case study questions bst class 11

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Class 11 Business Studies Case Study Questions

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CBSE Class 11 Business Studies Case Study Questions are available on myCBSEguide App . You can also download them from our student dashboard .

For students appearing for grade 11 CBSE exams from the Commerce stream, Business Studies is a fundamental subject. Business Studies is considered to be quite interesting as well as an occupying subject as compared to all other core subjects of the CBSE class 11 commerce stream. To ace this CBSE exam, students are not only required to work hard but they ought to learn to do smart work too.

Among all the other core subjects of the Commerce stream i.e accountancy, economics and business studies, Business Studies is the one that is purely theoretical. It is termed to be comparatively easier and more scoring than the other mandatory subjects of the commerce stream. Many students who opt for the commerce stream after their 10-grade exams desire to learn in-depth about the business organizations and their work, for them the subject is of utmost importance. Business Studies is an essential component of the class 11 commerce stream curriculum.

In order to ace the subject the student needs to have conceptual clarity. CBSE has designed the syllabus for class 11 Business Studies so as to provide students with a basic understanding of the various principles prevalent in the Business organizations as well as their interaction with their corresponding environment.

Case Study Questions in class 11 (Business Studies)

Case-based questions have always been an integral part of the Business Studies question paper for many years in the past. The case studies have always been considered to be challenging for the students, for such questions demand the application of their knowledge of the fundamental business concepts and principles. Last year i.e- 2021 CBSE introduced a few changes in the Business Studies question paper pattern to enhance and develop analytical and reasoning skills among students.

It was decided that the questions would be based on real-life scenarios encountered by the students.CBSE not only changed the way case-based questions were formulated but also incremented their weightage in the Business Studies question paper. The sole purpose of increasing the weightage of case-based questions in the class 11 curriculum by CBSE was to drift from rote learning to competency and situation-based learning.

What is a case study question? (Business Studies)

In Business Studies, a case study is more like a real-world test of how the implementation works. It is majorly a report of an organization’s implementation of anything, such as a practice,a product, a system, or a service. The questions would be based on the NCERT textbook for class 11 Business Studies. Case-based questions will definitely carry a substantial weightage in the class 11 Business Studies question paper. questions.

A hypothetical text will be provided on the basis of which the student is expected to solve the given case-based question asked in the Business Studies class 11 exam. Initially, the newly introduced case-based questions appeared to be confusing for both the students and the teachers. Perhaps, they were reluctant to experiment with something new but now a lot more clarity is there that has made the question paper quite student-friendly.

Case study questions could be based on any chapter or concept present in the NCERT textbook. Thus, it is expected from the students to thoroughly revise and memorize the key business fundamentals.

Business Studies syllabus of class 11 CBSE

The entire Business Studies course is divided into 2 parts:

Part A, Foundation of Business
Part B, Finance and Trade

The class 11 Business Studies exam is for a total of 100 marks, 80 marks are for the theory and the remaining 20 for the project. Most of the questions are based on the exercises from the NCERT textbook. It is recommended to rigorously go through the contents of the book. A single textbook has been published by NCERT for Class 11 Business studies. There are a total of 10 chapters in this book divided into 2 parts.

CBSE Class – 11

Business Studies (Code No. 054)

Theory: 80 Marks Time: 3 Hours Project: 20 Marks

Case Study Passage (Business Studies class)

As part of these questions, the students would be provided with a hypothetical situation or text, based on which analytical questions will have to be answered by them. It is a must for the students to read the passage in depth before attempting the questions. In the coming examination cycle (2022-23), case-based questions have a weightage of around 30%. These questions can be based on each chapter in the NCERT book for Business Studies, grade 11.

Students must prepare well for the case-based questions before appearing for their Business Studies exam as these questions demand complete knowledge of the various concepts in their syllabus. CBSE plans to increase the weightage of such questions in the upcoming years.

Sample case-based Questions in Business Studies

Business Studies as a subject provides a way of perceiving and interacting with the business ecosystem. It is a core subject of the commerce stream that is purely theoretical and relevantly easier than the other compulsory subjects of the stream. Class 11 Business Studies syllabus is closely related to trade and commerce. The subject cannot be ignored as it is the foundation of many concepts and theories which are studied at an advanced level in class 12.

The case-based questions asked in the CBSE Business Studies question paper for class 11 are of two types:

As per the latest circular issued by CBSE on Assessment and Evaluation practices of the board for the session 2022-23, CBSE has clearly mentioned that competency-based questions including case studies will be different from subjective questions.

The questions can also be categorized on their difficulty level:

Direct: such questions can be easily solved. Their answer is visible in the given passage itself.
Indirect/ Analytical: such questions are confusing and tricky. These can be solved by the application of the theory or principle that is highlighted in the provided text.

How To Prepare For Case-based Questions? (Business Studies grade 11)

Students need to prepare well for the case-based questions before appearing for their class 11 Business Studies exam. Here are some tips which will help the student to solve the case-based questions at ease:

Read the provided text carefully
Try to comprehend the situation and focus on the question asked
Analyze and carefully answer the question asked
In general, the passage given would be lengthy in Business Studies case-based questions but their solutions are comparatively short and simple
One can significantly save time if they follow a reversal pattern, that is going through the questions before reading the comprehensive case study passage.
Answer in a concise manner
One should concentrate on solidifying key fundamental principles/theories
Go through the NCERT textbook in depth. The language used is crisp and simple.
While providing solutions to the case-based question, pick the keyword/keyline based on which you are driving insights.

In order to excel in the Business Studies class 11 exam, one needs to ignore the shortcut techniques and get to read the NCERT textbook rigorously. Case studies can be easily solved if your key fundamentals are strong and clear. The best part of having these questions is that the asked question itself projects a hint of its answer. These simple points if kept in mind will definitely help the students to fetch good marks in case study questions, class 11 Business Studies.

Case study question examples in Business Studies

Here a re some given case study questions for CBSE class 11 Business Studies. If you wish to get more case study questions and other study material, download the myCBSEguide app now. You can also access it through our student dashboard.

Business Studies Case Study 1

Read the hypothetical text given and answer the following questions:

Manish, Rahul and Madhav live in the same locality. They used to meet and discuss their ideas. After discussing the recent fire breakout in their area, they decided to take fire insurance for their house or work area. Manish gets his house insured against fire for ₹1 lakh and during the policy period, his house gets damaged due to fire and the actual loss amounts to ₹2.5 lakh. The insurance company acquired the burning material and approved his claim. Rahul gets his godown insured against fire for ₹1 lakh but does not take enough precautions to minimize the chances of fire like installing fire extinguishers in the factory. During the policy, a fire takes place in his godown and he does not take any preventive steps like throwing water and calling the employees from the fire fighting department to control the fire. He suffered a loss of ₹1,20,000. Madhav took a fire insurance policy of ₹20 lakh for his factory at an annual payment of ₹24,000. In order to reduce the annual premium, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make payment for the claim as it became aware of the highly explosive chemicals.

How much can Manish claim from the insurance company?

None of the above

How much compensation can Rahul get from the insurance company?

Which principle is violated in the case of Rahul?

Insurable Interest
Utmost Good Faith

How much amount is the insurance company liable to pay to Madhav if he files a case against it?

Insufficient information

Which principle of Insurance is violated by Madhav?

Insurable interest
Subrogation
Proximate Cause

The insurance company acquired the burnt material and approved his claim. Which principle of Insurance is highlighted in the given statement.

(a) Mitigation
(a) Utmost Good Faith
(d) Subrogation

Business Studies Case Study 2

Sarthak Electronics Ltd. has a loss of Rs 15,00,000 to pay. They are short of funds so they are trying to find means to arrange funds. Their manager suggested a claim from the insurance company against stock lost due to fire in the warehouse. He actually meant that they can put their warehouse on fire and claim from insurance companies against stock insured. They will use the claim money to pay the loan.

Will the company receive a claim if the surveyor from the insurance company comes to know the real cause of fire?
Write any two Values which the company ignores while planning to arrange money from false claims.
State any three elements of fire insurance

Business Studies Case Study 3

OLX and qickr are examples of well-known websites used to conduct business. Tarasha’s sofa set got spoiled in the rain. Her friend suggested that she should change the fabric so that it looks new and put it for sale on Olx. Tarasha followed her friend’s advice and got her sofa repaired so that it looked better and uploaded nicely clicked pictures on the website without disclosing the fact that it was damaged from the inside. She found a buyer and sold it for Rs 10,000. After five days the buyer found the real state of the sofa set and called Tarasha but she did not answer any of the calls.

identify the type of business highlighted in the above case.
Identify any two values which are overlooked by Tarasha.
Explain any two benefits and limitations of e-business.

