer:
accrued/receivable

Question 8.
The statement showing list of all ledger balances is known as _____________
Answer:
Trial balance

Question 9.
Debit balance of Profit and Loss Account means _____________
Answer:
Net Loss

Question 10.
Interest on capital is an _____________ for the partner.
Answer:
income

Question 11.
Income accured but not received is _____________ for firm.
Answer:
an asset

Question 12.
Sale of scrap is recorded on _____________ side of _____________ Account.
Answer:
Credit, Profit and Loss

Question 13.
General reserve is recorded in _____________ side of _____________
Answer:
Liability, Balance Sheet

Question 14.
Provision for doubtful debts recorded in _____________ side of _____________ when it is given in the Trial balance only.
Answer:
Liability, Balance Sheet

Question 15.
Provident fund amount is a _____________ for the firm.
Answer:
Liability

E. Answer in one sentence only:

Question 1.
Define: ‘Partnership’ as per the Indian Partnership Act 1932.
Answer:
As per the Indian Partnership Act 1932, “partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”.

Question 2.
State the two-fold capacities of each partner who works in a business.
Answer:
Each partner works in two-fold capacities viz. Principal and Agent in a business.

Question 3.
As per Income Tax Act 1961, write the dates for Financial or Accounting Year.
Answer:
As per Income Tax Act, 1961, the Financial or Accounting year starts from 1st April of the current year to 31st March of next year. [e.g. 01/04/2019 to 31/03/2020].

Question 4.
How many effects for the hidden adjustment given in the Trial balance are to be passed?
Answer:
Two effects for every hidden adjustment, given in the Trial balance are to be passed, though no special instruction is given in the problem.

F. Do you agree/disagree with the following statements.

Question 1.
A profit and Loss Account is a Real Account.
Answer:
Disagree

Question 2.
Carriage outward means carriage on sales.
Answer:
Agree

Question 3.
Adjustments are recorded in Partners Current Account in Fluctuating Capital method.
Answer:
Disagree

Question 4.
Outstanding incomes are treated as an asset.
Answer:
Agree

Question 5.
The balance Sheet is an account.
Answer:
Disagree

Question 6.
R.D.C. is created on creditors.
Answer:
Agree

Question 7.
Depreciation is calculated on fixed assets.
Answer:
Agree

Question 8.
Copyright is a visible asset.
Answer:
Disagree

Question 9.
Interest on drawings is an income for the firm.
Answer:
Agree

Question 10.
Interest on a Partner’s Loan to the firm is always to be allowed.
Answer:
Agree

Question 11.
All indirect expenses are debited to Trading Account.
Answer:
Disagree

Question 12.
Capital Account always shows a credit balance.
Answer:
Disagree

Question 13.
Trading Account is prepared to know the profit or loss of the firm.
Answer:
Disagree

Question 14.
Final Accounts are prepared on the basis of Trial Balance and adjustments given.
Answer:
Agree

Question 15.
Royalty paid on production is shown in the Trading Account.
Answer:
Agree

Solved Problems

Question 1.
From the following Trial Balance and Adjustments prepare Trading and Profit and Loss Account and Balance Sheet as on 31st March 2019 for Mr. A and B.
Trial Balance as of 31st March, 2019

Adjustments:
1. Closing stock: Cost price ₹ 60,000, Market price ₹ 52,500.
2. Interest on fixed deposit ₹ 1800 is still outstanding.
3. Provide R.D.D. at 2.5 % on sundry debtors.
4. Depreciate furniture by 5 %.
5. Goods of ₹ 12,000 were destroyed by fire and the insurance company accepted the claim of ₹ 9,000 only.
Solution:
In the books of Mr. A and Mr. B


Balance Sheet as of 31st March 2019

Working Notes:
1. Closing stock is to be considered at a cost price or market price whichever is less. It is valued at ₹ 52,500.

2. Goods of ₹ 12,000 were destroyed and the insurance company accepted a claim of ₹ 9,000, which means ₹ 3,000 is a loss for the firm. The insurance company accepted the claim, (not yet paid the amount) therefore, it is recorded on the Asset side of the Balance Sheet.

3. Advertisement expense ₹ 45,000 is given for 3 years means for one year, we have to take 45000/3 = ₹ 15,000 as advt. exp. and ₹ 30,000 (45,000 – 15,000) is to be taken as prepaid advt. exp. (Asset side)

Question 2.
From the following Trial Balance of Parth and Zalak and given Adjustments, prepare Final Accounts for the year ending on 31st March 2019.
Trial Balance as of 31st March 2019

Adjustments:
1. Closing stock is valued at ₹ 99,000.
2. Write off ₹ 3,000 as further bad debts and maintain 5% R.D.D. on debtors.
3. Depreciate Plant and Machinery by 10%, Motor car by 15%, Patents by 20%.
4. Furniture costing ₹ 12,000 sold for ₹ 7,500 was wrongly included in sales and the remaining furniture is valued at ₹ 33,000.
5. Outstanding expenses are Wages ₹ 8,100, Salaries ₹ 6,750. The insurance premium is paid for the year ended 31st December 2019.
6. Goods worth ₹ 67,500 were destroyed by fire and the insurance company accepted the claim for only ₹ 57,000.
7. Sale of goods of ₹ 15,000 was wrongly considered as the sale of machinery.
Solution:
In the books of Parth and Zalak


Balance Sheet as of 31st March 2019

Working Notes:
1. Interest on loan @18 % is calculated for 3 months, (i.e. 1/1/2019 to 31/3/2019)
I = \(\frac{\text { PRN }}{100}\)
= 30,000 × \(\frac{18}{100} \times \frac{3}{12}\)
= ₹ 1,350

2. Net loss by fire = 67,500 – 57,000 = ₹ 10,500

3. Depreciation on furniture = Book value – Value given in adj.
= 45,000 – 33,000
= ₹ 12,000

4. Rent is paid for 10 months i.e. 2 months rent is outstanding.

5. Insurance premium is paid upto 31st Dec., 2019. i.e. 9 months insurance premium is prepaid.
= 5,400 × \(\frac{9}{12}\)
= ₹ 4,050

6. Loss on sale of furniture = Cost of furniture sold – Sale proceeds of furniture
= 12,000 – 7,500
= ₹ 4,500

Question 3.
From the following trial balance and adjustments of Rushabh and Yesha, you are required to prepare final accounts as of 31st March 2019. The profit and Loss sharing ratio of partners is their capital ratio.
Trial Balance as of 31st March 2019

Adjustments:
1. Closing stock is ₹ 1,10,000. Its market value is 20% more than its value.
2. Calculate interest on capital @ 6% p.a.
3. Interest on drawings to be charged from partners: Rushabh ₹ 900, Yesha ₹ 600
4. Provision for doubtful debts is to be kept at 5%.
5. Outstanding expenses at the end of the year: Rent ₹ 300, Salary ₹ 950.
6. Provide depreciation at 10% on machinery and at 5% on furniture.
7. Write off ₹ 4,000 from leasehold building.
Solution:
In the books of Rushabh and Yesha

Balance Sheet as of 31st March 2019

Working Notes:
1. Consider closing stock value ₹ 1,10,000 as its market value is 20% more.

2. Interest in drawings: Record it on the Cr. side of P & L A/c subtract it from the capital. (As shown)

3. Interest on an 8 % loan is calculated for 5 months (i.e. 1/11/18 to 31/3/19)
I = \(\frac{\mathrm{PRN}}{100}\)
= 30,000 × \(\frac{8}{100} \times \frac{5}{12}\)
= ₹ 1,000

4. In the Trial Balance, the following balances have credit balance:
Bills payable, Bank Overdraft, Provision for doubtful debts, 8 % Loan, etc.

5. O/s wages – Cr. bal. – write it on the Liability side of the Balance Sheet.

6. Prepaid insurance – Dr. bal. write it on the Asset side of the Balance Sheet.

Balbharti Maharashtra State Board 11th OCM Important Questions Chapter 8 Introduction to Management Important Questions and Answers.

Maharashtra State Board 11th Commerce OCM Important Questions Chapter 8 Introduction to Management

Select the correct option and rewrite the sentences

Question 1.
Management is a …………………. process.
(a) stable
(b) continuous
(c) one time
Answer:
(b) continuous

Question 2.
Formulating the plan is the main function of …………………. level management.
(a) top
(b) middle
(c) lower
Answer:
(a) top

Question 3.
Important, decisions in the business are made by ………………….
(a) management
(b) administration
(c) organisation.
Answer:
(b) administration

Question 4.
Management is a profession because it has ………………….
(a) specialised knowledge
(b) training facilities
(c) code of conduct.
Answer:
(a) specialised knowledge

Question 5.
According to views expressed by different management authorities, management and administration are ………………….
(a) synonymous
(b) different
(c) synonymous and different.
Answer:
(c) synonymous and different.

Question 6.
Management is an …………………. to co-ordinate groun efforts attaining the cherished goals of the business.
(a) activity
(b) process
(c) objective.
Answer:
(a) activity

Question 7.
…………………. is the basic and motivating factor of management.
(a) Human element
(b) Capital
(c) Direction.
Answer:
(a) Human element

Question 8.
Top management does …………………. and …………………. function.
(a) supervisory
(b) operative
(c) determination and administration.
Answer:
(c) determination and administration.

Question 9.
Management is a …………………. activity.
(a) group
(b) individual
(c) social.
Answer:
(a) group

Question 10.
Management is a …………………. science.
(a) social
(b) physical
(c) natural.
Answer:
(a) social

Question 11.
There are …………………. levels of management in a organisation.
(a) two
(b) four
(c) three.
Answer:
(c) three.

Question 12.
Management means to ………………….
(a) order
(b) co-ordinate
(c) help.
Answer:
(b) co-ordinate

Question 13.
Management motivates the emplovees to ………………….
(a) work hard
(b) take initiative
(c) earn more.
Answer:
(a) work hard

Question 14.
Management ensures the optimum use of ………………..
(a) blackmoney
(b) resources
(c) international market.
Answer:
(b) resources

Match the pairs

Question 1.

Part A	Part B
(a) Management	(1) Administration function
(b) Policy Making	(2) Human knowledge
(c) Thinking Function	(3) Top level management
(d) Doing Function	(4) Lower level management
(e) Top level management	(5) Middle level management
	(6) Management function
	(7) Knowledge of Administration
	(8) Board of Directors

Answer:

Part A	Part B
(a) Management	(2) Human knowledge
(b) Policy Making	(3) Top level management
(c) Thinking Function	(1) Administration function
(d) Doing Function	(6) Management function
(e) Top level management	(8) Board of Directors

Question 2.

Part A	Part B
(a) Management	(1) Regular practice
(b) Management as an Art	(2) Can be seen
(c) Top Level Management	(3) Administration
(d) Management as a Profession	(4) Universal in nature
(e) Lower Level Management	(5) Code of conduct
	(6) Evaluate performance
	(7) Foreman
	(8) Selective
	(9) Directing subordinates to complete task
	(10) Cause effect relationship

Answer:

Part A	Part B
(a) Management	(4) Universal in nature
(b) Management as an Art	(1) Regular practice
(c) Top Level Management	(6) Evaluate performance
(d) Management as a Profession	(5) Code of conduct
(e) Lower Level Management	(7) Foreman

Question 3.

Part A	Part B
(a) Systematic Body of knowledge	(1) Top level management
(b) Lower level management	(2) Management as an art.
(c) Management as universal process	(3) Board of Directors.
(d) Management as profession	(4) Practice oriented
(e) Direction and control.	(5) Service motive
	(6) Technical skills
	(7) Applicable to all organization.
	(8) Management as a science.
	(9) Applicable to business organization

Answer:

Part A	Part B
(a) Systematic Body of knowledge	(8) Management as a science.
(b) Lower level management	(6) Technical skills
(c) Management as universal process	(7) Applicable to all organization.
(d) Management as profession	(5) Service motive
(e) Direction and control.	(1) Top level management

Give one word / phrase / term

Question 1.
The activity which aims at achieving a definite goal.
Answer:
Management

Question 2.
Level of management requiring analytical or conceptual skill.
Answer:
Top level management

Question 3.
Another name for lower level management.
Answer:
Supervisory or Operational level

Question 4.
Level of management requiring human skills.
Answer:
Middle level management

Question 5.
Level of management which performs administrative functions.
Answer:
Top level management

Question 6.
Level of management that takes policy decision.
Answer:
Top level management

Question 7.
The highest level of management in the hierarchy.
Answer:
Top level management

Question 8.
The level which executes the policy.
Answer:
Middle level management

Question 9.
The level of management which requires few people.
Answer:
Top level management

Question 10.
The level of management which requires large number of persons.
Answer:
Lower level management

Question 11.
Levels of management which consists of supervisors and foremen.
Answer:
Lower level management

Question 12.
Level of management which consists of departmental managers.
Answer:
Middle level management

Question 13.
Level of management which consists of chairman and board of directors.
Answer:
Top level management

Question 14.
State the level of management in which Class-I executives are involved.
Answer:
Top level management

Question 15.
The art of directing and inspiring people.
Answer:
Management

Question 16.
The application of skill and knowledge to bring the desired result.
Answer:
Management as an art

Question 17.
Level of management that evaluates the performance of various departments.
Answer:
Top level management.

State True or False

Question 1.
There are no separate levels of management in an organization.
Answer:
False

Question 2.
Management aims at achieving goals for its organization.
Answer:
True

Question 3.
Management is an universal process.
Answer:
True

Question 4.
Management aims at achieving goals for its organization.
Answer:
True

Question 5.
Management is a profession.
Answer:
True

Question 6.
Management is a continuous process.
Answer:
True

Question 7.
Management aims at achieving business objectives.
Answer:
True

Question 8.
Objective of management is to obtain minimum output and maximum input.
Answer:
False

Question 9.
Management has to maintain good relations with all.
Answer:
True

Question 10.
Management is a perfect art.
Answer:
False

Question 11.
Management is neither a pure science nor a fine art.
Answer:
True

Question 12.
Profession do not have any ethics or code of conduct.
Answer:
False

Question 13.
Board of Directors are the part of lower management.
Answer:
False

Question 14.
The top level management is administrative in nature.
Answer:
True

Question 15.
The managers receive orders and instructions from lower level of management.
Answer:
False

Question 16.
Middle level management interprets and communicates the policies to top level management.
Answer:
False

Question 17.
Management is an art, a science and a profession.
Answer:
True

Question 18.
We cannot make any changes in the field of management.
Answer:
False

Question 19.
The professional manager does not need special knowledge and skill.
Answer:
False

Question 20.
Management is required to conduct business as well as non-business activity.
Answer:
True

Question 21.
Management helps in using the resources properly.
Answer:
True

Question 22.
Management is required even for a very small business.
Answer:
True

Question 23.
Management is an art only.
Answer:
False

Question 24.
Management cannot be considered as a business.
Answer:
True

Question 25.
Top level management performs the function of planning.
Answer:
True

Question 26.
Lower level management is engaged in the policy making.
Answer:
False

Question 27.
Levels of management are done according to the size of the organization.
Answer:
True

Find the odd one

Question 1.
Characteristics of Management Goal-oriented, Group Activity, Tangible, Continuous process.
Answer:
Tangible.

