CBSE Class 11 Business Studies Business Services Assignment

• Introduction 

 

The chapter Business Services gives you a brief introduction to the characteristics of business services, the difference between services and goods, classification on types of business services, the concept of e‐banking, identification and classification of types of insurance policies and the description of different types of warehouses.

 

• Definition

 

Auxiliaries to trade are also known as business services. Service sector includes commercial firms engaged in banking, communication, transport, insurance and warehousing. Business cannot be even imagined in the absence of these services. All these services collectively constitute the Service Sector.

 

• Nature/Features/Characteristics of services

 

 

 

BUSINESS SERVICES

Very Short Answer Type Questions

Question 1. Give two examples of e-banking.
Answer: Two examples of e-banking are:
1. Electronic Fund Transfer (EFT)
2. Automated Teller Machine (ATM)
In simple words: E-banking refers to doing banking tasks online or through electronic systems like ATMs and online fund transfers.

Exam Tip: Mention clear and common digital banking services like net banking, mobile banking, or ATMs to score full marks.

Question 2. Who can get an overdraft from a bank?
Answer: An overdraft facility can be obtained by a current account holder, which is typically a business firm, trader, or corporate entity having a business account with the bank.
In simple words: Current account holders, mostly businessmen, are allowed by banks to withdraw more money than they actually have in their account up to a certain agreed limit.

Exam Tip: Always specify "current account holder" as savings accounts generally do not offer overdraft facilities.

Question 3. Give full form of ATM.
Answer: The full form of ATM is Automated Teller Machine.
In simple words: An ATM is a computerized machine that lets bank customers withdraw cash and check balances without needing a human teller.

Question 4. In which type of insurance, insurable interest must exist only at the time of insurance?
Answer: Insurable interest must exist only at the time of effecting the policy in the case of Life Insurance (it is not necessary for insurable interest to be present at the time of the claim's maturity or death).
In simple words: In life insurance, you only need to have a valid interest in the person's life when you buy the policy, not necessarily when they pass away.

Exam Tip: Contrast this with marine insurance where insurable interest is required at the time of claim, and fire insurance where it is required both at inception and at the time of claim.

Question 5. Name two companies that offer DTH services in our country.
Answer: Two companies that offer Direct-to-Home (DTH) television services in India are Tata Play (formerly Tata Sky) and Dish TV.
In simple words: Companies like Tata Play and Dish TV broadcast satellite television directly to homes using small dish antennas.

Exam Tip: Use current and popular brand names operating within the telecommunication and broadcasting sector in India.

Question 6. List two main functions of warehousing.
Answer: Two main functions of warehousing are:
1. Stockpiling: Storing goods safely until they are demanded in the market.
2. Price Stabilization: Maintaining a uniform price level by releasing goods during periods of shortage and storing them during excess production.
In simple words: Warehouses store goods safely to protect them and ensure steady supplies and stable prices throughout the year.

Exam Tip: Keep the functions concise and professional using standard business terminology like stockpiling and price stabilization.

Question 7. Name the oldest mode of transportation.
Answer: Water transport (Shipping/Waterways) is traditionally considered the oldest mode of transportation, predating modern railways, motor transport, and airways.
In simple words: Water transport using boats and ships is the oldest way humans moved goods and people across long distances.

Exam Tip: Remember that water transport historically formed the backbone of global trade before land and air networks developed.

SA (3/4 Marks)

Question 1. Distinguish between goods and services.
Answer:

In simple words: Goods are physical items you can touch and keep, whereas services are intangible actions or performances done for you.

Exam Tip: Tabular presentation with clear headings is the best way to answer distinction questions in business studies.

Question 2. Explain any two kinds of life insurance policies.
Answer: Two kinds of life insurance policies are:
1. Whole Life Assurance: Under this policy, the sum assured is not paid during the lifetime of the insured. Instead, it becomes payable only to the beneficiaries or legal heirs after the death of the insured. Premium is paid throughout life or for a fixed period.
2. Endowment Life Insurance Policy: Under this policy, the insurer undertakes to pay a specified sum of money when the insured reaches a specific age or upon their death, whichever is earlier. It provides both protection against death and a means of long-term savings.
In simple words: Whole life insurance pays your family after your death, while endowment policy pays out either after a certain period or upon death, acting as savings plus protection.

Question 3. State any two benefits of transportation.
Answer: Two benefits of transportation are:
1. Creation of Place Utility: Transportation moves goods from places of surplus production to places where they are scarce and required, increasing their utility and value.
2. Facilitates Mass Production and Market Expansion: It enables businesses to procure raw materials from distant locations and distribute finished goods to national and international markets, supporting large-scale operations.
In simple words: Transport helps bridge geographical gaps by moving goods where they are needed and expanding market reach for businesses.

Question 4. Explain any three types of warehouses.
Answer: Three types of warehouses are:
1. Private Warehouses: These are owned and operated by big manufacturers, wholesalers, or agricultural producers exclusively to store their own goods.
2. Public Warehouses: These are operated by individuals or agencies to store goods for the general public on a rental basis, subject to licensing and government regulations.
3. Bonded Warehouses: These are licensed by the government to store imported goods until customs duties and taxes are paid by the importer.
In simple words: Private warehouses belong to private firms for own use, public warehouses rent storage space to anyone, and bonded warehouses hold imported goods until duty is paid.