Advantages of case study questions in Business Studies

Class 11 Business Studies syllabus is not very vast but has to be focussed upon as it forms the base for your 12th grade Business Studies syllabus. Students are supposed to prepare themselves thoroughly from the NCERT textbook. The Case-based questions prominently focus on the real and current scenarios of the Business world. Approximately 30% of the question paper will comprise case study questions that demand high-order thinking and reasoning skills from the students. The students ought to practice class 11 Business Studies case-based questions from the various options available to them, so as to excel in the subject.

Enhance the qualitative and quantitative analysis skills of students
Provides an in-depth understanding of the key Business theories/concepts
Inculcate intellectual capabilities in students
Help students retain knowledge for a longer period of time
The questions would help to discard the concept of rote learning
Case studies promote and strengthen practical learning.

“Failure is success if you learn from it”

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Q1. Mr. Bhuvan is a Chartered Accountant in a Multinational Company. He gets rs 85,000 per month as his salary. On weekends, Mr. Bhuvan goes to nearby village and teaches some slum children, he does not charge anything from them, he does it out of sympathy and children. This gives him mental and psychological satisfaction. concern for poor.

(a) Working as CA in a MNC refers to which type of human activity. (b) Teaching students in slum is which type of human activity. (c) Identify the values followed by Bhuvan.

Ans. (a) Economic

(b) Non-Economic

(ii) Value of helping poor.

Q. 2. Rajiv wants to start a whole sale business of readymade garments, but he is hesitating as it involves various problems such as customers for moving goods from place of production to market, informing customers about new designs and varieties added every season, threat of risk loss by fire or accident, storing the excess stock of goods, etc. He approaches his friend Sandeep who explained him about some branches of commerce, which can help Rajiv to overcome his hesitation.

(a) State the type of business Rajiv is planning to start.

(b) State which dimension of business can help Rajiv to overcome these hindrances. (c) Specify different types of Auxiliaries to trade which can help Rajiv to overcome his problems. Quote the line for each type from above Para.

Ans. (a) Trade - Whole sale Trade.

(b) Commerce

(iii) "Informing customers"

(iv) "Threat of Risk" Transportation - Advertisement Insurance -

Q. 3. Indu bought a readymade dress for ₹ 5000. Her friend liked the design of dress very much, so Indu sold the same dress to her friend for 5500 and made a profit of 500. After completing her studies Indu opened a shop of selling readymade dresses for girls.

(a) Can transaction between Indu and her friend be termed as business?

(b)State the features related to 'a'.

Ans.(a) No.

(b) "Regular Basis".

Q. 4. Name the following:

(a) The economic activity showing a risk element and carried on profit.

(b) The trade in which two countries are involved.

(d) The industry which involves breeding and reproduction of plants and animals.

(e) The branch of commerce which remove hindrance of place.

Ans. (a) Business

(b) External Trade

(d) Genetic Industry

(e) Transportation.

Q. 5. An organisation planned to use CFL and LED which consume less electricity to reduce operational cost. They also give preference to labour intensive technique of production. What values company is implementing?

Ans.1. Value of saving electricity.

2. Value of creating employment opportunities.

3. Value of reduction in cost.

Q. 6. An organisation arranges recreational activities for its employees to refresh them and also send them for training to update their knowledge. What values are followed by the company? .

Ans. 1. Value of meeting personal objectives.

2. Value of motivating employees.

3. Values of giving job satisfaction to employees.

Q. 7. A Chartered Accountant advised his elient how to convert black money into white money and he also guided him how to save income tax by hiding his income. Is his act justified.

Ans. No conduct of CA and businessmen are not justified:

(a) CA is violating his code of conduct by acting unethically.

(b) Cheating government by paying less income.

(d) The act is not even unethical but illegal also.

Q. 8. A Tool and Equipment Manufacturing Company gave bribe to purchase manager of a factory to buy tools of low quality and which are not having safety norms. The purchase manager accepted the offer and gave a big order. What values are violated?

Ans. 1. Value of playing with the health of workers.

2. Not fulfilling safety norms competition. 3. Offering bribe is an unlawful act.

Q.9. A unit set up by Tata in rural area and the company plan to develop roads, parks of that area they also started a school for local children of that area. What values are followed?

Ans. 1. Fulfilling social objectives.

2. Increasing literacy rate.

3. Improving standard of living.

QB365 provides a detailed and simple solution for every Possible Case Study Questions in Class 11 Business Studies Subject - Emerging Modes of Business, CBSE. It will help Students to get more practice questions, Students can Practice these question papers in addition to score best marks.

QB365 - Question Bank Software

Emerging modes of business case study questions with answer key.

11th Standard CBSE

Final Semester - June 2015

Business Studies

Demonenonetization has led to a boom in e-business. It has proved to be a boon for e-business. In this cashless economy, people have started relying on digital cash. Usage of debit cards, credit cards has increased a great deal. People are ordering more and more goods using e-shopping. Amazon, Flipkart, Paytm have become a way of life. Small shopkeepers, street hawkers, and peddlars are also accepting payments through e-cash. India is becoming digital economy. (a) What are the factors that have led to popularization of e-business with demonetization? (b) How are payments through digital cash useful for the business world?

*****************************************

Emerging modes of business case study questions with answer key answer keys.

(a) (i) Increasing use of net (ii) Non-cash mode of payment (b) (i) It is easy to maintain records (ii) It is easy to expend business at larger scale.

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Commerce Important Questions
Class 11 Business Studies
Chapter 1 Business, Trade and Commerce

Important Questions for CBSE Class 11 Business Studies Chapter 1

Important Questions for CBSE Class 11 Business Studies Chapter 1 Business, Trade and Commerce which is outlined by expert Business Studies teachers from the latest version of CBSE (NCERT) books.

CBSE Class 11 Business Studies Chapter -1 Important Questions

What are the different types of economic activities?

Answer : There are various types of economic activities. Namely,

Name one economic pursuit, in which expertise is required.

Answer : Profession is an economic pursuit, in which expertise is required.

Name the industries that furnish support to other fellow industries.

Answer : Tertiary industries are involved in furnishing support to all the primary and secondary industries.

Can fishing be contemplated as a primary industry?

Answer : Yes.

Categorise the occupation in which the employees work for others and get paid in return.

None of the above

Answer : Employment

Sort the following into a business concern, employment and profession.

Farmer – Business
Clerk – Employment
Lawyer – Profession
Doctor – Profession

What is the reward that a businessman earns for bearing risk?

Answer : When a businessman bears the risk, the reward that he’ll get is – earning the profit.

What is the difference between Business and Profession?

Mention the risks that are involved in the business.

Answer : Every aspect has its own risk factors. So does business has too. Namely,

Business risks arise due to a few uncertain and unexpected situations
It is a quintessential part of any business
However, profit is the reward for bearing the risks

Question 10

What are the objectives of the business?

Answer : Objectives of business are mentioned below:

Innovation : Every business concern must come up with novice ideas, inventions and implement them; which are helpful for survival and growth.
Productivity : Productivity is certainly determined by contrasting the value of the output with the value of the input.
Earning Profits : Any business entity that is operating must earn a reasonable amount of profits in order to sustain survival and growth.

Question 11

What is Commerce and its significance in modern life?

Answer : Commerce is the control of business among economic agents. Usually, it refers to the exchange of commodities, services or items of value, among companies or entities.

The significance of Commerce are:

Commerce acts as a catalyst between the manufacturers and customers.
It establishes employment opportunities.
It encourages trade in the global level.
Assists in the growth of developing the industries.
Helps during exigencies like the natural calamities – earthquake, flood, drought etc.

Question 12

Under which type of industry do oil refinery and sugar mills are classified?

Answer : Secondary industry

Question 13

What are the differences between primary and secondary industry?

Question 14

How does a trader get rid of the hindrance of a person?

Getting rid of hindrance of a person by making the commodities obtainable to the customers from the manufacturers via trade.
Transportation removes hindrance of a location by transporting the commodities from the place of manufacturing to the market place for selling purpose.
However, insurance removes the hindrance of perils of loss or damage of commodities due to dire, theft and accidents etc.,
Advertising removes the hindrance of the data by keeping the customers informed regarding the commodities and services that are obtainable in the market place.

Question 15

Insurance is known as the tertiary industry. Explain.

Answer : Insurance is the support service to both the primary and secondary industries.