Complete the sentences

Question 1.
Administration is the involvement of ………………. management.
Answer:
Top

Question 2.
………………. deals with setting, seeking and reaching objectives.
Answer:
Management

Question 3.
Management has ………………. objectives.
Answer:
pre-determined

Question 4.
Supervisor level of management is directly linked to the ………………. functions of the firm.
Answer:
Routine

Question 5.
Lower level management is also known as ………………. management.
Answer:
Supervisory

Question 6.
………………. is an art of getting things done through others.
Answer:
Management

Question 7.
Generally there are ………………. levels of management in the organisation.
Answer:
Three

Question 8.
Management is ………………. oriented.
Answer:
Goal

Question 9.
Management is a ………………. science.
Answer:
Social

Question 10.
At the ………………. level of management, personnel are few.
Answer:
Top

Question 11.
Management means to ……………….
Answer:
Co-ordinate

Question 12.
Management has to satisfy unlimited want through limited ……………….
Answer:
Means

Question 13.
Management is an ………………. of getting work done through others.
Answer:
Art

Question 14.
Management is co-ordination of ………………. and physical resources.
Answer:
Human

Question 15.
A professional charges ………………. for his services.
Answer:
Fees

Question 16.
Management is done to achieve ……………….
Answer:
Goal/objective

Question 17.
Management is getting things done through ……………….
Answer:
Others

Question 18.
The word management is derived from Italian word ……………….
Answer:
Maneggiare

Question 19.
Implementation of policies is the function of ………………. level management.
Answer:
Lower

Question 20.
Every profession has a ………………. of conduct.
Answer:
Code

Question 21.
Management is derived from ………………. words.
Answer:
Two Latin.

Select the correct option

Question 1.
(Levels of Management, Lower Level Management, Management, Code of conduct, Board of Directors).

Part A	Part B
(1) Continuous Process	—————
(2) —————	Top Level Management
(3) Top, Middle, Lower	—————
(4) Profession	—————
(5) ————-	Lower Level Management

Answer:

Part A	Part B
(1) Continuous Process	Management
(2) Board of Directors	Top Level Management
(3) Top, Middle, Lower	Levels of Management
(4) Profession	Code of conduct
(5) Supervisory Level	Lower Level Management

Answer in one sentence

Question 1.
What is Italian word for ‘manage’.
Answer:
Italian word for ‘manage’ is ‘maneggiare’ meaning to handle.

Question 2.
Name the executive related to top level management.
Answer:
Executives related to top level management are – Board of Directors, President, Chief Executive Officer, Directors, etc.

Question 3.
Name the executives related to middle level management.
Answer:
Executives related to middle level management are Finance manger, Production manager, Sales manager, etc.

Correct the underlined word and rewrite the following sentences

Question 1.
Management is tangible in nature.
Answer:
Management is intangible in nature.

Question 2.
Management is one time process.
Answer:
Management is continuous process.

Question 3.
Administration is an art of getting things done through others.
Answer:
Management is an art of getting things done through others.

Question 4.
Management is static in character.
Answer:
Management is dynamic in character.

Question 5.
Top Level Management decides short term objectives of the organization.
Answer:
Top Level Management decides long term objectives of the organization.

Question 6.
Finance Manager is an example of lower level management.
Answer:
Superintendent is an example of lower level management.

Question 7.
Drawing, Cycling is a science.
Answer:
Drawing, Cycling is an art.

Study the following case/situation and express your opinion

1. Shankar Patil is an advocate and he is running his profession in a very good manner. His younger brother Prashant Patil has done very beautiful and artistic decoration of his brother’s office with seating arrangement and symbol of Justice as his hobby. Vishwas Patil, older brother of Shankar Patil is a science graduate and doing farming in best way. He exports the farm production.

On the basis of above information:
Question 1.
Identify the source of income of Shankar Patil.
Answer:
Shankar Patil is a lawyer by profession. He is practicing as a Lawyer / an advocate. He render his services to his clients and against that charges fee from them. So, ‘fee’ is the income source of Shankar Patil.

Question 2.
What is the qualification of Prashant Patil as a decorator?
Answer:
Prashant Patil may be or may not be a professional interior decorator. His hobby is decorating the office / houses. He may be an artist and an art does not require any formal education.

Question 3.
Mention two features of profession.
Answer:
Following are the features of profession:
1. Formal Education : Profession needs formal education. Today managers are qualified with management diploma or degrees. They take formal training from management schools which help them to work with perfection.

2. Restricted Entry : The entry in any profession is restricted. It needs a formal education. For example- Lawyer, Doctor, Interior designs, Architect, Chartered Accountant, etc. Such compulsion is not there for becoming a manager.

Justify the following statements

Question 1.
Management is an universal process.
Answer:

1. Management is applicable to all organization whether religious, social or cultural, educational or governmental or non-governmental.
2. All kind of organization have accepted management, as it is required everywhere.
3. Every activity which has to be performed by a group of persons requires effective planning, organizing, co-ordinating, and controlling.
4. Thus, management is an universal process.

Question 2.
There are levels of management in an organization.
Answer:

1. There are three levels of management in an organization.
2. The top level which consists of chairman, board of directors, etc takes care of formulating the board policies of the organization.
3. The middle level does the work of implementing and executing the orders to the lower level.
4. The lower level management does the actual and execution and operating activities.
5. All the three levels are important and they are dependent on each other.
6. Thus, all three levels are required for effective operation of the organization.

Question 3.
Management is a profession.
Answer:

1. It is a specialized body of knowledge and managers are required to have professional skill and training
   to be efficient.
2. It has certain ethical standards.
3. Its motive is service oriented.
4. It requires training which is formal.
5. Thus, Management is considered as a profession.

Question 4.
Management is neither a pure science nor a fine art.
Answer:

1. Management is said to be both an art and a science, as science teaches one to know and art teaches what to do.
2. Management is a science as it is a body of knowledge and generalisation that represents the truth and facts, but it is not a pure science like Physics, Chemistry and Biology.
3. Management is an art of applying the knowledge, but not pure fine arts like painting, dancing, etc.
4. Thus, Management is neither a pure science nor a fine art.

Question 5.
Profession has ethics or code of conduct.
Answer:

1. Profession is well-defined as an occupation which requires specialized skills and ethical standards.
2. Professional managers have to follow code of conduct and ethical standards laid down by the All India Management in India.
3. If they do not follow the code of conduct they can be derecognised and disqualified from the profession.
4. Thus, Profession has ethics and code of conduct.

Question 6.
Management is an art, a science and a profession.
Answer:

1. Management is an art because every manager has to apply his skills, intelligence, creativity for the efficient execution of management activities.
2. It is considered a science because it adopts the cause and effect relationship.
3. It has a scientific approach but deals in human behaviour, therefore called social science.
4. Management is also considered a profession because it is a specialized body of knowledge and managers are required to have professional skills and training to be efficient.
5. Thus, Management is an art, a science, and a profession.

Attempt the following

Question 1.
State the functions of lower-level management.
Answer:
The functions of lower-level management are as follows:

1. Planning day to day working.
2. Acting as a link between the middle level of management and workers.
3. Carrying out the instructions given by the middle-level management.
4. Delegating duties to workers, inspecting and supervising their work.
5. Attending to the problems of workers and making arrangements for their training and development.
6. To maintain discipline and good human relations among the workers.
7. Image building of the enterprise before workers and creating a sense of belongingness.
8. Ensuring the safety of workers, machines, tools, etc.
9. Making arrangements of materials and tools and preventing the misuse and wastage of such material.
10. Providing feedback information about the worker’s problems to the higher authorities.

Balbharti Maharashtra State Board 11th OCM Important Questions Chapter 7 Business Environment Important Questions and Answers.

Maharashtra State Board 11th Commerce OCM Important Questions Chapter 7 Business Environment

Select the correct option and rewrite the sentence

Question 1.
……………….. indicates the importance of the business environment.
(a) Identifying opportunities and threats
(b) Identifying firm’s strength and weakness
(c) both (a) and (b)
Answer:
(c) both (a) and (b)

Question 2.
……………….. is an example of the social environment.
(a) Gross Domestic Product
(b) Consumer Protection, Act
(c) Customs and beliefs
Answer:
(c) Customs and beliefs

Question 3.
Liberalisation means ………………..
(a) reduced government controls and restrictions
(b) integration of economies
(c) policy of planned disinvestment
Answer:
(a) reduced government controls and restrictions

Question 4.
……………….. explains the impact of Government policy changes on business and industry.
(a) More demanding customers
(b) License system
(c) More industries for public sector
Answer:
(a) More demanding customers

Question 5.
……………….. environment consist of the methods and techniques adopted for production.
(a) Legal
(b) Political
(c) Technological
Answer:
(c) Technological

Question 6.
The policies decided by shareholders, managers, labour unions and the employees are known as ………………..
(a) Internal environment factors
(b) External environment factors
(c) International factors
Answer:
(a) Internal environment factors

Question 7.
……………….. is very powerful because powers such as policy making, law making, budget approving, etc. are in its hands.
(a) Government
(b) Judiciary
(c) Legislature
Answer:
(c) Legislature

Question 8.
……………….. economy is known as free market economy.
(a) Socialist
(b) Capitalist
(c) Mixed
Answer:
(b) Capitalist

Question 9.
……………….. does not involve an equal division of existing wealth among the people.
(a) Capitalist Economy
(b) Socialist Economy
(c) Mixed Economy
Answer:
(b) Socialist Economy

Question 10.
Globalisation includes ………………..
(a) Minimising high import tariffs
(b) Introduction of selective competition in the reserved area
(c) Reduction in physical restrictions on import and import duties.
Answer:
(a) Minimising high import tariffs

Question 11.
Changes in the fiscal policy of the Government is an aspect of ……………….. environment.
(a) Political
(b) Social
(c) Economic
Answer:
(c) Economic

Question 12.
Changes in the judicial system is an aspect of ……………….. environment.
(a) Economic
(b) Social
(c) Legal
Answer:
(c) Legal

Question 13.
Privatisation implies reduction in the role of ……………….. sector.
(a) Public
(b) Private
(c) Joint
Answer:
(a) Public

Question 14.
Level of literacy is an aspect of ……………….. environment.
(a) Economic
(b) Social
(c) Political
Answer:
(b) Social

Question 15.
Changes in the ruling government is an aspect of ……………….. environment.
(a) Economic
(b) Social
(c) Political
Answer:
(c) Political

Match the pairs

Question 1.

Part A	Part B
(a) Globalisation	(1) Reduced role of Public sector
(b) Privatisation	(2) Digital India
(c) Liberalisation	(3) Competition Act, 2002
(d) Technological Environment	(4) Mining of coal
(e) Natural Environment	(5) Integration of world economies
	(6) Increased role of public sector
	(7) Exercising controls
	(8) Occupation of people
	(9) Differentiation of economies
	(10) Removing unnecessary controls

Answer:

Part A	Part B
(a) Globalisation	(5) Integration of world economies
(b) Privatisation	(1) Reduced role of Public sector
(c) Liberalisation	(10) Removing unnecessary controls
(d) Technological Environment	(2) Digital India
(e) Natural Environment	(4) Mining of coal

Question 2.

Part A	Part B
(a) Internal Environment	(1) Stability and peace in the country
(b) Social Environment	(2) Value System
(c) Political Environment	(3) Monetary Policy
(d) Economic Environment	(4) Indian Contract Act, 1872 (2017)
(e) Legal Environment	(5) Customs and Traditions
	(6) Digital India

Answer:

Part A	Part B
(a) Internal Environment	(2) Value System
(b) Social Environment	(5) Customs and Traditions
(c) Political Environment	(1) Stability and peace in the country
(d) Economic Environment	(3) Monetary Policy
(e) Legal Environment	(4) Indian Contract Act, 1872 (2017)

Question 3.

Part A	Part B
(a) Privatisation	(1) Management
(b) Internal Environment	(2) National economy
(c) Liberalisation	(3) Values and demographic trends
(d) Political Environment	(4) Disinvestment
(e) Globalisation	(5) Delicensing
(f) Legal Environment	(6) World Economy
(g) Social Environment	(7) National Income Distribution
(h) Economic Environment	(8) Judicial System

Answer:

Part A	Part B
(a) Privatisation	(4) Disinvestment
(b) Internal Environment	(1) Management
(c) Liberalisation	(5) Delicensing
(d) Political Environment	(2) National economy
(e) Globalisation	(6) World Economy
(f) Legal Environment	(8) Judicial System
(g) Social Environment	(3) Values and demographic trends
(h) Economic Environment	(7) National Income Distribution

Write a word or a term or a phrase which can substitute each of the following statements

Question 1.
Controllable factor of the business environment
Answer:
Internal environment

Question 2.
The environment of business that includes economic condition, policies and system, basic philosophy, national income, money supply, trade cycle economic development.
Answer:
Economic environment

Question 3.
The environment of business that includes stability and peace in the country, specific attitudes of selected representative.
Answer:
Political environment

Question 4.
The environment of business which consist of factors such as climate, minerals, soil, landforms, rivers and oceans etc.
Answer:
Natural environment

Question 5.
The environment of business which consist of the methods and techniques adopted for production.
Answer:
Technological environment

Question 6.
The environment of business which regulates and controls within the legal framework of a country.
Answer:
Legal environment

Question 7.
The process of eliminating unnecessary controls and restrictions for smooth functioning of business.
Answer:
liberalization

Question 8.
The process of integration of national economy with world through cross country information, ideas, technologies, goods, services and people.
Answer:
Globalization

Question 9.
The process of reducing the involvement of state or public sectors by involving of private sector in economic activities.
Answer:
Privatization.

State whether the following statements are True or False

Question 1.
Internal factors of business environment are uncontrollable factors.
Answer:
False

Question 2.
Business and Environment are independent.
Answer:
False

Question 3.
Social Environment is not important for business.
Answer:
False

Question 11.
Business Environment consists of internal as well as external factors.
Answer:
True

Question 4.
All business from are affected by the government and its policies.
Answer:
True

Question 5.
Liberalization of Indian economy resulted into easy entry of foreign business in India.
Answer:
True

Question 6.
Privatisation is an effective tool for restriction and reforming the public sector.
Answer:
True

Find the odd word out

Question 1.
Legislature, Government Shareholders.
Answer:
Shareholders

Question 2.
Social, Employees, Legal.
Answer:
Employees

Question 3.
Judiciary, Social values, Traditions.
Answer:
Judiciary

Question 4.
Value system, Human Resources, Marketing Resources.
Answer:
Marketing Resources

Question 5.
Liberalization, Socialization, Globalization.
Answer:
Socialization,

Question 6.
Technological, Weather, Climate.
Answer:
Technological

Question 7.
Social aspects, Economical aspect, Traditions.
Answer:
Economical aspect

Question 8.
Capitalist Economy, Mixed Economy, Indian Economy.
Answer:
Indian Economy

Question 9.
Indian Contract Act 1872, Indian Partnership Act 1932, Industrial Dispute Act 1947.
Answer:
Indian Partnership Act, 1932

Question 10.
Natural Environment, Economic Environment, Political Environment.
Answer:
Natural Environment.