Exam Tip: Highlight the ownership and purpose of each warehouse type clearly.

LA (5/6 Marks)

Question 1. Explain the functions of commercial banks.
Answer: Commercial banks play a vital role in the financial system by performing various primary and secondary functions:
1. Acceptance of Deposits: Banks accept surplus funds from the public in the form of savings accounts, current accounts, fixed deposits (term deposits), and recurring deposits, offering safety and interest to depositors.
2. Lending of Funds: Banks advance loans, cash credit, overdraft facilities, and discount bills of exchange to business firms and individuals, earning interest on these advances.
3. E-Banking Services: Banks provide modern electronic services such as Electronic Fund Transfer (EFT), Automated Teller Machines (ATM), debit cards, credit cards, and online net banking for quick transactions.
4. Remittance of Funds: Banks facilitate the safe transfer of funds from one place to another for customers using wire transfers, demand drafts, and electronic clearing services.
5. Providing Cheque Facilities: Banks allow customers to withdraw funds and make payments easily using cheques, which serve as a convenient and negotiable instrument of trade.
In simple words: Commercial banks accept deposits, grant loans, provide digital banking, transfer money, and offer cheque facilities to help individuals and businesses manage money.

Exam Tip: Structure long answers with clear headings and brief explanations for each function to earn full credit.

Question 2. Distinguish between life insurance and fire insurance.
Answer:

In simple words: Life insurance covers human life with savings and protection benefits, while fire insurance only covers property damage caused by fire for a short period.

Exam Tip: Tabulate points like Subject Matter, Indemnity principle, and Duration as these are key evaluative criteria for examiners.

Question 3. Explain the various functions of warehouses.
Answer: Warehousing performs several vital economic and logistical functions in modern commerce:
1. Consolidation: Warehouses receive small consignments of goods from various producers and consolidate them into a single larger shipment for dispatch to buyers.
2. Breaking the Bulk: Warehouses take large bulk shipments received from manufacturers and divide them into smaller, marketable quantities required by retailers or consumers.
3. Stockpiling: Seasonal goods (such as agricultural produce) are stored in large quantities during harvest periods and released gradually throughout the year to maintain continuous supply.
4. Price Stabilization: By balancing demand and supply through controlled release of stored goods, warehouses prevent extreme price fluctuations in the market.
5. Financing: Warehouse receipts issued against stored goods can be pledged with banks as collateral security to obtain loans and financial advances.
In simple words: Warehouses consolidate shipments, break bulk quantities, stockpile goods, stabilize prices, and help secure financing using stored goods as collateral.

Exam Tip: Clearly define each function with business terms like "breaking the bulk" and "price stabilization" to demonstrate subject mastery.

Question 4. Explain the main modes of transport.
Answer: Transportation is crucial for physical movement of goods and people. The main modes of transport are:
1. Roadways: This is the most flexible mode of transport, providing door-to-door service and connecting remote rural areas with urban markets. It is ideal for short and medium distances.
2. Railways: Railways are best suited for carrying heavy goods and large numbers of passengers over long distances across land efficiently and at relatively low costs.
3. Airways: Airways are the fastest mode of transport, connecting distant international destinations. It is essential for perishable items, urgent documents, and high-value goods, though it is the most expensive mode.
4. Shipping (Waterways): Water transport is the cheapest mode of transport, operating along inland waterways and ocean routes. It is indispensable for carrying bulky, heavy, international cargo across continents.
In simple words: The four main transport modes are roadways for door-to-door delivery, railways for heavy land transport, airways for fast delivery, and shipping for bulk global trade.

Exam Tip: Mention the relative advantages (e.g., speed of airways vs. economy of shipping) for each mode.

HOTS (High Order Thinking Skills)

Question 1. Name the type of banking under which ATM, Credit card and EFT facilities are available.
Answer: E-Banking (Electronic Banking).
In simple words: ATM, credit card, and electronic fund transfer facilities are all part of electronic banking or e-banking.

Exam Tip: Keep the term precise as "E-banking" or "Digital banking".

Question 2. Mala obtained a life insurance policy of her husband. After 3 years, Mala divorced her husband. After one year of divorce, her husband died in a car accident. Can Mala claim the amount of policy from the insurance company?
Answer: Yes, Mala can claim the policy amount from the insurance company. In life insurance, insurable interest must be present at the time when the policy is effected (taken), but it is not necessary for insurable interest to exist at the time of the claim or death.
In simple words: Yes, she can claim the money because insurable interest in life insurance is only required when taking the policy, not at the time of death.

Exam Tip: This is a classic application-based HOTS question testing the rule of insurable interest in life insurance versus fire/marine insurance.

Question 3. Ships carrying oil are called _________.
Answer: Tankers (or Oil Tankers).
In simple words: Ships specially built for carrying liquid cargo like crude oil are known as oil tankers.

Question 4. Cellular companies offer satellite based media service. The service can be viewed on ________.
Answer: Television (or Mobile phones/Screens equipped with DTH receivers).
In simple words: Satellite-based media services offered by telecom and DTH companies can be viewed on television screens or digital display devices.

Exam Tip: Connect satellite communication services with television or digital display screens.