The tertiary industry is the section of the economy that contributes services to its customers, including a broad array of businesses such as schools, financial institutions and restaurants. It is also called as the tertiary sector or service industry/sector.

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Business Studies Class 11 Chapter 2 Important Questions and Answers

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Business Studies is a subject taught in a Commerce student’s syllabus beginning in Class 11 and continuing through Class 12. Students will master an understanding of the area of management and other business disciplines if they study this subject. Forms of Business Organisation is the second chapter of the Class 11 syllabus, and it teaches about different forms of Business. This chapter covers concepts such as various forms of business organisation, features, merits, and demerits, and factors determining the appropriate form of business organisation. It carries significant weightage in the Business Studies syllabus. Students can easily access all this and more on the Extramarks website.

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Students must read through all the chapters to score well in Business Studies. Extramarks understands the importance of solving questions. As a result, we’ve gathered them from various sources, such as the NCERT Textbook, NCERT Exemplar, other reference books, past exam papers, and so on. Our Business Studies experts have curated step-by-step solutions to help students better comprehend the topics. Students can register with Extramarks and access Important Questions Class 11 Business Studies Chapter 2.

Apart from Chapter 2 Class 11 Business Studies Important Questions, there is so much that the Extramarks website has to offer. Students can easily find materials like NCERT Solutions, CBSE revision notes , past year question papers, NCERT books, and more on the Extramarks website.

Get Access to CBSE Class 11 Business Studies Important Questions 2022-23 with Solutions

A team of Extramarks specialists have developed an entire list of Business Studies Class 11 Chapter 2 Important Questions taking cues from numerous sources. The questions comprise a wide variety of topics, including the different forms of business organisation, features, merits, and demerits of business organisation, factors determining the appropriate form of business organisation, and so on. These questions and their solutions help students better comprehend Forms of Business Organisations.

Mentioned below are a few Important Questions from Class 11 Business Studies Chapter 2 and their solutions:

Q1. What are the important privileges available to a private company?

Answer: When a business is formed as a private corporation, it has several advantages and exemptions that are not accessible to public companies. Some of the main benefits that a private corporation has are as follows:

A private business can be formed with as few as two members, but a public corporation requires seven.
In private business the public is not asked to subscribe to company’s shares and hence a prospectus is unnecessary.
Shares can be distributed without a minimum subscription requirement.
A private company can start operating as soon as it receives its establishment certificate. On the other hand, the public company must wait until it gets the starting certificate before it may begin operations.
A private company only needs two directors, but a public company requires at least three.
A member index is not necessary for a private organisation but is required for a public corporation.

Q2. With a notable example, explain mutual agency in partnership.

Answer: Mutual agency refers to the legal connection between participants in a partnership who have authorization powers and the authority to engage the collaboration in business contracts. In another way, each partnership member has the authority to make business choices that commit or bind the entire partnership to a commercial contract with a third party or entity. For example, even if the partnership agreement prohibits it, a grocery store partner who acquires a delivery truck in the partnership’s name enters a legally enforceable transaction. On the other hand, such behaviour would be unlawful if a law firm partner purchased a snowmobile for the firm.

Q3. What is meant by “partner by estoppel”? Explain.

Answer: A person who shows others that they are a company partner via their actions, behaviour, or statements, is referred to as Partner by estoppel. Such a person is not a partner, and they are not responsible for providing any cash to the company, nor are they accountable for any portion of the company’s profit or loss. The same individual, however, may be held accountable for the firm’s debts. Hence, as a result, if the Business has adequate assets or finances, debt repayment can be obtained by selling off the partner’s private assets via estoppel.

Q4. What exactly is HUF?

Answer: Although the Income Tax Act does not define the Hindu Undivided Family (HUF), it is recognised under Hindu law. Unmarried daughters are included in the HUF, as are all those who are lineally settled from the same ancestor. A person does not create HUF but by a family’s standing, i.e., it is created automatically in any Hindu household.

Q5. Why do some consider partnership a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Answer: A partnership is viewed as a relatively unattractive sort of company ownership due to the inherent limitations that come with it. These limits include infinite responsibility, limited resources, the possibility of conflict, and a lack of consistency.

Ease of closure and creation: A partnership business can be established rapidly by agreement amongst potential partners. A company doesn’t need to be registered.
Balance decision-making: The partners might manage various responsibilities depending on their expertise. As a result, the decision-making process in a partnership business is more balanced than in any other kind of corporate ownership.
A large amount of funds: Each partner in a partnership provides a certain amount of money. Consequently, compared to a single owner, it is feasible to collect a more considerable sum of cash and carry out additional activities as needed.
Confidentiality: There is no legal requirement for a partnership business to publish its financial accounts or submit reports. As a result, it may maintain secrecy regarding its operations.
Sharing the risk: The risks that come with running a partnership business are shared by all partners. As a result, individual partners experience less worry, tension, and stress.

Limitations of business partnership:

Restricted Resources: Capital investment contributions are frequently insufficient to sustain large-scale commercial activity due to the limited number of partners. As a result, partnership firms struggle to expand beyond a particular scale.
Conflicts of Interest: The decision-making authority in a partnership business is distributed among the partners. This is also dependent on their level of competence, foresight, and ability.
Unlimited liability: Partners are accountable for repaying debts from their assets if the Business’s assets are insufficient to fulfil its obligations.
Lack of continuity: When one of the partners dies, retires, becomes bankrupt, or becomes mad, the partnership comes to an end. On the other side, the surviving partners might enter into a new agreement and continue to run the business.

Q6. In what form of Business do individuals associate freely for profit, with capital dividends into transferable shares, and ownership of which is a requirement of membership? Explain in terms of characteristics.

Answer. A joint-stock company is a non-profit organisation formed by a group of people to do profitable economic activities. It has a legal status distinct from its members and a capital structure separated into transferable shares. A corporation is an independent legal entity with its legal identity, perpetual succession, and a common seal. In a corporation, the shareholders are the company’s owners, and the Board of Directors, which the shareholders elect, is the company’s central management body.

The company’s capital is divided into smaller components known as “shares,” which can be freely transferred from one shareholder to the next (except in a private company). A joint-stock firm has the following characteristics:

A corporation is a made-up entity. It is a legal entity that exists without the participation of its members.
The legal personality of a corporation is established. The law does not regard the Business and its owners as the same.
Starting a business is a time-consuming, costly, and challenging endeavour. Therefore, incorporation is required for all enterprises.
It will only be deactivated after completing a specialised operation known as winding up. Members may come and go, but the firm does not cease to exist.
A company’s common seal may or may not exist.
All shareholders share the risk of a company’s losses.

Q7. Even though there are limitations of size and resources, several people continue to prefer sole proprietorship compared to other forms of organisation? Why?

Answer: Due to the numerous sheer benefits, it provides despite the size and resource limits. The sole proprietorship is the company’s form of choice. The following are some of the advantages:

A single proprietorship firm is simple to set up since there are few legal requirements. Similarly, closing a firm is a painless process.
The sole owner controls the firm as the only decision-maker, allowing for swift choices.
The sole proprietor enjoys all the Business’s gains while bearing all its misfortunes.
Because the lone proprietor is the only person in charge of the business, it is highly flexible.

Q8. Which business model is best for the following businesses, and why?

Coaching centre for the students of science subject
A beauty salon
A shopping centre
Little repair shops

Answer. The suitable business model for the businesses as mentioned earlier would be:

Coaching center for the students of science subject: Collaboration with a science coaching facility. It’s simple to set up and run, and it’s inexpensive. Partners report their share of profit or loss on their tax returns.
A beauty salon: A salon can be run as a sole proprietorship. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.
A shopping center: shopping malls are JSCs (joint-stock corporations). Personal responsibility for commercial debts is restricted for business owners.
Hotel: In the hotel industry, there are joint-stock companies. Small businesses are drawn to LLCs and corporations because they minimize their owners’ liability for corporate debts and court judgments against the company. Another factor to consider is income taxes: you may set up a limited liability company (LLC) or a corporation to benefit from reduced tax rates. Furthermore, an LLC or company may be able to deduct the cost of a range of fringe benefits passed on to its employees (including the owners) as a business expense.
A little repair shop: A sole proprietorship is appropriate for a small repair shop. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.
Restaurant: Ownership of a restaurant as a sole proprietor. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.

Q9. How does a cooperative society exemplify democracy and secularism? Explain.