Complete the sentence

Question 1.
The business environment constitute threats to the firm and offers ………………… for potential market.
Answer:
opportunities

Question 2.
Every society develops its own ………………… which means how the members of that society between and interact with each other.
Answer:
culture

Question 3.
Indian political system comprises of three vital institution like …………………, ………………… and Judiciary.
Answer:
Legislature, Government

Question 4.
………………… changes are fast and to keep pace with it, business should be ever alert.
Answer:
Technological

Question 5.
All nation would be interdependent in the ………………… economy.
Answer:
Global.

Select the correct option

Question 1.
Which analysis will enable managers to deal with business challenges?
(Environmental / Data / Political)
Answer:
Environmental

Question 2.
Which factor of Business Environment are regarded as uncontrollable?
(Internal / External)
Answer:
External

Question 3.
Trade and commerce between two nations are dependent on which factors?
(Social / Geographic / Technological)
Answer:
Geographic

Question 4.
Which is the most powerful institution in the Indian Political system?
(Legislature / Government / Judiciary)
Answer:
Legislature

Question 5.
In which economic system factors of productions are organized .managed and oriented by government?
(Capitalist / Socialist / Mixed)
Answer:
Socialist

Question 6.
Which economic system is followed in India?
(Capitalist / Socialist / Mixed)
Answer:
Mixed

Question 7.
Which of the following has created on economically interdependent international environment?
(Liberalisation / Privatisation / Globalisation)
Answer:
Globalisation

Correct the underline word and rewrite the following sentence

Question 1.
Internal factors of Business Environment are uncontrollable.
Answer:
External factors of Business Environment are uncontrollable.

Question 2.
External factor of business are controllable.
Answer:
Internal factor of business are controllable.

Question 3.
Vision, mission and objectives of business are related to External factors.
Answer:
Vision, mission and objectives of business are related to Internal factors.

Question 4.
Social trends and social values are part of economic environment.
Answer:
Social trends and social values are part of social environment.

Question 5.
Factors like climate, minerals, soil, river, etc. are elements of political environment.
Answer:
Factors like climate, minerals, soil, river, etc. are elements of natural environment.

Question 6.
Socialist Economy is also known as free market economy.
Answer:
Capitalist Economy is also known as free market economy.

Question 7.
GST is part of political environment.
Answer:
GST is part of legal environment.

Question 8.
Privatisation has resulted into easy of foreign business in India.
Answer:
Liberalisation has resulted into easy of foreign business in India.

Question 9.
Globalisation is an effective tool for restricting and reforming the public sector.
Answer:
Privatisation is an effective tool for restricting and reforming the public sector.

Question 10.
Liberalisation means integration of natural economy with world economic.
Answer:
Globalisation means integration of natural economy with world economic.

Study the following case/situation and express your opinion.

1. Just after declaration of Lok Sabha 2014 result, the Bombay Stock Exchange Sensex rose by 1000 points in a day.

Question 1.
Identify the environmental factor which led to this rise giving reason.
Answer:
Rise in stock market index (sensex) is economic environment. But it has done due to political environment (Lok Sabha Election Results)

Question 2.
Explain any two other dimensions of the environment.
Answer:
Two other dimensions of the environment are (a) Legal environment and (b) Technological environment

2. Government of India is seriously thinking to allow oil marketing under public sector, by fixing their own price for petroleum products.

Question 1.
Name the economic reform related to this decision.
Answer:
Privatization is the economic reform related to this decision.

Question 2.
Name other two reforms recommended in new economic policy.
Answer:
The other two reforms recommended in new Economic policy are Liberalization and Globalization.

3. Today it is common to see computerized information Kiosks and Internet / Word Wide Web multimedia pages highlighting the virtues of products.

Question 1.
Name the dimension of business environment highlighted in this statement.
Answer:
Technological environment

4. An advertisement of baby product giving information to the potential buyers that “Mother Milk is the best”.

Question 1.
Name the component of business environment.
Answer:
Legal Environment.

5. Zero Defect Zero Effect(ZED) is a slogan coined by the PM of India, with reference to the Make in India initiative launched by the government. The Zed model aims to make India the manufacturer of the world and present the products in the global market.

Before the. initiative was launched, the limits of Foreign Direct Investment(FDI) in various sector had been released. The application for licenses was made available Online and various other norms and production were also considered by the government.

Question 1.
From the above, identify the major components of New Economic Policy of 1991.
Answer:
Liberalization and Globalization.

Question 2.
In the light of the above discussion explain the component of NEP 1991.
Answer:

1. Liberalization : It refers to the process of eliminating unnecessary controls and restrictions for smooth functioning of business.
2. Privatization : It refers to reduce the involvement of state or public sectors by involving of private sector in economic activities.
3. Globalization : It refers to integration of national economy and societies through cross country flows of information, ideas, technologies, goods, services, capital, finance and people.

6. It is interesting to know that the menu items of multinational food chains are customized to suit the general palates of the local people in the region. When it started business in India in the year 1996, the company went through a complete location strategy. Me Donald’s changed its product menu to accommodate the vegetable burger given the large population. It priced the products by close to 15%. Also, the Mc-Aloo Tikki burger ‘is not available anywhere but in the Indian outlets of Me Donalds.

Question 1.
Identify the relevant feature of business environment discussed in the case above.
Answer:
Relativity is the feature of business environment discusses in the case above.

Question 2.
State the other features of business environment.
Answer:

1. The features of business environment are:
2. Determining opportunities and threats
3. Identifying firm’s strength and weakness
4. Continuous learning
5. Image Building
6. Meeting Competition
7. Giving Direction for growth

7. Ultra paint company which is manufacturing paints has been enjoying a prominent market position as it manufactured best quality paints, made timely payment of taxes to government. It assembled various inputs like finance, machines, raw material, etc. from its environment. But since last year it has been dumping its untreated possessions waste on the river bank which has created many health problems for the people. As a result, the court passed an order to seal the manufacturing unit of the company.

Question 1.
State the importance of business environment highlighted in the above case.
Answer:
Business environment helps in tapping useful resources.

Question 2.
Identify any two dimension of business environment mentioned in the above case and comment.
Answer:

1. Social environment : “It has been dumping untreated possession of waste on river bank problems” for people. This shows that it is at the cost of human life as their life is affected.
2. Legal Environment : “The court passed on order to seal the company”. It shows that through court interference the company was sealed.

Question 3.
State any two values which have been overlooked by the company.
Answer:
Company overlooked Environment protection, concern for human life, respect for law and order and social responsibility.

Balbharti Maharashtra State Board 11th OCM Important Questions Chapter 6 Institutes Supporting Business Important Questions and Answers.

Maharashtra State Board 11th Commerce OCM Important Questions Chapter 6 Institutes Supporting Business

Select the correct option and rewrite the sentence

Question 1.
SIDBI has its head office at …………………
(a) Bihar
(b) Mumbai
(c) Lucknow
Answer:
(c) Lucknow

Question 2.
Dr. Muhammad Yunus from ………………… is known as ‘Father of Microfinance.
(a) Afghanistan
(b) Bangladesh
(c) India
Answer:
(b) Bangladesh

Question 3.
The World Bank Group has set ………………… goals to be achieved by 2030.
(a) 4
(b) 3
(c) 2
Answer:
(c) 2

Question 4.
………………… is the lifeblood of a business.
(a) Finance
(b) Raw materials
(c) Labour
Answer:
(a) Finance

Question 5.
KVIC has its head office at …………………
(a) Mumbai
(b) Kolkata
(c) Delhi
Answer:
(a) Mumbai

Question 6.
………………… portal was launched by SIDBI.
(a) Maza-Mitra
(b) Aamcha Mitra
(c) Udyami Mitra
Answer:
(c) Udyami Mitra

Question 7.
………………… work as knowledge partner for State and Central Government.
(a) Udyami Mirta
(b) Start-up Mitra
(c) Wake-up Mitra
Answer:
(b) Start-up Mitra

Question 8.
………………… provides credit for rural development.
(a) SIDBI
(b) NABARD
(c) RRBs.
Answer:
(b) NABARD

Match the pairs

Question 1.

Part A	Part B
(i) NABARD	(a) Heart of business
(ii) Finance	(b) Advisor and mentor to MSMEs
(iii) SIDBI	(c) Life blood of business
(iv) MUDRA	(d) March 17, 2016
(v) Startup Mitra	(e) Recommendations to RBI
	(f) Funding the unfunded enterprises
	(g) March 17, 2014
	(h) Recommendation to Commercial Banks

Answer:

Part A	Part B
(i) NABARD	(e) Recommendations to RBI
(ii) Finance	(c) Life blood of business
(iii) SIDBI	(b) Advisor and mentor to MSMEs
(iv) MUDRA	(f) Funding the unfunded enterprises
(v) Startup Mitra	(d) March 17, 2016

Question 2.

Part A	Part B
(i) SIDBI	(a) Maza Mitra
(ii) Green, Blue and White Revolution	(b) RRB’s
(iii) Khadi	(c) Symbol of dependence
(iv) Women’s Self Help Group	(d) NABARD
(v) World Bank	(e) Washington D.C.
	(f) Udyami Mitra
	(g) Symbol of self reliance
	(h) Great Britain
	(i) Mahila Bachat Gat

Answer:

Part A	Part B
(i) SIDBI	(f) Udyami Mitra
(ii) Green, Blue and White Revolution	(d) NABARD
(iii) Khadi	(g) Symbol of self reliance
(iv) Women’s Self Help Group	(i) Mahila Bachat Gat
(v) World Bank	(e) Washington D.C.

Give one word/phrase/term

Question 1.
Symbol and spirit of self reliance in pre-independence India.
Answer:
Khadi

Question 2.
Head office of KVIC.
Answer:
Mumbai

Question 3.
A statutory body formed to provide livelihood to artisans in villages of India.
Answer:
Khadi and Village Industries Commission (KVIC)

Question 4.
A document signed by KVIC with National Institute of Design (NID).
Answer:
Memorandum of Understanding (MoU)

Question 5.
Economist of Bangladesh who jointly won Nobel Peace Prize.
Answer:
Dr. Muhammad Yunus

Question 6.
A refined model of Bangladesh model to eradicate poverty and empower women.
Answer:
Indian Self Help Group Model

Question 7.
A portal to improve accessibility of credit and handholding services to MSMEs.
Answer:
Udyami Mitra.

State True or False

Question 1.
SIDBI has set a goal to end extreme poverty by 2030.
Answer:
False

Question 2.
The World Bank has set a goal to promote shared prospering by fostering the income growth.
Answer:
True

Question 3.
Success of business depends on optimum utilization of capital.
Answer:
True

Question 4.
SIDBI provide debt financing to government.
Answer:
False

Question 5.
Dr. Ashfak Yunus founded the Grameen Bank in India.
Answer:
False

Question 6.
Body of Governors is the supreme policy making body of the World Bank.
Answer:
True

Find the odd word out

Question 1.
Features of KVIC-
Rural Development; Employment Generation; Entrepreneurship Development; Mutual Trust.
Answer:
Mutual Trust

Question 2.
Institutes supporting business-
SIDBI; IDBI; NABARD; KVIC.
Answer:
IDBI

Question 3.
Features of SIDBI-
Sustainable Development; Services to MSMEs; Recommendations to RBI; Digital Initiatives.
Answer:
Recommendations to RBI

Question 4.
Terms related to SIDBI-
SIDBI startup mitra; Aamcha Mitra; Udyami Mitra; Micro Finance.
Answer:
Aamcha Mitra

Question 5.
Terms related to NABARD-
Apex Rural Bank; Recommendations to RBI; Green, Blue and White Revolution; Empowerment of women.
Answer:
Empowerment of women.

Question 6.
Woman’s Self Help Groups-
Urban Bank; Mahila Bachat Gat; Dr. Muhammad Yunus; Grameen Bank.
Answer:
Urban Bank.

Select the correct option

(Provides credit to rural development, Women Empowerment, Multilateral Investment Guarantee Agency (MIGA), KVIC, SIDBI)

Part A	Part B
(i) World Bank	————-
(ii) —————	Achievement of National Goals
(iii) NABARD	——————-
(iv) Self Help Group (SHG)	—————–
(v) —————	Promote Khadi and Village Industries

Answer:

Part A	Part B
(i) World Bank	Multilateral Investment Guarantee Agency (MIF)
(ii) SIDBI	Achievement of National Goals
(iii) NABARD	Provided credit to rural development
(iv) Self Help Group (SHG)	Women Empowerment
(v) KVIC	Promote Khadi and Village Industries

Answer in one sentence

Question 1.
Why do firm need finance ?
Answer:
Firms need finance to start business, to run business effectively and to expand business.

Question 2.
Name the institutes supporting business.
Answer:
The institutes supporting business are – SIDBI, NABARD, KVIC, Women’s Self Help Group and World Bank.

Question 3.
Where is the head office of SIDBI?
Answer:
The head office of SIDBI is at Lucknow.

Question 4.
Who resolves the financial and non-financial hurdles of MSMEs ?
Answer:
SIDBI resolves the financial and non-financial hurdles of MSMEs.

Question 5.
Who are the focused domains for SIDBI?
Answer:
Micro, Small and Medium Enterprises (MSME’s ) are the focused domains for SIDBI.

Question 6.
Who helds the present ownership of SIDBI ?
Answer:
The present ownership of SIDBI is held by 34 public sector institutes, through its 15 regional offices and 84 branches.

Question 7.
Who acts as an advisor and mentor for MSMEs ?
Answer:
SDIBI act as an advisor and mentor for MSMEs.

Question 8.
Name the associates and subsidiaries of SIDBI.
Answer:
The associates and subsidiaries of SIDBI are – SVCL, CGTMSE, SMERA, ISTSL, ISARC and MUDRA.

Question 9.
What is the aim of ‘MUDRA’?
Answer:
The main aim of ‘MUDRA’ an associate of SIDBI is “funding the unfunded” micro enterprises in the country.

Question 10.
What are the different forms of finance offered by SIDBI?
Answer:
The different forms of finance offered by SIDBI are – direct finance, indirect finance and micro finance.

Question 11.
Name the two digital initiatives launched by SIDBI.
Answer:
The two digital initiatives launched by SIDBI are – SIDBI start-up Mitra and Udyami Mitra.