Answer: A cooperative society is run by persons chosen by all members through a democratic process. Each member has an equal right to vote, regardless of the amount of money they have invested. As a result, it functions as a democracy in which all members are treated equally and have similar rights. Members are not discriminated against because of their caste, religion, or gender. People of the management committee can select the members they believe best represent them. As a result, it denotes secularism.

Q10. What does it mean to have unlimited liability?

Answer: General partners and sole proprietors with unlimited liability are jointly and severally liable for the company’s debts and obligations. However, this obligation is not limited and can be paid off by seizing the owners’ assets, distinguishing it from limited liability partnerships.

Q11. Compare the status of a minor in a Hindu joint family business with that in a partnership firm.

Answer: A person under 18 is considered a minor in Indian law. By being born into a Joint Hindu household, a minor becomes a member of the family company. Like other family members, the minor has equal ownership and rights to the property and company. However, his obligation is limited to his part of the property.

As per the Indian Partnership Act of 1932, a minor cannot become a partner in a partnership business. However, if all partners agree, a minor can be initiated and partake in a firm’s profits. Still, a minor does not need to contribute capital or carry any obligation if the Business supports the firm. Therefore, minors aren’t regarded as partners. However, once they reach the age of 18, they have the option of continuing the relationship or terminating it.

Q12. Who has equal ownership rights to an ancestor’s property? Emphasise its most important aspects

Answer: A Joint Hindu Family is a form of business owned and operated by members of the Hindu Undivided Family (HUF). The company’s membership is based on birth in a specific family, and three generations of the same family can be members. The family’s business is run by the eldest member of the family, known as Karta. Joint Hindu Family Business members with equal ownership rights over an ancestor’s property are known as coparceners.

A combined Hindu family company has the following characteristics:

Because membership is by birth, there is no requirement for an agreement.
Except for the Karta, all members are only responsible for their portion of the Business’s co-coparcenary property. The Karta’s responsibility is boundless.
Karta oversees the family company, and his choices bind everyone.
After Karta’s death, the business is carried on by the next eldest son, Karta.

Q13. Why is it important to choose an appropriate form of organisation? Discuss the factors that determine the choice of form of organisation.

Answer: Choosing an appropriate business organisation is necessary since it is one of the most important decisions to make when beginning a business or expanding an existing one. A business can be owned and run in several ways. It’s challenging to modify a company model after it’s been decided. As a result, the type of business company chosen should be done with care and consideration.

The following factors influence organisational structure selection:

Control: With a sole proprietorship, you have complete control over your operations and decision-making authority. If the owners, on the other hand, want to share ownership to make better judgments, they can form a partnership or a corporation.
Nature of Business: Businesses that involve direct personal connection with customers, such as beauty salons or grocery stores, are better suited to a single proprietorship. The corporate kind of structure benefits large manufacturing units. The partnership structure is significantly more served in the case of professional services.
Management Skills: Being informed in all firm parts is difficult for a sole owner. Members split their labour in other organisations, such as partnerships and businesses, allowing management to specialise in specific areas and make better judgments.
Capital Requirements: The corporation form is suitable for large-scale activity since it may generate a large amount of money by issuing shares. There are two options for medium and small firms: partnership or sole proprietorship. In the framework of a company, expansion capital requirements may be managed more easily.
Continuity: The continuity of sole proprietorship and partnership enterprises can be disrupted by events such as the owners’ death, insolvency, or insanity. In organisations like joint Hindu family companies, cooperative societies, and corporations, such factors, on the other hand, have minimal influence on the business’s survival.
Liability: The liability of the owners/partners of a sole proprietorship or partnership is unlimited. This might lead to the owners’ assets being used to repay the debt.
Cost and Convenience of Starting a Company: A sole proprietorship is straightforward to start in terms of initial business costs and legal procedures, but because of its more minor activities, a partnership has the advantage of less legal formalities and lower prices. Registration is necessary in the case of cooperative societies and companies. The process of founding a company takes time and money.

Q14. What are the reasons for the formation of cooperative forms of organisation? Describe the different sorts of cooperative societies.

Answer. A cooperative society is a collection of individuals who get together voluntarily for the common welfare of its members. They are motivated by a desire to defend their economic interests from potential exploitation by intermediaries looking to increase their profits. The process of founding a cooperative organisation is simple, and all that is necessary is the agreement of at least ten adults. A society’s capital is raised by selling shares to its members. An organisation acquires a distinct legal character when it is registered.

One sort of cooperative society is the consumer cooperative society.

It was designed to protect consumers’ interests.
To improve operational savings, society strives to eliminate intermediaries. Instead, it purchases things in bulk from wholesalers and resells them to its members.
Profits are dispersed depending on capital contributions to the organisation or purchases made by individual members.

Producer Cooperative Societies are a specific sort of producer cooperative society.

It was established to protect the interests of small farmers.
Members are producers looking for inputs to create commodities to fulfil customer demands.
Profits are distributed according to their contributions to the society’s overall pool of products produced or sold.

Cooperative Societies Marketing-this organisation was established to help small manufacturers market their products.

Producers that demand fair pricing for their commodities are among the group’s members.
It combines individual members’ production and marketing activities such as shipping, storage, and packaging to sell the commodities for the best feasible price. Profits are dispersed according to the amount of money each member puts in.

Farmers’ Cooperative Societies were formed to protect farmers’ interests by providing high-quality inputs at a reasonable price.

Members are farmers who want to collaborate on farming projects.
The idea is to increase productivity while reaping the benefits of large-scale farming. Improving farmer output and returns while addressing challenges associated with farming on fragmented land holdings.

Cooperative Financing Societies were established to give members timely credit at reasonable rates.

Members are individuals seeking financial assistance in the form of loans.
The purpose of such groups is to protect members from being taken advantage of by lenders who demand high-interest rates on loans.

A cooperative housing organisation is a sort of Cooperative Housing Societies.

It was established to assist low-income people in constructing homes at a reasonable cost.
These societies are people looking for a cheaper location to reside in.
The purpose is to alleviate members’ housing issues by constructing homes and allowing them to pay in instalments.

Q15. If registration is optional, why do partnership firms willingly go through this legal formality and register themselves? Explain.

Answer: Although partnership business registration is optional, many firms choose to do so. This is owing to the severe legal consequences of failing to register. Listed below are a few examples:

The partners of a non-registered business cannot sue a third party, but the non-registration of a partnership firm does not prevent other firms from hiring it.
The company is forbidden from filing a lawsuit against any of its partners. Similarly, a partner in a non-registered firm cannot sue their co-partners or the company.
Claims against a third party by a non-registered partnership entity cannot be enforced in court. As a result, partnerships are established to overcome these disadvantages.

Forms of Business Organisation Class 11 Important Questions – Key Topics Covered

Class 11 Business Studies Chapter 2 Important Questions covers the following key topics:

Forms of business organizations

There are several different types of business organizations from which to choose:

Sole proprietorship

Joint Hindu family business

Partnership
Cooperative societies

Joint-stock company

Sole Proprietorship

It is a type of Business owned, managed, and controlled by a single person who carries all the risks and reaps all the rewards.

It can be formed and disbanded without the need for any legal requirements.
In this business organisation, the lone proprietor’s responsibility is unrestricted.
As the single risk carrier and profit recipient, he bears all the risks and reaps all the rewards.
There is no distinction between the owner and the Business in the eyes of the law.
All choices must be made by the owner, which necessitates prompt decision-making.
As a lone proprietor, it is simple to keep company secrets.
Because there is no one to share gains with, the owner enjoys all the profits.
There are no legal requirements for establishing and closing a business, making creating and completing one simple.

Limitations:

The owner’s savings or money borrowed from friends and family might be used to support the Business.
A business’s life expectancy is limited as it is dependent on the owner’s health and mental state.
His assets are at stake if the firm fails to satisfy its debts.
A single individual may not be able to oversee all of the functions.

It is a type of business that is owned and managed by members of an undivided Hindu family, with three generations of family members potentially participating.

Hindu Undivided Families are created when at least two family members have ancestral property. The Hindu Succession Act of 1956 governs it.
Except for the Karta, all family members have limited responsibility for their part of the company property.
Karta oversees all actions inside the corporate organisation.
It can be stopped if all members of the family agree to it.
Organisation membership is based on birth.
With ‘Karta,’ you have complete control over your firm and can make better decisions.
If ‘Karta’ dies, the Business continues until all members desire to continue, and then control is given to the next eldest member.
Family members are only liable for their share of the business party.
Because family members feel connected and loyal, they work together to achieve a common goal of progress.
Businesses might be supported primarily via inheritance, restricting financial resources.
Karta’s personal property is at risk due to his unlimited liability.
Differences of opinion among members and the ‘Karta’ might lead to conflict.
Karta’s managerial abilities are limited, and he may not be familiar with all of the Business’s functions.