Question 12.
Who monitors the flow of rural credit in India?
Answer:
NABARD monitors the flow of rural credit in India.

Question 13.
What is the objective of KVIC?
Answer:
The objective of KVIC is to utilise the available raw materials and human skills to generate non-farm employment opportunities in the rural areas of India.

Question 14.
Who is the supreme policy making body of World Bank?
Answer:
Board of Governors is the supreme policy making body of World Bank.

Question 15.
What are the goals of World Bank to be achieved by, 2030?
Answer:
The two goals of World Bank to be achieved by 2030 is to end extreme poverty and promote shared prosperity.

Correct the Underlined word and rewrite the following sentences

Question 1.
SIDBI provides refinance to Banking Companies only.
Answer:
SIDBI provides refinance to Banking and Non-Banking Financial Comnanies.

Question 2.
KVIC works as an advisor and mentor to MSMEs.
Answer:
SIDBI works as an advisor and mentor to MSMEs.

Question 3.
NABARD is working toward sustainable development of MSMEs in India.
Answer:
SIDBI is working toward sustainable development of MSMEs in India.

Question 4.
Udvami Mitra works as knowledge partner for State and Central Government.
Answer:
SIDBI Startup Mitra works as knowledge partner for State and Central Government.

Question 5.
SIDBI Startup Mitra was launched to improve accessibility of credit services to MSMEs.
Answer:
Udvami Mitra was launched to improve accessibility of credit services to MSMEs.

Question 6.
The apex institution for agricultural finance is SIDBI.
Answer:
The apex institution for agricultural finance is NABARD.

Question 7.
NABARD monitors the flow of Urban Credit in India.
Answer:
NABARD monitors the flow of Rural Credit in India.

Question 8.
World Bank provides recommendation to RBI on issue of licences to Co-operative Bank.
Answer:
NABARD provides recommendation to RBI on issue of licences to Co-operative Bank.

Question 9.
KVIC has its head office at Kolkata.
Answer:
KVIC has its head office at Mumbai.

Question 10.
Khadi Gramudvog works for planning, promotion and production of Khadi.
Answer:
KVIC works for planning, promotion and production of Khadi.

Question 11.
The social objective of KVIC is producing saleable articles.
Answer:
The economic objective of KVIC is producing saleable articles.

Question 12.
The wider objectives of KVIC is creating dependence amongst the poor.
Answer:
The wider objectives of KVIC is creating self-reliance amongst the poor.

Question 13.
KVIC signed Memorandum of Association with National Institute of design.
Answer:
KVIC signed Memorandum of Understanding with National Institute of design.

Question 14.
KVIC promote conventional energy for sustainable development.
Answer:
KVIC promote non-conventional energy for sustainable development.

Question 15.
“Helping Yourself” and ‘Unity is Strength’ is the principle of SHG.
Answer:
“Helping each other” and ‘Unity is Strength’ is the principle of SHG.

Question 16.
SHG – Bank Linkage programme was initiated by SIDBI since 1992.
Answer:
SHG – Bank Linkage programme was initiated by NABARD since 1992.

Question 17.
State Bank of India accepted SHG strategy as an alternative credit model.
Answer:
Reserve Bank of India accepted SHG strategy as an alternative credit model.

Question 18.
SHG is an involuntary association.
Answer:
SHG is a voluntary association.

Explain the following terms/concepts

Question 1.
SIDBI
Answer:

1. Small Industrial Development Bank of India (SIDBI) was established on 2nd April, 1990.
2. At present, the ownership of SIDBI is held by 34 public sector institutes.
3. Main focus of SIDBI is to resolve the financial and non-financial hurdles of MSMEs.
4. SIDBI helps for technological upgradation and modernisation of existing MSMEs.

Question 2.
SIDBI Startup Mitra
Answer:

1. It is a digital initiative set up by SIDBI.
2. It tries to bring all stakeholders, investors, new entrepreneurs, banks, mentors, etc on one platform.
3. It helps in financing and development of new entrepreneurs.
4. It also acts as a knowledge partner for State and Central Government.

Question 3.
NABARD
Answer:

1. It came into existence on 12th July, 1982 under the special Act of Parliament It is counted as an apex institution for agricultural finance.
2. The main objective of NABARD is to provide and regulate credit and other facilities for the promotion of agriculture, small scale industries, cottage and village industries, etc.
3. It provides refinancing facilities to State Co-operative Bank (SCBs), Land Development Bank (LDBs), Regional Rural Banks (RRBs) and other approved financial institutions.

Answer in brief

Question 1.
Explain the Digital initiative steps of SDBI.
Answer:
The digital initiative steps of the SDBI are as follows:
SIDBI Startup Mitra and Udyami Mitra:
(a) SIDBI Startup Mitra:
It brings together all stakeholders, start-up entrepreneurs, incubators, investors, industry bodies, mentors and advisors and banks at one platform. It helps in financing and development of new entrepreneurs. It also works as knowledge partner for State and Central Government.

(b) Udyami Mitra:
This is the portal launched by SIDBI to improve accessibility of credit and handholding services to MSME’s. Under this portal entrepreneurs can apply for loan without physically visiting any bank branches. The entrepreneurs can select and apply for preferred banks, they can select suitable branch, track their application status an avail multiple loan benefits.

Question 2.
Explain the role of NABARD in national development.
Answer:
Role of NABARD in national development:

1. NABARD is an apex bank providing credit facilities to institute working in agricultural finance.
2. It provides storage facilities for agricultural commodities by promoting development of warehousing facilities.
3. It also promote the export of agricultural commodities.
4. It plays an important role in sustainable development of the country through Green, Blue and White revolution.
5. It refinances commercial and co-operative banks during natural calamities like drought, crop failure, etc. so that farmers can recover from the difficult period.

Question 3.
How does KVIC help in marketing and promotion?
Answer:
Role of KVIC in marketing and promotion:

1. KVIC holds exhibitions, seminars and lectures in college and universities to spread the knowledge of KVIC products.
2. It also launches a marketing development plan to generate interest, awareness and attraction amongst the masses.
3. It takes all effort to improve the quality, packaging and marketing of a product.
4. Government also supports KVIC, so that its product becomes competitive.

Question 4.
Explain the formation of Womens SHGs.
Answer:
Formation of Women’s SHG’s.

1. It is an informal group of homogeneous individuals generally formed by a NGO or by team of government.
2. It is recognized by the Government, hence it does not require any registration under any Act.
3. They have their well defined rules and bye-laws to run the group.
4. Regular meetings of this groups are held and records are properly maintained.

Balbharti Maharashtra State Board 11th OCM Important Questions Chapter 5 Forms of Business Organisation – II Important Questions and Answers.

Maharashtra State Board 11th Commerce OCM Important Questions Chapter 5 Forms of Business Organisation – II

Select the correct option and rewrite the sentence

Question 1.
Multinational corporations have a network of subsidiaries in ………………
(a) several countries
(b) home countries
(c) state only
Answer:
(a) several countries

Question 2.
A multinational corporation operates in ………………..
(a) only one country
(b) developed countries
(c) all over the world
Answer:
(c) all over the world.

Question 3.
A multinational corporation is also known as ……………….
(a) global corporation
(b) regional corporation
(c) national corporation
Answer:
(a) global corporation

Question 4.
Government company is registered under …………………
(a) Special legislation
(b) Companies Act, 2013
(c) Banking Act 1949
Answer:
(b) Companies Act, 2013

Question 5.
Private sector enterprise is owned, managed and controlled by the …………………
(a) Individuals
(b) Government
(c) Board of directors
Answer:
(a) Individuals

Question 6.
Public sector enterprise is owned, managed and controlled by …………………
(a) individuals
(b) Government
(c) Board of Directors
Answer:
(b) Government

Question 7.
Private Enterprises invest their funds in …………………
(a) areas of social benefit
(b) areas where return is maximum
(c) any area
Answer:
(b) areas where return is maximum

Question 8.
Atleast ………………… of the capital of Government company is held by the Government.
(a) 51%
(b) 71%
(c) 50%
Answer:
(a) 51%

Question 9.
Public enterprises are financed by …………………
(a) Government
(b) private businessmen
(c) political leaders
Answer:
(a) Government

Question 10.
The nature and power of a statutory corporation is defined in …………………
(a) Indian Companies Act, 2013
(b) Special Statute
(c) Prospectus
Answer:
(b) Special Statute

Question 11.
……………….. is formed by a Special Act of Parliament.
(a) Private Enterprise
(b) Government Company
(c) Statutory Corporation
Answer:
(c) Statutory Corporation

Question 12.
Public enterprises are generally not runned on …………………
(a) service motive
(b) commercial lines
(c) profit motive
Answer:
(c) profit motive

Question 13.
………………… is an example of Public Corporation.
(a) Post and Telegraph
(b) LIC
(c) BHEL
Answer:
(b) LIC

Question 14.
………………… is an example of departmental undertaking.
(a) LIC
(b) Reliance
(c) Post and Telegraph
Answer:
(c) Post and Telegraph

Question 15.
………………… is the oldest form of Public Sector Organisation.
(a) MNC
(b) Government Company
(c) Departmental Undertaking
Answer:
(c) Departmental Undertaking

Question 16.
Departmental organisations are accountable to ………………… for all their actions.
(a) Government
(b) Ministry
(c) Public
Answer:
(b) Ministry

Question 17.
The technological gap between the developed and developing countries is bridged by the …………………
(a) MNC
(b) Government Company
(c) Private enterprises
Answer:
(a) MNC

Match the pairs

Question 1.

Part A	Part B
(a) Departmental Organisation	(1) Private sector
(b) Statutory Company	(2) Operates globally
(c) Multinational Corporation	(3) Profit oriented
(d) Public sector Organisation	(4) Objective based agreement
(e) Government Company	(5) Service oriented
	(6) Established by passing a special act
	(7) 51% paid up capital by Government
	(8) Sole trading
	(9) Owned by government
	(10) Temporary partnership

Answer:

Part A	Part B
(a) Departmental Organisation	(9) Owned by government
(b) Statutory Company	(6) Established by passing a special act
(c) Multinational Corporation	(2) Operates globally
(d) Public sector Organisation	(5) Service oriented
(e) Government Company	(7) 51% paid up capital by Government

Question 2.

Part A	Part B
(a) Railways	(1) Statutory Corporation
(b) Government Company	(2) Decentralisation of control
(c) Multinational Company	(3) Not answerable to the Legislature
(d) Unit Trust of India	(4) National Thermal Power Corporation (NTPC)
(e) Statutory Corporation	(5) Departmental organisation
	(6) Centralised control of their branches
	(7) Answerable to the Legislature
	(8) Bajaj Electricals Pvt. Ltd.
	(9) Owned by private individuals

Answer:

Part A	Part B
(a) Railways	(5) Departmental organisation
(b) Government Company	(4) National Thermal Power Corporation (NTPC)
(c) Multinational Company	(6) Centralised control of their branches
(d) Unit Trust of India	(1) Statutory Corporation
(e) Statutory Corporation	(7) Answerable to the Legislature

Give one word / phrase / term

Question 1.
A company which is incorporated in one country and has business units in several countries.
Answer:
Multinational Corporation

Question 2.
A company where 51% of paid up capital is held by the Central or State government.
Answer:
Government company

Question 3.
Autonomous corporate body created by Special Act of Parliament.
Answer:
Statutory Corporation.

State True or False

Question 1.
Public enterprises are owned, managed and controlled by public.
Answer:
False

Question 2.
Multinational companies have branches throughout the world.
Answer:
True

Question 3.
Public enterprises have public accountability.
Answer:
True

Question 14.
Departmental organisations have right to borrow funds from outside.
Answer:
False

Question 5.
The main aim of private sector is to render services to the public.
Answer:
False

Question 6.
Government Company is registered under special legislation.
Answer:
False

Question 7.
Statutory Corporations need not follow the Companies Act, 2013.
Answer:
True

Question 8.
Government Companies enjoy legal status.
Answer:
True

Question 9.
Government interference is more in public sector enterprises.
Answer:
True

Question 10.
Multinational Companies help the host companies.
Answer:
True

Find the odd word out

Question 1.
National Thermal Power Corporations, Bharat Heavy Electricals Limited, Hindustan Machine Tools, LIC.
Answer:
LIC

Question 2.
Bata India, RBI, Infosys, Tata Motors.
Answer:
RBI

Question 3.
Sole Trading Concern, Joint Hindu Family Firm, Statutory Corporation, Joint Stock Company.
Answer:
Statutory Corporation

Question 4.
Unit Trust of India, Shipping Corporation of India, Indian Space Research Organisation, Yes Bank.
Answer:
Yes Bank

Question 5.
Samsung, IBM, Amazon, Patanjali.
Answer:
Patanjali

Question 6.
National Tiger conservation Authority, Securities and Exchange Board of India, State Bank of India, Indian Post and Telegraphs.
Answer:
SBI

Question 7.
Flipkart, Google, HP, Canara Bank.
Answer:
Canara Bank

Question 8.
Oriental Bank, Vijaya Bank, Andhra Bank, HDFC Bank.
Answer:
HDFC Bank

Question 9.
MTNL, BSNL, Vodofone, Air India.
Answer:
Air India

Question 10.
Air India, Indian Airlines, Spicejet.
Answer:
Spicejet

Question 11.
Tata, Reliance, Airtel, BSNL.
Answer:
BSNL

Question 12.
Coca Cola India, Hindustan Unilever, IBM, SAIL.
Answer:
SAIL

Question 13.
Railways, Post and Telegraph, Defence, RBI.
Answer:
RBI.

Complete the sentences

Question 1.
The main aim of private sector enterprises is to earn …………………
Answer:
profit

Question 2.
The main aim of public sector enterprises is to render …………………
Answer:
service

Question 3.
A government company may be a private limited company or a …………………
Answer:
public limited company

Question 4.
A company formed by passing a special act in the parliament or legislature is ………………… company.
Answer:
statutory

Question 5.
MNCs have the need of ………………… capital.
Answer:
huge

Question 6.
Profit maximization is the ultimate goal of ………………… sector.
Answer:
private

Question 7.
Departmental organisations are accountable to ………………… for all their actions.
Answer:
ministry (Parliament)

Question 8.
Departmental undertakings are a source of revenue to ………………… treasury.
Answer:
Government

Question 9.
Reserve Bank of India is an example of …………………
Answer:
Statutory Corporation

Question 10.
A company which is incorporated in one country and has business units in several countries is called …………………
Answer:
Multinational-Corporation

Question 11.
Post and Telegraph is an example of …………………
Answer:
Departmental Undertaking.

Select the correct option

Question 1.
(Multinational Corporation, Private Sector Organisations, Departmental Organisations, Statutory Corporation, Government Company)

Part A	Part B
(1) 51% paid up capital held by Central Government	…………………
(2) ………………..	Autonomous Corporate Body
(3) Owned by Private individuals	…………………
(4) ………………..	Operates Globally
(5) ……………….	Controlled by Concerned Ministry

Answer:

Part A	Part B
(1) 51% paid up capital held by Central Government	Government Company
(2) Statutory Corporation	Autonomous Corporate Body
(3) Owned by Private individuals	Private Sector Organisation
(4) Multinational Corporation	Operates Globally
(5) Departmental Organisations	Controlled by Concerned Ministry

Question 2.
(Statutory Corporation, Government Company, Multinational Corporation, Departmental Organisation)

Part A	Part B
(1) BATA India	………………….
(2) ………………….	Post Office, Railways, etc.
(3) Reserve Bank of India	…………………
(4) ………………….	BHEL

Answer:

Part A	Part B
(1) BATA India	Multinational Corporation
(2) Departmental Organisation	Post Office, Railways, etc.
(3) Reserve Bank of India	Statutory Corporation
(4) Government Company	BHEL

Correct the underlined word and rewrite the following sentences

Question 1.
Multinational Corporation is relatively free from Red tapism.
Answer:
Statutory Corporation is relatively free from Red tapism.

Question 2.
Infosvs is an example of Government Company.
Answer:
HMT is an example of Government Company.

Question 3.
Private Sector aims at providing services to customers.
Answer:
Private Sector aims at profit maximisation.

Question 4.
Private sector is owned by Government.
Answer:
Private sector is owned by individuals.

Question 5.
Defence Industry is an example of Statutory Corporation.
Answer:
Reserve Bank of India is an example of Statutory Corporation.

Question 6.
Departmental Organisation is financed by shareholders.
Answer:
Departmental Organisation is financed by annual budget.

Question 7.
Departmental Organisation has separate Legal entity.
Answer:
Government Company has separate Legal entity.

Question 8.
MNC operates at national level.
Answer:
MNC operates at global level.

Justify the following statements

Question 1.
Departmental organisations do not have right to borrow funds from outside.
Ans:

1. Department organisations is financed by annual appropriation from the treasury and its revenue also goes into Treasury.
2. This enterprise cannot borrow money from the public as enterprise is financed by the government and hence the government controls its affairs. Hence, answerable for its performance to the Parliament.
3. Government consent is required to borrow from public, if need arises.
4. Thus, Departmental organisations have no right to borrow funds from outside.

Question 2.
Statutory Corporations need not follow the Companies Act, 2013.
Ans:

1. Statutory corporation is formed or created by passing a Special Act in Parliament or State legislature.
2. The Act or Special Statute which is passed in the Parliament defines it powers, objectives, aims, duties, functions, rules and regulations governing its employees and its relationship with the Government department.
3. Statutory Corporation prepare its own budgets and recruits employees on the terms and conditions determined by its Board of Directors.
4. As Statutory Corporation is regulated as per the provisions made in Special Act of Parliament or State Legislature, it need not follow the provisions and directives given as per the Indian Companies Act, 2013. They need not have a Memorandum of Association or Articles as they have to strictly follow the Special statute.
5. Thus, Statutory corporation need not follow the Companies Act.

Question 3.
Government Companies enjoy legal status.
Answer:

1. Government Company is one in which not less than 51% of the share capital is held by the Central Government or State Government or part by Centre and part by State.
2. Government Companies are registered under Indian Companies Act, 2013 and its working is as per the Act and hence has distinct legal entity apart from the government,
3. Being a company registered under 2013 Act, it has all features like common seal, limited liability, stability, etc. It can enter into contracts and acquire property in its own name.
4. Thus, Government Company enjoys legal status or management is in the hands of Board of Directors and ownership is with Government.

Question 4.
Government interference is more in public sector enterprises.
Answer:

1. Public enterprises are accountable to the public and Government as the money is financed by the annual budget.
2. Public sector is welfare oriented and not profit oriented as public sector carries out work which is essential in the larger interest of public like making roads, bridges, flyovers, etc.
3. Various Parliamentary committees are set up to scrutinise the working of public enterprises and the reports are tabled before the Parliament.
4. The PSE’s do not enjoy financial autonomy, operational or administrative autonomy.
5. Thus, more government interference in public sector enterprises.

Question 5.
Multinational Companies help the host companies.
Answer:

1. MNC’s offer growth opportunities for domestic firms. They help domestic producers to enter the global markets through their international network of production and marketing.
2. MNC’s provide ready markets for raw materials or semi-finished goods produced by the local producers in the host countries.
3. The entry of MNC’s in the domestic market tends to break the monopoly of the selected few domestic companies. Due to this consumers in the host countries are benefited.
4. MNC’s help host countries by providing new sophisticated technology.
5. Thus, due to their global presence and superior marketing skills, MNC’s are in a position to help the host companies.

Balbharti Maharashtra State Board 11th OCM Important Questions Chapter 4 Forms of Business Organisation – I Important Questions and Answers.

Maharashtra State Board 11th Commerce OCM Important Questions Chapter 4 Forms of Business Organisation – I

Select the Correct option and rewrite the sentence

Question 1.
A sole trading concern is a ………………. form of organization.
(a) private sector
(b) public sector
(c) none of these
Answer:
(a) private sector

Question 2.
A sole trading concern has ………………. liability.
(a) limited
(b) unlimited
(c) restricted
Answer:
(b) unlimited

Question 3.
Indian Partnership Act was passed in the year ………………..
(a) 1923
(b) 1956
(c) 1932
Answer:
(c) 1932

Question 4.
Minimum number of persons to start a public limited company is ……………..
(a) 2
(b) 7
(c) 10
Answer:
(b) 7

Question 5.
The minimum number of directors in a private company is ……………….
(a) 3
(b) 2
(c) 5
Answer:
(b) 2

Question 6.
Business organisation which is controlled by Hindu Succession Act is known as …………….
(a) Joint Stock Company
(b) Partnership Firm
(c) Joint Hindu Family Firm
Answer:
(c) Joint Hindu Family Firm

Question 7.
Limited managerial skill is the ……………… of Joint Hindu family business.
(a) feature
(b) limitation
(c) advantage
Answer:
(b) limitation

Question 8.
The Karta in Joint Hindu Family business has ……………… liability.
(a) unlimited
(b) limited
(c) joint
Answer:
(a) unlimited

Question 9.
The maximum number of partners for a firm carrying on banking business is ………………..
(a) Ten
(b) Twenty
(c) Seven
Answer:
(a) Ten

Question 10.
In partnership firm the liability of partners is …………….
(a) limited
(b) unlimited
(c) none of above
Answer:
(b) unlimited

Question 11.
In a partnership firm every partner is the principal as well as the ……………….
(a) agent
(b) karta
(c) partner
Answer:
(a) agent

Question 12.
In a co-operative society the principle followed is ………………
(a) one share one vote
(b) one man one vote
(c) no vote
Answer:
(b) one man one vote

Question 13.
From the point of continuity ………………… business organisation is the most suitable.
(a) company
(b) partnership
(c) sole proprietorship
Answer:
(a) company

Question 14.
A sole trading concern is ……………….. form of business organisation.
(a) latest
(b) oldest
(c) recent
Answer:
(b) oldest

Question 15.
Members of a partnership firm are individually known as ………………..
(a) partner
(b) agent
(c) co-parcener
Answer:
(a) partner

Question 16.
Joint Hindu Family business exists in …………….. only.
(a) India
(b) England
(c) all the countries
Answer:
(a) India

Question 17.
The Karta is ………………. liable for business debts.
(a) not
(b) jointly
(c) personally
Answer:
(c) personally

Question 18.
Management of a Co-operative Society is ………………….
(a) personal
(b) joint
(c) democratic
Answer:
(c) democratic

Question 19.
Rules for working of a Co-operative Society are called …………………
(a) Bye-laws
(b) Articles of Association
(c) Memorandum
Answer:
(a) Bye-laws

Question 20.
The nature …………………. of organisation is service oriented.
(a) Sole Trader
(b) Joint Stock Company
(c) Co-operative Society
Answer:
(c) Co-operative Society

Match the pairs

Question 1.

Group A	Group B
(a) Registration of a Company	(1) International Market
(b) Sole Trading Concern	(2) Minimum no. of members is 10
(c) Co-operative society	(3) Voluntary
(d) Joint Hindu Family Firm	(4) Partners
(e) Active partners	(5) Local market
	(6) Co-parceners
	(7) Compulsory
	(8) Minimum no. of member is 5
	(9) Who lends his name
	(10) Takes active part in business

Answer:

Group A	Group B
(a) Registration of a Company	(7) Compulsory
(b) Sole Trading Concern	(5) Local market
(c) Co-operative society	(2) Minimum no. of members is 10
(d) Joint Hindu Family Firm	(6) Co-parceners
(e) Active partners	(10) Takes active part in business

Question 2.

Group A	Group B
(a) Indian Companies Act	(1) 1912
(b) Indian Co-operative Society’s Act	(2) Joint Hindu Family Firm
(c) The Hindu Succession Act	(3) Sole Trading Concern
(d) Indian Partnership Act	(4) 1907
(e) No Separate Act	(5) 1923
	(6) 1947
	(7) 2013
	(8) 1956
	(9) 1932
	(10) 1958

Answer:

Group A	Group B
(a) Indian Companies Act	(7) 2013
(b) Indian Co-operative Society’s Act	(1) 1912
(c) The Hindu Succession Act	(8) 1956
(d) Indian Partnership Act	(9) 1932
(e) No Separate Act	(3) Sole Trading Concern

Give one word/phrase/term.

Question 1.
Persons who enter into partnership business.
Answer:
Partners

Question 2.
The rules and regulations laid down by the managing committee of a co-operative society.
Answer:
Bye-laws

Question 3.
The commercial organization which ensures maximum secrecy.
Answer:
Sole trading concern

Question 4.
Kind of partnership formed under the Indian Partnership Act.
Answer:
General Partnership

Question 5.
Another name for a sleeping partner.
Answer:
Dormant partner

Question 6.
Name the kind of company in which there is non-transferability of shares.
Answer:
Private Limited Company

Question 7.
The business organization which has minimum ten members.
Answer:
Co-operative organization

Question 8.
The type of commercial organization established for providing services to its members.
Answer:
Co-operative organization

Question 9.
The rules and regulations laid down by the managing committee of a co-operative organization.
Answer:
Bye-laws

Question 10.
An artificial person created by law.
Answer:
Joint Stock Company

Question 11.
The seniormost family member of Joint Hindu Family Firm.
Answer:
Karta

Question 12.
The members of the Joint Hindu Family firm.
Answer:
Co-parceners

Question 13.
A partner in partnership firm who takes active participation in day to day work.
Answer:
Active partner

Question 14.
A business organization with a single owner.
Answer:
Sole Trading Concern

Question 15.
A partnership agreement in writing.
Answer:
Partnership Deed

Question 16.
The members of the Joint Hindu Family Firm.
Answer:
Co-parceners

Question 17.
The principle of the co-operative societies.
Answer:
Each of all, all for each

Question 18.
An organization which enjoys a separate legal existence.
Answer:
Joint Stock Company

Question 19.
A symbol of a company’s incorporate existence substitutes for its signature.
Answer:
Common seal

Question 20.
A company which need not obtain Trading Certificate.
Answer:
Private Limited Company

Question 21.
A company which can start business after obtaining Certificate of Incorporation.
Answer:
Private Limited Company.

State True or False

Question 1.
The members of the Joint Hindu Family Firm are called partners.
Answer:
False

Question 2.
The principle of one member one vote is followed in a Joint Stock Company.
Answer:
False

Question 3.
A public limited company can start business after getting the Certificate of Incorporation.
Answer:
False

Question 4.
There is no limit for membership in Joint Hindu Family Business.
Answer:
True

Question 5.
The liability of a Karta in a Joint Hindu Family Firm is limited.
Answer:
False

Question 6.
The maximum number of members in Joint Hindu Family is 20.
Answer:
False

Question 7.
Company form of organization has developed before industrial revolution.
Answer:
False

Question 8.
Shareholders can manage the business.
Answer:
False

Question 9.
The ownership and management are not separate in Joint Stock Company.
Answer:
False

Question 10.
The main purpose of a co-operative organization is to earn profit.
Answer:
False

Find the odd one

Question 1.
Sole Trading Concern, Partnership Firm, Joint Stock Company, Co-operative Society.
Answer:
Co-operative Society

Question 2.
Sleeping partner, Quasi partner, Co-parcener, Sub-partner.
Answer:
Co-parcener

Question 3.
Partnership at will, Partnership for a particular period, Limited Liability Partnership, Partnership for a particular venture.
Answer:
Limited Liability Partnership

Question 4.
Nominal partner, Active partner, Dormant partner, Minor as a partner.
Answer:
Minor as a partner

Question 5.
Grocery shop, Beauty parlour, Gift shop, Reliance Ltd.
Answer:
Reliance Ltd.

Question 6.
Hindustan Petroleum, Amul India, Mahindra & Mahindra, Renault India.
Answer:
Amul India

Question 7.
Karta, Partnership Deed, Co-parceners, Hindu Law.
Answer:
Partnership Deed

Question 8.
One Share One Vote, Service motive, Common seal, Perpetual succession.
Answer:
Service motive

Question 9.
One man show, Sole trader, Co-parceners, Single ownership.
Answer:
Co-parceners

Question 10.
Joint management, Principal agent relationship, Separate legal entity, Joint ownership.
Answer:
Separate legal entity

Question 11.
Partnership at will, Partnership for particular period, Partnership for particular venture, Limited Liability Partnership.
Answer:
Limited Liability Partnership

Question 12.
Mitakshara, Shareholders, Dayabhaga, Karta.
Answer:
Shareholder

Question 13.
One Member One Vote, Open membership, Prospectus, Service motive.
Answer:
Prospectus

Complete the sentences

Question 1.
The address of registered office of a company is mentioned in the …………………
Answer:
Memorandum of Association

Question 2.
A Sole Trading concern is best suitable for ……………………
Answer:
self employment

Question 3.
A Joint Stock company enjoys continuous and ………………… life.
Answer:
stable.

Complete the following table

Question 1.
(Consumer co-operatives, Partnership for a fixed period, Sole trading concern, Karta, Secret partner.)

Group A	Group B
(i) Apana Bazar	…………………
(ii) …………………	takes utmost care of business in a Joint Hindu Family Firm
(iii) Partnership formed for 6 months	…………………
(iv) …………………	is not known to third parties in a partnership.
(v) No sharing of profits and risks is a feature of	…………………

Answer:

Group A	Group B
(i) Apana Bazar	Consumer Co-operatives
(ii) Karta	takes utmost care of business in a Joint Hindu Family Firm
(iii) Partnership formed for 6 months	Partnership for a fixed period
(iv) Secret partner	is not known to third parties in a partnership.
(v) No sharing of profits and risks is a feature of	Sole Trading Concern

Question 2.
(Sole trading concern, Joint Hindu Family Business, Minimum 2 directors, Partnership Firm, Co-operative Societies.)