Partnership:

According to the Partnership Act of 1932, a partnership is a relationship between people who have agreed to share the earnings of a firm run by all or by one acting on behalf of all of them.

The partnership Act of 1932 governs the establishment of the Business.
The liability of all company partners is unlimited.
All the partners share the risk in the Business.
All decisions are made with the approval of all partners, and each partner bears responsibility for the company’s day-to-day operations.
Because registration is optional, a business can be formed and ended with the approval of all partners.
As partners take on tasks according to their competence, all choices are made by consensual partners.
All partners contribute money, broadening the scope of large-scale company operations.
There is no need to report financial results; therefore, maintaining corporate secrets is simple.
Their complete responsibility covers each partner’s personal property.
All parties may have differing viewpoints, which can lead to conflict.
Any disagreement between partners or the death of a partner might put the company out of operation.
Due to a lack of financial disclosures, an outsider can’t determine the actual economic situation.

Cooperative society

An organisation of volunteers working for a shared goal to protect members’ economic and social interests. The Cooperative Societies Act of 1912 requires it to be registered.

Any individual with a shared interest, regardless of caste, gender, or religion, is free to join or leave a cooperative organisation at any time.
A cooperative society has a different identity from its members, and the registration of such a group is required.
The goal of forming a society is to provide mutual assistance to team members.
Each member has the same right to vote and elect managing committee members.
Cooperative societies maintain their existence in the face of death, bankruptcy, or insanity among their members.
Members of society work willingly, which helps to save expenses.
The only funding source is the member’s capital contribution, and the low dividend discourages members from contributing money to the organisation.
Volunteer members may lack the requisite competence and skills, resulting in inefficient operations and management.
It’s challenging to preserve secrets since members provide all information about the society’s operations at the meeting.

“A corporation is an artificial person with a separate legal existence, eternal succession, and a common seal,” according to the Companies Act of 2013.

A corporation is a legal entity with legal standing but does not act as humans do. The board of directors conducts all corporate actions in the corporation’s name.
Companies are founded following the legal requirements outlined in the Companies Act of 2013.
A corporation is formed by law and may only be disbanded by legislation. Therefore, the company’s existence is unaffected by the status of its members.
The responsibility of shareholders is limited to their investment in the firm. Therefore, there is no chance of personal assets being lost.
The firm’s existence is unaffected by its stockholders’ status; it continues to exist.
Companies can borrow vast sums of money from financial institutions or banks and solicit cash from the public.
The formation of a corporation necessitates the completion of several documents and legal requirements, making the process lengthy and complicated.
There is no confidentiality or secrecy because all financial information is given to the general public.
Decision-making must adhere to a hierarchy, leading to delays in making judgments and implementing actions.

Choice of the Type of Business organisation

Nature of Business
Cost of setting up the organisation
Capital consideration
Degree of control
Management ability

The briefly described topics in the above sections are covered in the Important Questions Class 11 Business Studies Chapter 2.

Benefits of Solving Class 11 Business Studies Chapter 2 Important Questions

Business Studies is one subject that requires a lot of reading and revisions. This subject is introduced in Class 11, and it prepares the base for Class 12 board examinations. Therefore, students are advised to access Important Questions of Business Studies Class 11 Chapter 2 . Students will get a sense of confidence by solving essential questions from all the chapters and overlooking their solutions.

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Q.1 The North Coast Cooperative that was Established in 1973 was the large consumer cooperative that offered a full service grocery store and deli. Director started to deal with bulk purchasing and packaging issues. Many people in the college-campus area wanted a supply of natural food products, which didnt exist. They wanted a cheaper, more reliable supply if they purchased togetherin bulk.

From the start, the co-op tried to provide a market for local produce. Initially, the farmers provided a fairly limited variety, mostly tomatoes, sweet corn, zucchini and other common garden vegetables. The co-op uses purchasing contracts, which act as a type of insurance to motivate farmers to produce new and different varieties

Explain the type of cooperative society that is refered to here. Also give three points to support the formation of such a form of business enterprise.

Marks: 1 Ans

This is a consumer cooperative society. These are formed to protect the interests of consumers. Members are consumers who want to get good quality products at reasonable prices. The society aims at eliminating middlemen for economy in operations.

Society purchases goods in bulk directly from the wholesalers and sells goods to the members directly.

Profits are distributed on the basis of either their capital contributions to the society or purchases made by individual members.

Merits of cooperative form of organisation are:

(i) Equal voting status: There is a principle of â€˜one man one voteâ€™ i.e., irrespective of the capital contribution by a member, each member is entitled to equal voting rights.

(ii) Limited liability: As the liability of members of a cooperative society is limited to the extent of their capital contribution, their personal assets of the members are safe from being used to repay business debts.

(iii) Stability: Death, bankruptcy or insanity of the members do not affect continuity of a cooperative Society i.e., it remains unaffected by any change in the membership.

(iv) Economy in operations: Focus of society is on elimination of middlemen which helps in reducing costs.

(v) Government support: Cooperative society exemplifies the idea of democracy and hence Government supports in the form of low taxes, subsidies, and low interest rates on loans.

(vi) Ease of formation: It can be started with a minimum of ten members and registration procedure is simple with few legal formalities.

Q.2 A friends group of a hotel management institute wants to start their own catering house that will serve parties, weddings, church functions and business events. All 4 of them are very good cooks and have managed the university parties very well. They want to start and see that how this business works with contributing small small savings initially.

What form of business organisation shall they form with limited funds

Looking at their conditions and case, the friends shall form a partnership initially. Partnership offers the advantage of less legal formalities and lower cost because of limited scale of operations.

After being successful, this partnership can take form of any other form of business organisation based on the decisions of partners.

Q.3 Karan is the sole owner of a shoe manufacturing factory. He took loan of `30 lakhs from a bank so as to expand his business further. However, he incurred losses in the business, due to which Karan was not able to pay the loan on time and his assets were also not sufficient enough repay back the loan. As a result, the bank asked him for repayment of loan, but he refused to pay on the ground that the loan was taken in the name of business and not for personal use. The bank file a case against Karan and the court gave the decision in favor of Bank on the on the basis that Karan is the sole proprietor and his business doesnt have separate identity from his own. The Court further stated that Karan is liable to repay the loan even by selling his personal property.

State the demerits of the business organisation being highlighted in the above case.

Marks: 6 Ans

The form of business organisation being highlighted above is Sole proprietorship.

Demerits of Sole proprietorship

Limited life: Death, insolvency or illness of proprietor affects the business and may even lead to its closure as he/she is the sole owner of the business.
Unlimited liability: Owner has unlimited liability. In case of business failure, creditors can recover their dues not only from the business assets, but also from the personal assets of proprietor. It makes the sole proprietor less inclined towards taking risks in the form of innovation or expansion
Limited resources: Resources are limited to his/her personal savings or borrowing from other parties. Banks and other financial institutions might hesitate in lending long term loan to the sole proprietor. Size of the business rarely grows much and generally remains small due to lack of resources.
Limited Managerial Ability: The proprietor has to assume responsibility of varied managerial tasks. Since a business owner may not be a specialist in every field, there is a possibility of unbalanced decision making. Moreover, proprietor may not be able to employ and retain talented and ambitious employees, due to limited resources.

Q.4 A private company is superior to a public company. Discuss this statement in the light of privileges of a private company.

Privileges of a private limited company as against a public limited company:i. A private company can be formed only by two members, whereas seven persons are needed to form a public company. ii. There is no need to issue a prospectus as public is not invited to subscribe to the shares of a private company. iii. Allotment of shares can be done without receiving the minimum subscription. iv. A private company can start business as soon as it obtains the certificate of incorporation, whereas a public company can start its business only after receiving the certificate of commencement of the business. v. A private company needs to have only two directors as against the minimum of three directors in case of a public company. vi. A private company is not required to keep an index of members, while it is necessary in case of a public company.

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Cbse class 11 business studies important questions, chapter 1 - business, trade and commerce.

Chapter 3 - Private, Public and Global Enterprises

Chapter 4 - business services, chapter 5 - emerging modes of business, chapter 6 - social responsibilities of business and business ethics, chapter 7 - formation of a company, chapter 8 - sources of business finance, chapter 9 - small business, chapter 10 - internal trade, chapter 11 - international business, faqs (frequently asked questions), 1. how many business studies books are there for class 11.