Group A	Group B
(i) Private Company	…………………
(ii) …………………	Beauty parlour
(iii) Principal-Agent relationship	…………………
(iv) Tax Concession	…………………
(v)  …………………	Partition of business

Answer:

Group A	Group B
(i) Private Company	Minimum 2 directors
(ii)  Sole Trading Concern	Beauty parlour
(iii) Principal-Agent relationship	Partnership Firm
(iv) Tax Concession	Co-operative Societies
(v)  Joint Hindu Family Business	Partition of business

Question 3.
(Partnership Firm, Sole Trading Concern, Partnership firm, Co-operative Societies, Private company.)

Group A	Group B
(i) …………………	Minimum 7 members
(ii) …………………	Minimum paid up capital Rs 1,00,000
(iii) Owned and controlled by one person	…………………
(iv) Registration Compulsory in Maharashtra	…………………
(v)  …………………	Democratic Management

Answer:

Group A	Group B
(i) Public Company	Minimum 7 members
(ii) Private Company	Minimum paid up capital Rs 1,00,000
(iii) Owned and controlled by one person	Sole Trading Concern
(iv) Registration Compulsory in Maharashtra	Partnership firm
(v)  Co-operative societies	Democratic Management

Answer in one sentences

Question 1.
What is the meaning of unlimited liability?
Answer:
Unlimited liability means if a businessman becomes insolvent and if his business assets are insufficient to pay off his business liabilities, he will have to use his private property in order to pay off his business debts.

Question 2.
Who has unlimited liability in the Joint Hindu Family Firm?
Answer:
The Karta has unlimited liability in the Joint Hindu Family Firm.

Question 3.
Who are the Board of Directors of a Company?
Answer:
Elected representatives of the shareholders are called the Board of Directors.

Question 4.
What are the members of the Joint Hindu Family called?
Answer:
The members of the Joint Hindu Family are called as Co-parceners.

Question 5.
What are Co-operating farming societies?
Answer:
Co-operative farming societies are the voluntary associations of small farmers who come together to obtain the benefits of large scale farming.

Question 6.
What are marketing co-operatives?
Answer:
Marketing co-operatives are the voluntary associations of independent producers who are willing to sell their products output at a remunerative prices.

Question 7.
What are credit co-operatives?
Answer:
Credit co-operatives are the co-operative societies which are formed by the poor people to provide financial help and to develop the habit of savings among the members.

Question 8.
What is partnership deed?
Answer:
Partnership deed is an agreement in writing which includes terms and conditions of partnership firm.

Question 9.
Who is dormant partner?
Answer:
A dormant partner is a partner in a partnership firm who contribute capital, shares profit and contributes to the losses of the firm, but does not take active participation in the working of the firm.

Correct the underlined word and rewrite the following sentences.

Question 1.
The partnership business has less capital as compared to Sole Trading concern.
Answer:
The partnership business has more capital as compared to Sole Trading concern.

Question 2.
Joint Hindu Family Business exists outside India.
Answer:
Joint Hindu Family Business exists only in India.

Question 3.
The liability of the co-parceners is unlimited in a Joint Hindu Family firm.
Answer:
The liability of the co-parceners is limited in a Joint Hindu Family firm.

Question 4.
Co-operative society is a compulsory association of individuals to provide services to its members.
Answer:
Co-operative society is a voluntary association of individuals to provide services to its members.

Question 5.
Formation of a Joint Stock company is easy.
Answer:
Formation of a Joint Stock company is complicated.

Question 6.
There is more scope for expansion in a Co-operative society.
Answer:
There is less scope for expansion in a Co-operative society.

Question 7.
In a Public company, there are minimum 2 fTwol Director’s.
Answer:
In a Public company, there are minimum 3 (Three) Director’s.

Question 8.
The registration of a Sole Trading concern is compulsory.
Answer:
The registration of a sole trading concern is not compulsory.

Explain the following terms/concepts

Question 1.
Active Partner.
Answer:

1. A partner who takes active participation in day-to-day working of the firm, is called as active partner.
2. He is also called as ordinary/general/ actual/ working partner.
3. He acts as a manager, organizer, advisor and controller of the firm.

Question 2.
Dormant Partner
Answer:

1. A partner who does not take active participation in day-to-day working of the firm, is called as dormant partner or sleeping partner.
2. He contributes to the capital of the firm and also shares profit or loss of the business firm.
3. He is liable for the debts of the firm.
4. He cannot find the business firm or third party by his acts.

Question 3.
Unlimited Liability
Answer:

1. It means that there is no distinction made between personal property and business property of a person. It further means that if business assets are not sufficient to pay off liabilities of a business than personal property of a person holding business will be attached to business property.
2. Sole trader in case of sole trading concern, partners in case of partnership firm, Karta in case of Joint Hindu Family Business, has unlimited liabilities.

Question 4.
Principal – Agent Relationship
Answer:

1. This term is related to partnership firm of organizations.
2. In partnership firm all partners are the joint owners of the business and all takes part in the management of the business.
3. Hence, every partner acts in dual role in partnership firm i.e.
   (a) When within the firm they act as ‘Principal’ and
   (b) When they deal with outsiders they act as an ‘Agent’.

Question 5.
Producer’s Co-operatives
Answer:

1. They are voluntary associations of small producers and artisans, who come together to face the competition and increase the productions.
2. Producers Co-operatives are of 2 types – (a) Industrial Service Co-operatives and (b) Manufacturing Co-operatives.
3. Such co-operatives sells the output of members in the market and then profits are distributed among the members.
4. They provide raw materials, implements tools, technical guidance to members on easy terms.

Question 6.
Housing Co-operatives
Answer:

1. Housing Co-operatives are owned by the residents.
2. Such societies purchases the land, develops it, constructs houses, etc. and allot them to members.
3. They arrange loans from Government and Non-Government sources.

Question 7.
Common Seal
Answer:

1. A company being an artificial person cannot sign on its own.
2. So, the law requires, every company to have its seal, bearing its name on it.
3. Common seal is a symbol of company’s incorporate existence. It is like a signature of the company.
4. It has to be affixed on all the important documents of the company.
5. It has to be witnessed by a Company Secretary and minimum 2 directors.

Study the following case/situation and express your opinion

1. Mr. Jumbo a Chartered Accountant by profession and Mrs. Timbo, an Architect by profession running a firm namely ‘Buildsheet’ in Nagpur.

Question 1.
Identify business in above example.
Answer:
Partnership firm

Question 2.
Comment on it?
Answer:
It is a voluntary association of two persons with a common objective in mind.

Question 3.
Which two professions are mentioned here?
Answer:
A Chartered Accountant and an Architect.

2. Ram and Rahim have formed a Joint Stock company to produce and sell toys with a paid up capital of Rs 2,00,000.

Question 1.
Name the type of company.
Answer:
Private Limited Company.

Question 2.
List two features of the company.
Answer:
(a) Minimum 2 members are required to form a private company.
(b) Minimum paid up capital required is Rs 1,00,000.

3. Rahul is the only owner of his restaurant. All the assets belongs to him.

Question 1.
Name the type of business organisation.
Answer:
Sole Trading Concern.

Question 2.
State two features.
Answer:
(a) Single ownership
(b) No separate entity

4. Ajit Brothers is a firm formed for the specific purpose of constructing a bridge.

Question 1.
Name this type of business.
Answer:
Partnership for a particular venture or particular partnership.

Question 2.
When does this business dissolve?
Answer:
This business will dissolve on the completion of the venture i.e. after completing the bridge.

5. Employees Union of Hindustan Mills start a retail shop to provide cloth at reasonable price to its members.

Question 1.
Identify the form of business organisation.
Answer:
The type of organisation is Co-operative society.

Question 2.
State two features of the organisation.
Answer:
(a) Voluntary membership
(b) Service motive

6. Teachers of different colleges in Mumbai form an association to buy land and construct flats for them.

Question 1.
Name the form of business organisation.
Answer:
Co-operative Society

Question 2.
Is the association of members voluntary or compulsory.
Answer:
The association is voluntary, as it is one of the features of the Co-operative Society.

7. Mr. Shyam is a shareholder of Coal India Limited. He is in need of money. He transfers his shares to another person.

Question 1.
Name the kind of company.
Answer:
Public Limited Company

Question 2.
Can he transfer his shares.
Answer:
Yes, he can transfer his shares to anyone as it is one of the main features of a Public Limited Company.

8. If the business is a sole trading concern with a capital of Rs 25,000, but the debts are amounting to Rs 50,000.

Question 1.
Is the entrepreneur liable to pay his creditors.
Answer:
Yes, he has to pay to his creditors.

Question 2.
Give reasons.
Answer:
A sole trading concern has unlimited liability therefore, he has to pay his creditors by selling off his private property.

9. Amul – the taste of India started 65 years ago in 1946 in Anand.

Question 1.
Name the type of business organisation.
Answer:
Co-operative Society

Question 2.
What was the mission for starting AMUL.
Answer:
AMUL was started with a mission to stop the exploitation of farmers by middlemen.

Distinguish between the following

Question 1.
Joint Hindu Family Firm and Sole Trading Concern.
Answer:

	Joint Hindu Family	Sole Trading Concern
Meaning	In Joint Hindu Family Firm, the Joint Hindu Family conducts business according to Hindu Laws.	Sole Trading Concern is owned and controlled by one person.
Formation	Joint Hindu Family Firm comes into existence by operation of Hindu Law.	Sole Trading Concern can be formed easily. It is started as soon as the owner decides.
Number of Members	Membership of the firm depends upon the birth and death in the family. There is no limit on membership.	Sole Trading Concern is owned by a single person.
Sharing of Profits/Losses	The profits and losses shared between Karta and Co-parceners.	The sole trader alone enjoys all the profits of business. He alone bears the losses of business.
Liability	Karta has unlimited liability. The liability of Co-parceners is limited.	The sole trader has unlimited liability.
Act	Joint Hindu Family Firm follows the Hindu Succession Act, 1956.	There is no special legislation governing the sole trading concern.
Stability	Comparatively more stability because if Karta dies, the next seniormost family member can take over the business.	There is no stability as life of the organization depends upon the survival of the sole trader.
Capital	More finance is available with the firm. Therefore, there is more capital.	Sole trader has limited funds. Therefore, the concern has limited capital.
Ownership	Assets and property of business is jointly owned by family members.	Assets and properties of business are owned by the sole trader.
Efforts and Rewards	There is no direct relation between efforts and rewards.	There is a direct relation between efforts and rewards.

Question 2.
Partnership Firm and Joint Stock Company.
Answer:

	Partnership Firm	Joint Stock Company
Meaning	Partnership firm is controlled by two or more persons called as partners.	Joint Stock Company is an incorporated voluntary association created by law, having an independent legal status, owned by shareholders and managed by Directors.
Act	Partnership firm is governed by Indian Partnership Act, 1932.	Joint Stock Companies are governed by Indian Companies Act, 2013.
Membership	Minimum two partners and Maximum 50 partners.	Private company- Minimum – 2 Maximum – 200Public company- Minimum – 7 Maximum – No limit
Liability	The liability of partners is unlimited, joint and several.	The liability of shareholders is limited. Up to the unpaid amount of shares held by them.
Ownership & Management	Partners are owners and managers of the firm.	Joint Stock Company is owned by shareholders of the company and managed by Board of Directors.
Formation	The formation is simple and less costly. Only an oral or written agreement is needed between partners.	Formation of a Joint Stock Company is. difficult, costly and time-consuming.
Stability	A partnership firm does not enjoy a stable life. Life of the firm is affected by death, insolvency or lunacy of even one partner.	Joint Stock Company has a long and stable life. It has perpetual succession. Life of the company is not affected by death, insolvency or lunacy of any member or Director.
Registration	Registration of a partnership firm is optional. It is compulsory in the State of Maharashtra.	Registration of a Joint Stock Company is compulsory.
Legal Status	A partnership firm has no legal status that is distinct from its members.	A Joint Stock Company has a separate legal status.
Transfer of Shares	A partner can transfer his share only with the consent of other partners.	Shares of a public company are freely transferable.
Authority of Members	A partner has implied authority. He is an agent of the firm.	A shareholder has no implied authority.
Winding up	A partnership firm can be easily dissolved. There are not much legal formalities for winding up the firm.	A Joint Stock Company can be dissolved only by the court. A proper procedure has to be followed for dissolving the company.

Question 3.
Sole Trading Concern and Joint Stock Company.
Answer:

	Sole Trading Concern	Joint Stock Company
Meaning	Sole proprietorship is owned, managed and controlled by one person.	Joint Stock Company is an incorporated association created by law, having an independent legal status, owned by shareholders and managed by board of directors.
Formation	Sole trading concern can be formed easily. It is started as soon as the owner decides.	Formation of a Joint Stock Company is difficult, costly and time-consuming. There are many legal formalities needed to form a joint stock company.
Liability	The sole trader has unlimited liability.	Shareholders have limited liability. It depends upon unpaid value of shares.
Numbers of Member	Sole trading concern is owned by a single person.	The minimum number of persons needed to start a private company is two and maximum is fifty. Minimum number of public company is seven and maximum is unlimited.
Registration	Sole trading concern need not be registered.	Joint Stock Company has to be compulsorily registered.
Act	There is no Act for a Sole Trading Concern.	Companies have to follow Indian Companies Act, 2013.
Legal Status	A Sole Trading Concern does not have a legal status.	Joint Stock Company has a legal status.
Secrecy	It is possible to have maximum business secrecy in a Sole Trading Concern.	Business Secrecy cannot be maintained’. Books of accounts have to be kept open for inspection to shareholders.
Capital	As there is only one owner, less capital is available for business.	Capital is collected from shareholders in the form of shares. Huge capital can be collected for business.
Stability	A Sole Trading Concern does not have a stable life. Life of the sole trader and his concern are one and the same.	The company enjoys a long stable life.

Answer in brief

Question 1.
State any four merits of Sole Trading Concern.
Answer:
1. Easy Formation : A sole trading concern can be easily formed. Not much legal formalities are needed to start a sole trading concern. A person who is competent to enter into contract can start a sole trading concern.

2. Prompt Decision Making: A sole trader can take all decisions by himself. There is no external interference. As he can take quick decisions, prompt actions is also possible. This Organisation is suitable for business where quick decisions have to be taken. Ex. Share Trading.

3. Flexibility : The sole trader can make changes in business easily. He can expand or curtail business activity, whenever needed. He is the only person to take decisions in business. There is a lot of flexibility in sole trading concern.

4. Minimum Government Regulations : Sole trading concern need not follow any Special Act. There are not much legal formalities needed for forming and closing a sole trading concern. Only the general law of the country has to be followed. It states that a person doing sole trading business:

• must be a major (above 18 years)
• must be of sound mind
• must not be disqualified by any law to do business.

Question 2.
Explain any four demerits of Sole Trading Concern.
Answer:
1. Limited Capital : The sole trader is the only owner of business. He alone contributes capital for business. Capital is in the form of savings and borrowings from friends and relatives. In his individual capacity he cannot raise loans from banks to a large extent. The growth and expansion of business is affected because of limited capital. This is disadvantage to business.

2. Limited Managerial Ability : There is only one person to manage business. Inspite of his knowledge, the sole trader is not able to manage business efficiently. The sole trader may not be an expert in all fields like finance, advertising, management etc. Therefore, management ability is limited.

3. Unlimited Liability : The liability of the sole trader is unlimited. There is no difference between personal property and business property of sole trader. But unlimited liability prevents further expansion. He does not take risk in business. He is overcautious in taking decision which affects progress of business.

4. No Stability : A sole trading concern does not have a continuous existence. It does not have a stable life. Life of the organisation depends upon the life of the sole trader. In case the sole trader dies, becomes insolvent or insane the business has to be closed down.

Question 3.
What are the features of Joint Hindu Family Business ? (Any 4)
Answer:
1. Formation : Joint Hindu Family Business is created by operation of Hindu Law. There is no agreement between members. Each member becomes the co-parcener in the family business by birth.

2. Membership : Joint Hindu Family business has two types of partners.
(a) Karta : The seniormost male member of the family.
(b) Co-parceners (Copartners) : Other family members.
There is no limit on maximum number of members. In the state of Maharashtra, even girls born in the family become co-parceners of the firm. The number of members keep on changing depending on birth and death in the family.

3. Joint Ownership : The property of the firm is jointly owned by three generations of the family. Karta is the custodian of the joint property. All family members own the assets of business.

4. Sharing of Profits / Losses : Ratio of sharing of profits or losses of Karta and co-parceners is not given in the Hindu Act. The ratio of profit sharing keeps on changing depending on birth and death in the family.

Question 4.
Give any four demerits of Joint Hindu Family Business.
Answer:
(i) Limited Resources : Business is done by the joint family. So capital brought in by the family is limited. The capacity to raise funds is also limited as liability of co-parceners is limited. This affects growth and expansion of business.

(ii) Limited Managerial Ability : The management of business is totally taken care of by Karta. So the entire business depends upon the ability of the Karta. He does not even consult co-parceners for decision making. The Karta may not be an expert in all areas of business. Due to inadequate funds it is not possible to hire experts. Therefore, Joint Hindu Family Firm faces the disadvantage of limited managerial ability.

(iii) Unlimited Liability : The liability of Karta is unlimited. His decision making process becomes very slow. He is too cautious and unwilling to take risk in business. As there is no difference between personal property and business property of Karta he is afraid to take bold decisions. This affects the progress of business.

(iv) Limited Expansion : Even if Karta takes a lot of interest in business, the firm has the disadvantage of limited growth. Two reasons i.e., limited capital and limited managerial ability results in limited growth of business.

Question 5.
State any four merits of partnership firm.
Answer:
(i) Easy Formation : It is easy to form a partnership firm. Only an agreement is needed to start the firm. The agreement between partners may be an oral or written one. A written agreement is always preferred to avoid disputes in future. Not many legal formalities are needed for forming or closing business. Even the procedure for registration is simple.

(ii) Large Capital: Many partners come together to start a firm. Partners have joint responsibility to collect capital for the firm. As number of persons are more than sole trading concern, large capital can be collected. If business has to be expanded more capital has to be collected.

(iii) Business Secrecy : More secrecy can be maintained in business. Books of accounts need not be published. There is no legal requirement to publish annual report. Information is not leaked out to competitors, which is an advantage to the firm. If partners want they can keep secrets to themselves.

(iv) Rational Decisions : Decisions are taken collectively by partners. Two heads are always better than one.. Partners discuss can take decisions, which are always balanced. Partners have unlimited liability therefore they are careful in taking decisions.

Justify the following statements

Question 1.
There is no limit for membership in Joint Hindu Family Business.
Answer:

1. Joint Hindu Family Firm is jointly owned by all family members.
2. When a Hindu Joint Family does business and passes it on from one generation to another it is called a Joint Hindu Family business.
3. There are two types of members in Joint Hindu Family Firm – Karta and Co-parceners.
4. The membership of Joint Hindu Family Firm is unlimited.
5. Membership is not limited because it depends upon the death and birth in the family. All the persons born in the family become a member of the family by birth.
6. A person becomes a member even by adoption into the family.
7. Thus, there is no maximum limit for membership in a Joint Hindu Family Business.

Question 2.
The membership of a co-operative society is voluntary.
Answer:

1. Co-operative society is a voluntary association of persons formed for the purpose of promoting the interest of its members.
2. There is open membership i.e., membership is open to all. No difference is made on language, religion, caste etc. A person becomes a member by purchasing shares of the organization.
3. There is complete freedom about becoming or not becoming the member of the organization.
4. A person can join on his own free will. There is no compulsion for becoming a member.
5. He can leave the organization by giving due notice as and when he desires.
6. The opportunity of becoming a member is given to all which means co-operative organization is a voluntary organization.
7. Thus, the membership of a co-operative society is voluntary.

Question 3.
In partnership, the liability of every partner of the firm is unlimited.
Answer:

1. Partnership is an association of persons competent to enter into contracts. The aim is to carry lawful business.
2. All partnerships in India follow the Indian Partnership Act of 1932.
3. Accordingly the liability of every partner is unlimited.
4. Partners have joint and several liability. It means each partner is individually liable and jointly liable for the debts of the firm.
5. There is no difference between personal property and business property of the partners. In case business assets are not sufficient to pay debts, the personal property of each and every partner can be used.
6. If one partner is declared insolvent, his liability has to be borne by solvent partners.
7. Thus, in partnership, the liability of every partner of the firm is unlimited.

Question 4.
The owner of the sole proprietorship is the sole decision maker of his business.
Answer:

1. A sole trader does business alone.
2. He invests his own capital, skill and intelligence in the management of business.
3. A sole trader is the only manager of business. So he is the sole decision maker of his business.
4. He is not answerable to anyone and need not consult anyone for doing business.
5. There is no external interference.
6. Therefore, he can take quick decisions and prompt actions and take advantage of profit – oriented situations. Thus, sole trader is the only decision maker and therefore has complete control on business.

Question 5.
Sole Trading Concern is easiest to form.
Answer:

1. Sole trading concern is owned by only one person.
2. A very Simple process is needed to start a sole trading concern.
3. There is no complicated legal formalities to start a sole trading concern, as in the case of joint stock company.
4. A licence from appropriate authority is needed.
5. Only the general law of the country has to be followed for starting business.
6. A person must be of sound mind, a major and must not be disqualified by any law to do business.
7. Thus, sole trading concern is the easiest form of organization to be started.

Balbharti Maharashtra State Board 11th OCM Important Questions Chapter 3 Small Scale Industry and Business Important Questions and Answers.

Maharashtra State Board 11th Commerce OCM Important Questions Chapter 3 Small Scale Industry and Business

Select the Correct option and rewrite the sentence.

Question 1.
Small Scale Industries play an important role in ……………. countries.
(a) developed
(b) developing
(c) advanced
Answer:
(b) developing

Question 2.
Traditionally a small scale industries are those using power with less than ……………… employees.
(a) 20
(b) 30
(c) 50
Answer:
(c) 50

Question 3.
……………….. is second largest industry which creates huge employment.
(a) SSI
(b) Reliance Ltd.
(c) Indian Railways
Answer:
(a) SSI

Question 4.
……………….. of people from rural to urban is reduced by small scale industries.
(a) Immigrations
(b) Migrations
(c) Re-migrations
Answer:
(b) Migrations

Question 5.
Small Scale Industries are ……………….. in operation.
(a) rigid
(b) flexible
(c) static
Answer:
(b) flexible

Question 6.
Small Scale Industries uses ……………….. technology.
(a) outdated
(b) advanced
(c) future
Answer:
(a) outdated

Question 7.
………………. resources are used by SSI.
(a) Foreign
(b) City
(c) Domestic
Answer:
(c) Domestic

Match the pairs

Question 1.

Group A	Group B
(a) Small Manufacturing Sector	(1) Investment more than Rs 2 crores but does not exceed Rs 5 crores
(b) Modern Small Scale Industries	(2) SSI
(c) Large Employment	(3) Capital problem
(d) High absenteeism	(4) Investment does not exceed Rs 25 lakhs
(e) Medium Services Sector	(5) Electric Appliances
	(6) Labour problem
	(7) Investment does not exceed Rs 10 lakhs
	(8) Sericulture
	(9) L&T

Answer:

Group A	Group B
(a) Small Manufacturing Sector	(4) Investment does not exceed Rs 25 lakhs
(b) Modern Small Scale Industries	(5) Electric Appliances
(c) Large Employment	(2) SSI
(d) High absenteeism	(6) Labour problem
(e) Medium Services Sector	(1) Investment more than Rs 2 crores but does not exceed Rs 5 crores

Give one word/phrase/term

Question 1.
Tiruppur a city located in state of Tamil Nadu is famous for which export.
Answer:
Textile export

Question 2.
Industries which requires low gestation period.
Answer:
Small Scale Industries

Question 3.
Part of rural industry based on agricultural products.
Answer:
Agro based industries

Question 4.
Moving of people from one place to another in search of job.
Answer:
Migration

Question 5.
Regular interruption of electricity.
Answer:
Load shedding

Question 6.
Life blood of the enterprise.
Answer:
Finance

Question 7.
Assessment of a project.
Answer:
Project Appraisal

Question 8.
Procedure of recruitment, training and placement.
Answer:
Staffing.

State True or False

Question 1.
Small Scale Industries increases import of raw materials from foreign countries.
Answer:
False

Question 2.
Tiruppur contribute to export textiles and earn valuable foreign exchange for India.
Answer:
True

Question 3.
Japan became major economic power because of many small entrepreneurs after second world war.
Answer:
True

Question 4.
Nearly 60% of the industrial exports are contributed by SSI.
Answer:
False

Question 5.
Small Scale Industries lead to inequalities of income, wealth and power.
Answer:
False

Question 6.
Small Scale Industries are more flexible.
Answer:
True

Find the odd one

Question 1.
Manufacturing Sector, Services Sector, Construction Sector
Answer:
Construction Sector

Question 2.
Does not exceed ?10 lakhs, Does not exceed Rs 25 lakhs, Does not exceed Rs 2 crores.
Answer:
Does not exceed Rs 25 lakhs

Question 3.
Job opportunities, Regional Balance, Increases Migration
Answer:
Increases Migration

Question 4.
Labour Problem, Marketing problem, Problem of transport, Domestic problem
Answer:
Domestic problem

Question 5.
Selection of product, Selection of place, Selection of House
Answer:
Selection of House.

Complete the sentences

Question 1.
Problem of is reduced or minimized by SSI.
Answer:
migration

Question 2.
Gestation period is low for industries.
Answer:
Small Scale

Question 3.
means the assessment of a project.
Answer:
Project appraisal

Question 4.
SSI provides raw material, semi finished goods to
Answer:
Large Scale

Question 5.
place from Tamil Nadu export textiles.
Answer:
Tiruppur

Question 6.
method of production is used by SSI.
Answer:
Old and outdated.

Select the correct option

(Modern Small Scale Industries, Challenges before Small Scale Industries, Traditional Small Scale Industries, Importance of Small Scale Industries)

Group A	Group B
(1) Hand loom, Handicraft, Coir, Sericulture	——————-
(2) —————–	Bicycles parts, sewing machines, Blades, Razor, Electric Appliances, Spare parts
(3) Job opportunities, Regional balance, Reduce migration, Maximum use of Natural Resources	——————-
(4) ————–	Load-shedding, voltage fluctuation.

Answer:

Group A	Group B
(1) Hand loom, Handicraft, Coir, Sericulture	Traditional Small Scale Industries
(2) Modern Small Scale Industries	Bicycles parts, sewing machines, Blades, Razor, Electric Appliances, Spare parts
(3) Job opportunities, Regional balance, Reduce migration, Maximum use of Natural Resources	Importance of Small Scale Industries
(4) Challenges before Small Scale Industries	Load-shedding, voltage fluctuation.

Answer in one sentences

Question 1.
What are the challenges before Small Scale industries?
Answer:
Old and outdated technology, finance, marketing, load shedding, voltage fluctuation, sickness, etc. are the challenges before Small Scale Industries.

Question 2.
What are the sectors of business classification as per SSI?
Answer:
There are two sectors of business as per SSI i.e.

1. Manufacturing sector
2. Services sector.

Question 3.
What is the classification of Small Scale Industries?
Answer:
Small Scale Industries are classified into two i.e. Traditional Small Scale Industries and Modern Small Scale Industries.

Correct the underlined word and rewrite the following sentences.

Question 1.
SSI is first largest industry which creates huge employment.
Answer:
SSI is second largest industry which creates huge employment.

Question 2.
Migration of people from rural to urban can be increase due to SSI.
Answer:
Migration of people from rural to urban can be reduced due to SSI.

Question 3.
Many Small Scale Industries provide finished goods to large scale industries.
Answer:
Many Small Scale Industries provide semi finished goods to large scale industries.

Question 4.
India is facing labour scarcity problem.
Answer:
India is facing labour problem.

Question 5.
Nearly 60% of industrial exports are contributed by SSI.
Answer:
Nearly 40% of industrial exports are contributed by SSI.

Study the following case/situation and express your opinion.

1. Mr. Rahim is keenly interested in starting Small Scale business. But he is worried about the challenges before Small Scale business. Guide him about the solutions to face these challenges.

Question 1.
Guidelines to start a small scale business:
Answer:
1. Method of Production : It is said that small scale industries use old methods of production Mr. Rahim can improve the method of production by using new technology. He can purchase the new technology at affordable rate and give training to the workers so that they can improve the skills and in turn increase the production.

2. Finance : Rahim can get information about various schemes given by government to raise finance. He can also compare the rate of interest of various financial institutes and take loan at a lower rate of interest.

3. Raw Material : Rahim can start business in area near by to the availability of raw material so that he can save the cost of transportation of raw material. If the cost of raw material decreases he will not have to compromise on the quantity and quality of raw material.

4. Labour Problem : Rahim can give training to the workers so that they can increase the productivity. Skilled workers can work more efficiently. Rahim should also provide with job security so that workers do not leave the job and experienced workers can increase productivity.

5. Marketing Problem : Rahim should have thorough study of need of the customer in the market. He should have all market updates so that he can make changes according to the requirement of customers. He can do market survey with use of latest technology i.e. Internet and WhatsApp. He can make use of these technology for advertising of his product also.

6. Transportation : As stated in point no. (c) Rahim can start business in area nearby to the availability of raw material so that he can save the cost of transportation of raw material. He can also keep the cost of the product less and then add the cost of transportation afterwards so that cost of his product will look less.