For Class 11 Business Studies, the Central Board of Secondary Education (CBSE) only recommends one book. Therefore, the National Council of Educational Research and Training (NCERT) has released this book, which is available in both English and Hindi. This book is broken into two sections and has ten chapters. Part A comprises six units that address business foundation information, while part B contains the remaining four units that discuss financial and trade knowledge.

2. What are the essential chapters in Business Studies in Class 11?

There are ten chapters in the Business Studies syllabus for Class 11. Chapter 7 – Sources of Business Finance, Chapter 8 – Small Business, Chapter 9 – Internal Trade, and Chapter 10 – International Business are the most significant. It is so because they have a greater weight than the rest of the syllabus. Students can refer to Important Questions Class 11 Business Studies Chapter 2 for easier comprehension of these chapters.

3. What is so special about Important Questions Class 11 Business Studies Chapter 2 that it makes Extramarks stand out from the rest?

These Important Questions Class 11 Business Studies Chapter 2 are developed exclusively by the Extramarks subject experts. These solutions are 100 percent authentic and have been made after much research. They cover the concepts of the entire chapter and are written in simple and easy language.

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Important Questions for CBSE Class 11 Business Studies Chapter 4 - Business Services

Business Services Important Questions with Answers for CBSE Class 11: Free PDF Download

To help Class 11 students better prepare for the Business Studies Chapter 4- Business Service, Vedantu has provided important questions for the same in a downloadable pdf format. The pdf provides insights into the important topics of the Business Studies Chapter 4, from which questions are frequently asked in previous year’s business studies question papers of CBSE Class 11. Download the pdf to check them out.

With these important questions, you can master the chapter's important concepts in no time. Class 11 students are suggested to download a pdf with a single click on the pdf link provided below and practice questions to enhance their preparation.

Topics Covered in Class 11 Business Studies Chapter 4

4.1: Introduction to Business Service

4.2: Nature of Business Services

4.3: Types of Services

4.4: Banking

4.5: Insurance

4.6: Communication Service

4.7: Transportation

4.8: Warehousing

Study Important Questions for Class 11 Business Studies Chapter 4 - Business Services

Very short answer questions (1 or 2 marks).

1. State the five I's of services?

Ans: The five I’s of services are:

Intangibility

Inconsistency

Inseparability

Involvement.

2. What is the meaning of Banking?

Ans: Banking companies transact the business of banking for the aim of lending and investing public money deposits repayable on demand or otherwise, and withdrawable by checks, drafts, orders, or some other means. In simple terms, a bank accepts money on deposit that is repayable on demand, as well as lending money to generate a profit margin.

3. It is the prime responsibility of the insured to take reasonable steps to minimize loss/damage to the insured property. Name the principle of insurance.

Ans: Principle of Mitigation of Loss.

This principle states, as the owner of an insurance policy, the insured has an obligation to take the required actions to limit the loss of his/her insured property. The insured can't be careless or irresponsible just because he’s insured. The insured shall treat the insured thing with the same care as he or she would if the insurance were not present.

4. Define Insurance.

Ans: Insurance is a device that spreads the risk of a loss produced by an unpredictable event among a group of people who are exposed to it and who prepare to protect themselves against it. It's a contract or agreement in which one party agrees to pay an agreed amount of money to another party in the event of a loss, damage, or injury to something of value in which the insured has a pecuniary interest as a result of an uncertain event in exchange for a consideration.

5. Rahul's father wants to save Rs. 100,000 so that he can gift the money to Rahul on his graduation day. Which type of deposit should he open with the bank?

Ans: Fixed Deposit should be opened with the bank. Fixed accounts are time deposits with higher rates of interest as compared to savings accounts.

6. Name two companies that offer DTH service in our country?

Ans: Airtel, Tatasky offers DTH services in our country.

7. A company insures its stock against fire for Rs. 15 Lakh. A fire broke down and the total stock was lost. At the time of the fire, there was stock worth Rs. 25 Lakh. What is the value of compensation the company would be entitled to?

Ans: The contract for fire insurance is a rigorous indemnity contract. An insurance contract's objective is to make you whole in the case of a loss, not to allow you to profit. Hence in case of insurance other than life insurance, one can only be compensated for the amount of loss or the amount assured, whichever is lower.

As a result, the value of compensation the company would be entitled to is Rs 15 lakh.

Short Answer Questions (3 or 4 Marks)

8. Mr. Satish gets his house insured against fire of Rs. 20 Lakh with insurer A and for Rs. 10 Lakh with insurer B. A loss of Rs. 3 Lakh occurred.

(a) How much compensation can be claimed from A and B separately and Why?

Ans: According to this principle, the insurer can only seek compensation from all insurers or from a single insurer to the extent of the real damage. If one insurer provides the full compensation, the other insurers must pay a proportionate share of the claim.

Total value of insurance: Rs. 20,00,000 + Rs. 10,00,000 = Rs. 30,00,000

$\mathrm{A’s}\; \mathrm{Contribution} = \mathrm 3,00,000 \times \dfrac{20,00,000} {30,00,000}$

A’s Contribution = Rs. 2 Lakhs

$\mathrm{B’s}\; \mathrm {Contribution} = \mathrm 3,00,000 \times \dfrac{10,00,000} {30,00,000}$

B’s Contribution =1 Lakh

(b) Name the principle of Insurance in the above case.

Ans: Principle of Contribution is followed. If an individual purchases many insurance policies for the same item, the insurers will pool their resources to reimburse the insured for the real loss. The insured can only claim reimbursement to the extent of actual loss from all insurers or from any one insurer, according to this concept.

It applies when:

Different policies cover the same subject matter;

The policies cover the same period that generated the loss;

All the policies are in force at the time of loss; and

One of the insurers has paid the insured more than his share of the loss, the right of contribution arises.

9. Explain the function of Insurance

Ans: Insurance's Functions are as follows:

Insurance tends to reduce the level of risks, and the insured receives the payment for loss. The insurer charges for providing the certainty, in terms of premium.

Protection:

Insurance provides protection from probable chances of loss, such as loss due to fire, theft etc. Insurance may not prevent a risk or event from occurring, but it can compensate for losses incurred as a result of it.

Risk sharing:

All those who have been affected by the loss, share it. Every insured member pays a premium to acquire their share.

Capital formation:

The assets accumulated by insurers as a result of premium payments made by the insured are invested in a variety of income-generating schemes.

Promote effectiveness and motivation:

Insurance has made significant contributions to the progress of industry and commerce. Insurance businesses provide a variety of services that have resulted in today's large-scale industrial and commercial enterprises.

10. Explain the Difference between Goods and services based on its nature.

Ans: On the basis of nature, the following differences exist between services and goods:

11. Name the principle of insurance for each of the following statements:

(a) The insured is expected to disclose all the important facts related to the property insured.

Ans: Principle of Utmost Good Faith.

(b) Insured must have some economic interest in the subject matter of Insurance contract.

Ans: Principle of Insurable Interest.

Ans: Principle of Mitigation of loss.

(d) Insured is entitled to recover the loss suffered by him, up to the limit of the policy amount.

Ans: Principle of Indemnity.

12. Explain the types of Life Insurance Policies?

Ans: Different types of life insurance policies include:

Whole Life Policy: In this type of policy, the sum due to the insured is not paid until the assured passes away. The money is then solely due to the deceased's beneficiaries or heirs.

Endowment Life Assurance Policy: The insurer agrees to pay a set amount when the insured reaches a certain age or dies, whichever comes first. In the event of the assured's death, the payment is payable to his legal heirs or nominee stated therein. Otherwise, the payment will be paid to the assured when a certain amount of time has passed.

Joint Life Insurance: This coverage is purchased by two or more people. The premium is paid jointly or by either of them in installments, or in a lump sum assured sum or policy money is due to the other survivor or survivors upon the death of any one of them.

Policy on Annuities : After the person reaches a particular age, the promised sum or policy money is paid out in monthly, quarterly, or annual installments.

Policy on Children's Endowment : A person purchases this policy for his or her children in order to cover the costs of their education or marriage. The agreement specifies that the insurer will pay a certain amount when the children reach a certain age.

13. Explain electronic banking and state its three benefits?

Ans: Online banking, often known as internet banking, e-banking, or virtual banking, is an electronic payment system that allows bank or other financial institution customers to execute a variety of financial transactions via the financial institution's website. The word "internet banking" refers to the process of a client doing banking transactions over the internet. This sort of banking makes use of the internet as the primary mode of delivery for all banking transactions.