7. Sickness : Rahim will have to take care of the credit system which he is going to follow. It is advisable that he sells the goods on cash basis and not on credit basis. If he gives it on credit he should be good at follow up. While purchasing raw material he can take it on credit basis so that he gets adequate working capital to use. If he gets sufficient working capital he can produce goods on time and the industry will not become sick.

8. Globalisation : Rahim is to be aware about the various competitive products and other similar products which are there in the market. He will have to be updated with the latest things and latest prices and make changes in his small unit regularly as and when required.

Balbharti Maharashtra State Board Class 11 Secretarial Practice Important Questions Chapter 12 Correspondence with Statutory Authorities Important Questions and Answers.

Maharashtra State Board 11th Secretarial Practice Important Questions Chapter 12 Correspondence with Statutory Authorities

1A. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
Headquarters of Ministry of Corporate Affairs.
Answer:
New Delhi

Question 2.
The number of Regional Directors.
Answer:
Seven

Question 3.
Total number of Registrar of Companies.
Answer:
Twenty-two

Question 4.
The number of ROC’s – cum Official liquidator.
Answer:
Nine

Question 5.
Officer appointed by High Court to look into the matter of winding up of a company.
Answer:
Official Liquidator

Question 6.
Principal Bench of NCLT.
Answer:
New Delhi

1B. State whether the following statements are True or False.

Question 1.
MCA operates with the help of 10 Regional Directors.
Answer:
False

Question 2.
NCLT works through 25 benches.
Answer:
False

Question 3.
MCA supervises the working of professional bodies like ICAI, and ICSI.
Answer:
True

1C. Complete the sentences.

Question 1.
To issue an order for seizure of books and papers, ROC has to seek _____________
Answer:
Special Court

Question 2.
MCA is concerned with administration of _____________
Answer:
The Companies Act, 2013

Question 3.
MCA supervises professional body like _____________
Answer:
Institute of Secretaries of India (ICSI)

Question 4.
The headquarter of MCA is at _____________
Answer:
New Delhi

Question 5.
An organization who act as a middleman between capital provider and capital seekers is called as _____________
Answer:
Market Intermediaries

Question 6.
Informing about difficulty in uploading e-form means _____________
Answer:
Raising a ticket

1D. Select the correct option from the bracket.

Question 1.

Group ‘A’	Group ‘B’
(1) Public Deposits	……………………….
(2) ………………………	The agent between capital provider and seeker

(Market Intermediaries, 36 Months)
Answer:

Group ‘A’	Group ‘B’
(1) Public Deposits	36 Months
(2) Market Intermediaries	Agents between capital provider and seller

1E. Answer in one sentence.

Question 1.
Name the authority who supervises the working of ROC and the Official Liquidator.
Answer:
The authority who supervises the working of ROC’s and the Official Liquidator is Regional Director (RD).

Question 2.
Who can extend the period of helding the Annual General Meeting?
Answer:
Registrar of Company can extend the period of helding the Annual General Meeting.

Question 3.
Where can an appeal be made against the order of NCLAT?
Answer:
An appeal against the order of NCLAT can be made to Supreme Court within 60 days of receipt of the order of NCLAT.

Question 4.
What do you mean by Market Intermediaries?
Answer:
People or organizations who act as a middleman between the capital provider and capital seeker are called as Market Intermediaries. E.g. Stock Brokers, bankers, underwriters, etc.

1F. Correct the underlined word and rewrite the following sentences.

Question 1.
An appeal can be made against the order issued by NCLAT within 90 days.
Answer:
An appeal can be made against the order issued by NCLAT within 60 days.

Question 2.
An appeal against the order issued by NCLAT can be made to High Court.
Answer:
An appeal against the order issued by NCLAT can be made to Supreme Court.

Question 3.
MCA conducts its operations through 11 Regional Directors.
Answer:
MCA conducts its operations through 7 Regional Directors.

2. Answer in brief.

Question 1.
Give a flow chart to explain the organizational setup to administer the Companies Act, 2013.
Answer:
Organizational set up to administer the Companies Act, 2013.

3. Justify the following statements.

Question 1.
Explain the reasons for not holding Annual General Meeting by a company on time.
Answer:
Reasons for not holding Annual General Meeting on time:

• Directors traveling abroad, so cannot attend Annual General Meeting.
• Employees Strike in a company.
• A raid by Income Tax Department.
• Annual Financial statement not approved or not audited or incomplete audit or loss of financial data due to natural calamity.

Question 2.
Under what circumstances, Secretary has to correspond with Statutory authorities.
Answer:
Under the following circumstances, Secretary has to correspond with a few of the Statutory authorities:

• To correspond with ROC for seeking extension of time for holding Annual General Meeting.
• To correspond with MCA for ‘Ticket Raising’ or other service-related technical complaints.
• To correspond with SEBI in reply to the complaint by the investor.
• To correspond with NCLT seeking extension of time to repay Public deposits.

Balbharti Maharashtra State Board Class 11 Secretarial Practice Important Questions Chapter 11 Correspondence with Banks Important Questions and Answers.

Maharashtra State Board 11th Secretarial Practice Important Questions Chapter 11 Correspondence with Banks

1A. Select the correct answer from the options given below and rewrite the statements.

Question 1.
Negotiable Instrument which can be discounted with the bank _____________
(a) Cheque
(b) Bills of Exchange
(c) Bank Draft
Answer:
(b) Bills of Exchange

Question 2.
Bank overdraft is a _____________ term facility provided by bank.
(a) medium
(b) short
(c) long
Answer:
(b) short

Question 3.
A loan for a period of more than 5 years is called as _____________ loans.
(a) short term
(b) long term
(c) medium-term
Answer:
(b) long term

Question 4.
Purchase and sale of securities is _____________ function of Bank.
(a) primary
(b) utility
(c) agency
Answer:
(c) agency

1B. Match the pairs.

Question 1.

Group ‘A’	Group ‘B’
(a) Current Account	(1) Time Deposits
(b) Financial Arrangement	(2) ATM, Credit Card and Debit Card
(c) Agency Function	(3) Demand Deposits
(d) Utility Function	(4) Collection of Dividend and Interest
(e) Cash Credit	(5) Bank Overdraft
(f) Bill of Exchange	(6) Advance against the stock of raw material
(g) Letter of Credit	(7) Non-negotiable instrument
	(8) Bank Draft
	(9) Negotiable Instrument
	(10) International trade transaction

Answer:

Group ‘A’	Group ‘B’
(a) Current Account	(3) Demand Deposits
(b) Financial Arrangement	(5) Bank Overdraft
(c) Agency Function	(4) Collection of Dividend and Interest
(d) Utility Function	(2) ATM, Credit Card, and Debit Card
(e) Cash Credit	(6) Advance against the stock of raw material
(f) Bill of Exchange	(9) Negotiable Instrument
(g) Letter of Credit	(10) International trade transaction

1C. Write a word or a term or a phrase that can substitute each of the following statements.

Question 1.
Deposits generating saving habits among the people.
Answer:
Saving Deposits

Question 2.
Deposits are not repayable on demand.
Answer:
Time Deposits

Question 3.
Deposits repayable on demand.
Answer:
Demand Deposits

Question 4.
The loan was provided for a period of less than one year.
Answer:
Short Term Loan

Question 5.
The loan is provided for a period between 1 to 5 years.
Answer:
Medium-Term Loan

Question 6.
The loan was provided for a period of more than 5 years.
Answer:
Long Term Loan

1D. State whether the following statements are True or False

Question 1.
Letter of credit is issued by banks for domestic trade transactions.
Answer:
False

Question 2.
Bill of Exchange is a negotiable instrument.
Answer:
True

Question 3.
The bank acts as a trustee, attorney, and executor of the will.
Answer:
True

Question 4.
RTGS is an agency function of the Bank.
Answer:
False

Question 5.
The bank plays the role of Depository Participant (DP).
Answer:
True

1E. Find the odd one.

Question 1.
Loan, Deposit, Cash credit, Overdraft facility.
Answer:
Deposit

Question 2.
Cheque, Withdrawal slip, Pay in slip.
Answer:
Pay in slip

Question 3.
Travellers Cheque, Safe Deposit Vault, NEFT, Transfer of Money.
Answer:
Transfer of Money

Question 4.
Collection of Dividend, Collection of cheque, Buying, and Selling of Securities, Payment of Electricity Bill.
Answer:
Buying and Selling of Securities

1F. Complete the sentences.

Question 1.
The appointment of bankers of a company is made by the _____________
Answer:
Board of Directors

Question 2.
Banker is a dealer in _____________
Answer:
Money

Question 3.
Bank account in which money is deposited at regular interval is a _____________
Answer:
Recurring Deposit Account

Question 4.
The instrument which can be discounted with the bank is a _____________
Answer:
Bills of Exchange

Question 5.
Businessman, Companies etc, usually open a _____________ account with a bank.
Answer:
Current

Question 6.
There is no restriction on the withdrawals from _____________ account.
Answer:
Current

Question 7.
Interest is not paid on the _____________ account.
Answer:
Current

Question 8.
_____________ account is suitable for salaried people.
Answer:
Saving

Question 9.
Stop payment letter is sent, when the cheque is _____________
Answer:
lost/misplaced

Question 10.
Withdrawals are not permitted from the _____________ accounts.
Answer:
Fixed Deposits

Question 11.
The facility given by the bank to draw more money than the actual balance in the credit is called _____________
Answer:
Overdraft facility

Question 12.
A deposit which is kept for a fixed period in a bank is a _____________
Answer:
Fixed Deposit

Question 13.
A type of bank account which is generally opened by a businessman for his business transactions is a _____________
Answer:
Current account

Question 14.
A type of account in which the interest is paid at higher rate is a _____________
Answer:
Fixed Deposit Account

1G. Select the correct option from the bracket.

Question 1.

Group ‘A’	Group ‘B’
(1) Loans not more than one year	……………………….
(2) ……………………..	Cash Credit
(3) Collection of cheques	………………………..
(4) ……………………..	Letter of Credit

(Interest charged on, actual amount withdrawn, Agency function, Utility function, Short Term loans)
Answer:

Group ‘A’	Group ‘B’
(1) Loans not more than one year	Short Term loans
(2) Interest charged on actual amount withdrawn	Cash Credit
(3) Collection of cheques	Agency function
(4) Utility function	Letter of Credit

1H. Answer in one sentence.

Question 1.
What is a demand deposit?
Answer:
Deposits that are repayable on demand are called demand deposits. There are 2 types of demand deposits i.e Saving Deposits and Current Deposits.

Question 2.
What is a time deposit?
Answer:
Deposits that are repayable after a specific period of time are called time deposits. There are 2 types of time deposits i.e. Fixed Deposits and Recurring Deposits.

Question 3.
What do you mean by loan?
Answer:
Any amount granted or lent for a specific period of time against personal security, gold or silver, or other movable or immovable assets is called a loan.

Question 4.
What is the Bill of Exchange?
Answer:
It is a written unconditional order by the seller to the buyer, to pay a certain sum of money on a future fixed date for payment of goods or services received.

1I. Correct the underlined word and rewrite the following sentences.

Question 1.
Short-term loans are of more than 5 years.
Answer:
Long-term loans are of more than 5 years.

Question 2.
Bills of Exchange are the non-negotiable instrument.
Answer:
Bills of exchange is a negotiable instrument.

Question 3.
The collection of cheques and bills is a utility function of the bank.
Answer:
The collection of cheques and bills is the agency function of the bank.

Question 4.
The rate of interest is high for saving deposits.
Answer:
The rate of interest is high for fixed deposits.

Question 5.
Deposits that are repayable after the specific period is Demand Deposit.
Answer:
Deposits that are repayable after the specific period are Time Deposits.

2. Answer in brief.

Question 1.
Explain the types of term loans.
Answer:
A loan granted for a specific time period against personal security, gold or silver, and movable and immovable assets is called a term loan.
Types of term loans:

• Short-term loan: A loan repayable within 1 year is called a short-term loan. It is generally taken by businessmen to meet their working capital requirements.
• Medium-term loan: A loan repayable within 2 years to 5 years period is called a medium-term loan.
• Long-term loan: A loan repayable after 5 years is called a long-term loan. It is taken by businessmen for the growth and development of the business.

Question 2.
Explain the types of Advances.
Answer:
Advance is a credit facility provided by the bank to its customers. Advances are for a shorter period than loans.
Type of Advances:

• Overdraft: It is an arrangement in which a customer i.e. Current A/c holder, is allowed to overdrew money in excess of the credit balance in his account. It is allowed against collateral securities like – shares, F.D.R., Government securities, etc.
• Cash credit: In this mode of advance, a separate bank account called ‘Cash Credit Account is opened in the name of the borrower. He can withdraw from this account as and when required. It is allowed against security like – stock of raw materials, finished goods, etc.
• Discounting of Bills: Discounting of bills means encashing the Bills of Exchange before its due date with the banker. The bank charges a certain amount of interest for this service which is called a discounting rate.

3. Justify the following statements.

Question 1.
In cash credit, the customer’s account is credited by a bank with the sanctioned amount.
Answer:
Cash credit is another kind of credit facility given by the bank to its customers including businessmen, companies, etc.

• A separate bank account known as a “Cash Credit Account” is required to be opened in the name of the borrower.
• The bank credits the account as per the sanctioned cash limit from which the customer can utilize funds whenever required for cash credit.
• Generally, the security of tangible assets like goods, finished stock is required to be kept.
• The interest is charged only on the actual amount utilized by the customer.
• Cash credit arrangement is for a longer period as compared to overdraft.
• This system of lending is prevalent in India only.
• Thus, in cash credit, the customer’s account is credited by a bank with the sanctioned amount.

Question 2.
Bank correspondence should be brief and to the point.
Answer:

• The bank is a financial institution.
• A company secretary has to conduct bank correspondence as per the instruction of the Board.
• Bank correspondence needs careful and cautious drafting.
• The company secretary has to use his knowledge, skill, and experience while conducting bank correspondence,
• The company secretary has to conduct bank correspondence promptly and accurately.
• Mistakes and delays in bank correspondence may bring financial loss to the company.
• Bank correspondence should be always brief, compact, and precise.
• Unnecessary or irrelevant information should be avoided in bank correspondence.
• Thus, bank correspondence should be brief and to the point.

Question 3.
No interest is paid by the bank on the current account.
Answer:

• The Current account is normally opened by businessmen, firms, or companies.
• A current account is a running account and in practice it never becomes time-barred.
• This account is opened with a minimum deposit.
• There is no limit on the amount or number of withdrawals.
• Interest is not payable on this account.
• Overdraft facility is given only to current depositors after following the prescribed bank procedure.
• Hence, interest is paid only in the case of recurring, fixed, and saving accounts and not in the case of the current account.
• Thus, no interest is paid by the bank on the current account.