The following are some of the advantages:

Availability 24x7: E-banking is available 24 hours a day, 365 days a year. At any moment, a client can log into his or her own bank account and execute financial activities online. Customers benefit from increased flexibility and comfort because they do not have to visit their banks in person.

Convenient access: Transactions may be done on mobile phones and PCs as needed.

E-banking decreases bank workload: E-banking reduces bank workload by allowing a substantial part of tasks to be performed electronically.

14. Explain the Functions of Warehousing?

Ans: The functions of warehousing are:

Storage: Warehouses make it easier to store products and raw materials that aren't needed right away for sale or manufacture, while also protecting them from rotting and damage.

Value-added services: They provide producers with value-added services such as product grading, packaging, and labelling.

Financing: The warehouse receipt can be used as collateral to borrow money from banks or other financial organisations by the owner of the products or raw materials kept in the warehouse.

Break the bulk: Warehouses are responsible for dividing large quantities of items received from manufacturing companies into smaller quantities. The smaller quantities are then transported according to the requirements of clients to their places of business

Consolidation: The warehouses gather and consolidate material/goods from various manufacturing units before dispatching them to a specific consumer via a single transportation package.

Stockpiling: The seasonal storing of commodities for certain businesses is the next role of warehousing. Raw materials, which are not required immediately for sale or manufacturing, are stored in warehouses. They are made available to enterprises according to the number of consumers they have .

Price stabilisation: Warehousing provides the role of price stabilisation by adapting the supply of products to the demand condition.

15. Explain the three important insurances involved in Marine Insurance?

Ans: A marine insurance contract is an arrangement in which the insurer agrees to indemnify the insured against marine losses in the way and to the extent agreed upon. Marine insurance protects against losses caused by marine perils, often known as sea perils.

There are three important insurances under this:

Ship or Hull Insurance: Because the ship is exposed to several dangers at sea, this insurance policy is designed to compensate the insured for losses incurred as a result of ship damage.

Cargo insurance: Cargo or the goods in the ship is exposed to numerous dangers while being transported by ship, this insurance covers the risk of voyage.

Freight insurance: If the cargo is damaged or lost in transit, the shipping business is not reimbursed for the freight payments, hence to avoid this scenario, the shipping company takes up this insurance policy.

Long Answer Questions (5 or 6 Marks)

16. Describe briefly Types of warehouses?

Ans: Warehousing is the process of keeping things in a systematic and orderly way in order to preserve their worth and quality. Warehouses provide not only storage but also logistical services by locating the appropriate amount in the right place at the right time and at the right price.

The different types of warehouses are:

Private Warehouses: Large manufacturers and merchants own and run private warehouses to meet their own storage needs. Big businesses who require a lot of storage space on a regular basis and can afford it build and manage their own warehouses.

Public Warehouses: A public warehouse is a specialised business entity that charges a fee for providing storage facilities to the general public. An individual or a cooperative organisation may own and operate it. It operates under a government-issued license and follows all applicable rules and regulations. Small producers and traders can store their goods for free in public warehouses. To assure the safe custody of commodities, these warehouses are well-built and guarded 24 hours a day, seven days a week. Public warehouses are typically found around railway, highway, and canal intersections.

Duty-paid Warehouses: If an importer encounters any difficulties in transporting goods after paying duty, the products can be housed at a duty-paid warehouse. All duty-paid warehouses are open to all importers and are public warehouses. Importers benefit from duty-paid warehouses because the items are properly cared for and processed, such as sorting and repacking.

Government Warehouses : The federal and state governments, as well as public authorities, own, administer, and control these warehouses. Because owning a warehouse is difficult for small farmers, businesses, and traders, these government warehouses aid them in storing their goods for a fee.

Co-operative Warehouses: Co-operative societies own, manage, and administer these warehouses. They mostly provide warehousing services at the most affordable prices. Farmers, traders, and the general public benefit greatly from these types of warehouses.

Cold storage warehouses: Cold storage warehouses are used to store perishable goods such as fruits, flowers, vegetables, dairy products, and other perishable items. Goods are held and chilled at extremely low temperatures in cold storage facilities in order to preserve them and utilize them in the future. These warehouses have made international trade possible.

17. A factory owner gets his stock of goods insured, but he hides the fact that the electricity board has issued him a statutory warning letter to get his factory's wiring changed. Later on, the factory catches fire due to a short circuit of wiring. Can he claim compensation ?

Ans: No, he cannot claim the compensation. This is because he has hidden a very crucial fact about his factory wirings. Therefore, he has violated the principle of Utmost Good faith.

This principle states that the insurance contracts require that both parties act with the utmost good faith. This means that both parties must provide all relevant information honestly and completely. This not only measures the level of risk, but also helps insurance companies accurately price premiums for insurance applicants. Insurance policies can be declared null and void if an applicant provides wrong representation of material fact that was relied on by the insurance company.

18. Write notes on the RTGS system and NEFT. Also, state the difference between them.

Ans: The notes are:

NEFT: The acronym NEFT stands for National Electronic Funds Transfer. It is an internet technique for moving payments within India from one banking institution to another (usually banks). The system was introduced in November 2005, and it was designed to take over the SEFT clearing system's query bank. NEFT is a Deferred Net Basis system, in which transactions are packaged and deferred for a defined period of time. Also, in NEFT, the transactions are processed in batches with no minimum and maximum limits.

RTGS: The abbreviation RTGS stands for Real Time Gross Settlement. RTGS is a real-time gross funds transfer system that allows money to travel from one bank to another in real time. RTGS is the fastest way to transfer money when using the banking method. The term 'real-time' refers to the lack of a waiting period in the payment process, as the transaction will be finished, as soon as the processing is done. Also, gross settlement means a transfer is performed one by one, without being grouped with other transactions.

Following are the Difference Between RTGS and NEFT:

19. Divya Garments Ltd. has a loan of Rs. 10,00,000 to pay. They are short of funds so they are trying to find means to arrange funds. Their manager suggested claiming from the insurance company against stock lost due to a fire in the warehouse. He actually meant that they can put their warehouse on fire and claim from an Insurance company against stock insured. They will use the claim money to pay the loan.

(a) Will the company receive a claim if the surveyor from the company comes to know the real cause of the fire?

Ans: No, the company will not be reimbursed if the surveyor discovers the true cause of the fire, and the contract will be voided.

(b) Which values did the company ignore while planning to arrange money from the false claims?

Ans: When attempting to arrange money from a false claim, the principle of utmost good faith is disregarded. Insurance contracts demand that both parties operate in the best interests of the other. This means that both parties must provide all relevant information honestly and completely. This maintains impartiality while also assisting insurance firms in appropriately pricing premiums for applicants. If an applicant makes a major fact deception that the insurance company relies on, the policy might be deemed null and void.

Hence, the values disregarded are trust, honesty and transparency.

Ans: There are three aspects to fire insurance:

Insurable Interest: The insured must have an insurable interest in the insurance's subject matter. The insurance contract is void if there is no insurable interest.

Utmost Good Faith: When providing information to the insurance company about the subject matter of the policy, the insured should be accurate and honest .

Indemnity: The contract for fire insurance is a rigorous indemnity contract. In the case of a loss, the insured can sue the insurer for the full amount of the loss. This is subject to the maximum amount of insurance coverage for the subject matter.

20. Write a detailed note on various facilities offered by the Indian Postal Department and different types of telecom services offered?

Ans: The Indian Postal and Telegraph Department provides a variety of postal services throughout the country.

Facilities provided by Indian Postal Department

Financial facilities:

Post offices provide a range of savings options to the general public. These facilities are provided through the post office's savings schemes like:

Public Provident Fund (PPF)

Kisan Vikas Patra

National Saving Certificate (NSC)

Recurring Deposit Scheme

Fixed Deposit Scheme

Mail facilities:

Mail services include:

Parcel facilities: They make it easier to transport an item from one location to another.

Registration services: These services ensure that the article being sent is secure.

Insurance facilities: These cover the risks associated with postal transmission.

The following are some of the mail services supplied by banks:

Postcards: This is the least expensive method of mail delivery.

Letter: It is enclosed in an envelope and guarantees the confidentiality of the information communicated.

Registered mail: Registered mail ensures that the mail sent to the recipient is delivered or returned to the sender if it is not.

Additional Services :

Greeting cards, media mail, international money transfers, speed mail, passport services, and e-billing services are also offered by these departments.

Telecom Services

Cellular mobile service: This includes voice and non-voice transmission, as well as data transmission.

Radio paging service: This is a one-way communication system that sends out information in the form of a tone, numeric, or alphanumeric message.

Fixed-line service: This type of service entails the installation of fibre optic cables across the nation for the transmission of data, including voice and non-voice communications.

Cable service: This service transmits media-related information to a designated operational region for which a licence has been obtained. The information flow is one-way with this sort of telecom service.

VSAT service: VSAT stands for "Very Small Aperture Terminal" and refers to a satellite-based communication service that allows information to be sent to far-flung and remote locations. As a result, businesses benefit from a broader reach and greater flexibility.

DTH service : DTH stands for Direct-To-Home, and it is a form of telecommunications service provided by DTH providers. Customers receive TV channels through satellites from the corporations. Customers may watch several channels by connecting their television to a tiny dish antenna and a set-top box.

21. State Six Difference Between Life Insurance, Fire Insurance, and Marine Insurance?

Ans: The difference between Life Insurance, Fire Insurance, and Marine Insurance is:

22. Explain in detail the principles of Insurance?

Ans: Insurance is a service that protects you from certain sorts of risks that can occur as a result of unforeseeable circumstances. It provides confidence to individuals by offering a set amount of money in the event of death or damage to personal property. In exchange for this assurance, the insured must pay a premium. The concepts of insurance on which insurance contracts are built are as follows:

Principle of Absolute good faith: Both the insurer and the insured must believe in each other and the contract they have signed. For example, if Rahul has a heart condition, he should tell his insurance firm about it while purchasing a life insurance policy.

Principle of Insurable interest: The insurable interest requires that the owner of a particular insurance policy has an insurable interest in the subject matter of the insurance policy. For example, a wife having insurable interest in her husband’s life due to financial dependency, a person’s interest in his property etc.

Principle of Indemnity : The goal of an insurance contract, according to the indemnity principle, is to restore the insured to the same financial position as before the loss. to he or she For example, if a person loses Rs. 1 lakh in a fire, the insurance company will only accept a claim up to Rs. 1 lakh and not more.

Principle of Proximate cause: The proximate cause insurance principle states that the nearest or closest cause should be considered, and the insurance company will compensate only for the causes that have been mentioned in the insurance contract, or any proximate causes, and not the remote causes of damage. For example, if a person is injured in a fire, this should be included in the contract so that the individual may collect the insurance benefits.

Principle of Subrogation: Once the compensation is paid, the insurer gains ownership of the damaged item, preventing the insured from profiting from the sale of the damaged property. For example, if a person receives Rs. 1 lakh for a damaged stock, the stock's ownership will be transferred to the insurance company, and the person will no longer have control over the stock.

Principle of Contribution: If an individual purchases many insurance policies for the same item, the insurers will pool their resources to reimburse the insured for the real loss. If a person A insures his or her home for Rs. 2 lakh with insurance B and Rs. 1 lakh with another insurer, say C, then in the event of a loss of Rs. 90,000, insurer B and insurer C will pay A Rs. 90,000 in total and no more.

Mitigation: The insured shall treat the insured thing with the same care as he or she would if the insurance were not present. For example, if a person obtains fire insurance, he or she should take all reasonable steps to minimise property damage in the event of a fire, just as he or she would have done if the insurance had not been purchased.

Benefits of Practicing Important Questions for CBSE Class 11 Business Studies

Practicing important questions helps you analyze your weak areas, and you can use appropriate study material to improvise them.

It helps you to know the different ways questions can be put up in the exams.

Practicing important questions regularly enhances your time and speed of attempting accurate answers in exams.

Boost your confidence level in the examination hall.

Extra Question for Practice

Discuss the nature of services in brief.

How are services different from Goods?

What are commercial and cooperative banks?

What is E-Banking?

What is the basic principle of Insurance?

Describe any three functions of insurance.

What are the different elements of a Life Insurance Contract?

Mention different types of life insurance policies.

How do life, marine, and fire insurance differ?

Describe communication services in brief.

Chapterwise Important Questions for CBSE Class 11 Business Studies

Chapter 1 - Business, Trade and Commerce

Chapter 2 - Forms of Business Organisation

Chapter 3 - Private, Public and Global Enterprises

Chapter 5 - Emerging Modes of Business

Chapter 6 - Social Responsibilities of Business and Business Ethics

Chapter 7 - Formation of a Company

Chapter 8 - Sources of Business Finance

Chapter 9 - Small Business

Chapter 10 - Internal Trade

Chapter 11 - International Business

Practicing the important questions for the topic Business Services allows Class 11 students to go through the important topics of the chapter quickly. They will be able to precisely answer the related questions in the exam in less time. Class 11 students are highly suggested to consider these important questions as part of their Revision for the business studies Exam.

FAQs on Important Questions for CBSE Class 11 Business Studies Chapter 4 - Business Services

1. What are Class 11 business studies?

Business services are defined as actions that help businesses but do not produce a physical product. Information technology can be cited as an appropriate example as it is a business service that provides its support to multiple varieties of other business services including shipping, procurement, and finance. Work that supports a firm but does not generate a physical product is referred to as business services. These are quite important for any firm or business and play a crucial role in their overall functioning.

2. What is public sector class 11 business?

The public sector is made up of a variety of entities that are owned and administered by the federal, state, or both governments. Through these companies, the government engages in the country's economic activity. The different types of public goods and governmental services, for example, law enforcement and military, infrastructure, public transit, and so on along with the individuals who work for the government, such as elected politicians, are all included in the public sector.

3. Why are government companies considered superior to other forms of the public sector?

The government corporation is chosen above other forms of public-sector organizations for the following reasons:

It is simple to establish a government corporation because no specific legislation is required.

A government company's management is more flexible than that of a department.

Due to its benefits over other kinds of organizations, government companies are chosen over other forms of organizations. These benefits include registration under the Companies Act and as a legal entity, it exists independently.

4. What are the different types of Public Sectors in Class 11?

In India, the public sector is organized in three main ways. These are Departmental Undertaking, Government Company and Statutory (or Public) Corporation.

Government-owned companies in India are often termed PSUs or PSEs (Public Sector Undertakings). India's central government, one of India's numerous state and territorial administrations, and even both of them jointly control these firms. These hold a lot of advantages over the other sectors but just like all sectors, these too hold a few disadvantages.

5. Where can I avail the Solutions of NCERT Class 11 Business Studies Chapter 4?

The solutions are easily available on the Vedantu site.

Visit the page NCERT Solutions for Class 12 MicroEconomics Chapter 4.

The webpage with Vedantu’s solutions for Class 11 Business Studies Chapter 4 will open.

To download this, click on the Download PDF button and you can view the solutions offline.

All other types of problems and solutions with their plausible explanations are also provided on the Vedantu website and on the Vedantu app at free of cost.

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Get Access to CBSE Class 11 Business Studies Important Questions 2022-23 with Solutions

Q1. What are the important privileges available to a private company?

Q2. With a notable example, explain mutual agency in partnership.

Q3. What is meant by “partner by estoppel”? Explain.

Q4. What exactly is HUF?

Q5. Why do some consider partnership a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Limitations of business partnership:

Q6. In what form of Business do individuals associate freely for profit, with capital dividends into transferable shares, and ownership of which is a requirement of membership? Explain in terms of characteristics.

Q7. Even though there are limitations of size and resources, several people continue to prefer sole proprietorship compared to other forms of organisation? Why?

Q8. Which business model is best for the following businesses, and why?

Q9. How does a cooperative society exemplify democracy and secularism? Explain.

Q10. What does it mean to have unlimited liability?

Q11. Compare the status of a minor in a Hindu joint family business with that in a partnership firm.

Q12. Who has equal ownership rights to an ancestor’s property? Emphasise its most important aspects

A combined Hindu family company has the following characteristics:

Q13. Why is it important to choose an appropriate form of organisation? Discuss the factors that determine the choice of form of organisation.

Q14. What are the reasons for the formation of cooperative forms of organisation? Describe the different sorts of cooperative societies.

Q15. If registration is optional, why do partnership firms willingly go through this legal formality and register themselves? Explain.

Forms of Business Organisation Class 11 Important Questions – Key Topics Covered

Benefits of Solving Class 11 Business Studies Chapter 2 Important Questions

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Chapter 3 - Private, Public and Global Enterprises

2. What are the essential chapters in Business Studies in Class 11?

3. What is so special about Important Questions Class 11 Business Studies Chapter 2 that it makes Extramarks stand out from the rest?

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Business Services Important Questions with Answers for CBSE Class 11: Free PDF Download

Topics Covered in Class 11 Business Studies Chapter 4

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CBSE Class 11 Business Studies Important Questions

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