ICSE Class 10 Commercial Applications Board Exam Question Paper 2013 with Solutions

ICSE Class 10 Commercial Applications Board Exam Question Paper 2013 with Solutions

SECTION A (40 Marks)

(Attempt all questions from this Section)

Question 1
Give one difference between each of the following:

(a) Industrial goods and Consumer goods. [2 Marks]

Answer:

Teacher's Note:
a) Industrial goods are meant for use in producing other goods or providing services, whereas consumer goods are meant for final consumption by households.
b) Students must include a clear example for each category to secure full marks.

(b) Fixed assets and Current assets. [2 Marks]

Answer:

Teacher's Note:
a) Fixed assets provide long term economic benefits, while current assets are short term and highly liquid.
b) Note that the original official key mentions duration of current assets as 1 to 2 years, but standard accounting convention defines current assets as those realizable within 12 months .

(c) Sales promotion and Publicity. [2 Marks]

Answer:

Teacher's Note:
a) Sales promotion consists of short term incentives to encourage purchase, whereas publicity is unpaid news coverage.
b) Ensure that students clearly state the aspect of sponsorship and payment to differentiate promotional tools effectively.

(d) Fixed deposit and Recurring deposit. [2 Marks]

Answer:

Teacher's Note:
a) Fixed deposit involves lump sum investment at one go, while recurring deposit involves periodic monthly investments.
b) Highlight the installment frequency difference as the key distinguishing point.

(e) Direct labour costs and Indirect labour costs. [2 Marks]

Answer:

Teacher's Note:
a) Direct labour costs are directly allocable to the product, whereas indirect labour costs form part of overheads.
b) Give appropriate factory or administrative examples to avoid loss of marks.

Question 2

(a) What is Food Adulteration? Give an example. [2 Marks]

Answer:
Food Adulteration means deliberate mixing of foreign particles of low quality which are undesirable in the food items, to increase the quantity.
e.g. - Mixing of stone pieces identical to wheat, rice, and pulses.

Teacher's Note:
a) Adulteration lowers the quality and safety of food products for consumers.
b) The definition must include the term 'deliberate' mixing of inferior or harmful substances.

(b) Mention the elements of Public Relations. [2 Marks]

Answer:
The elements of Public Relations are:
1. Human Relations
2. Empathy
3. Persuasion
4. Dialogue

Teacher's Note:
a) Public relations relies heavily on effective communication and psychological understanding between an organization and its public.
b) Listing all four elements clearly fetches full marks without needing elaborate descriptions.

(c) Why should an Income and Expenditure Account be prepared? [2 Marks]

Answer:
Income and Expenditure Account is prepared to know the surplus or deficit arising from the activities of a non-trading concern during a particular accounting year.

Teacher's Note:
a) It is prepared on accrual basis by non-trading institutions like clubs, libraries, and hospitals, similar to a Profit and Loss Account.
b) Students must mention the final outcome terms 'surplus' or 'deficit'.

(d) Give two basic differences between Informative advertising and Persuasive advertising. [2 Marks]

Answer:

Teacher's Note:
a) Informative advertising focuses on awareness, while persuasive advertising focuses on brand preference.
b) Distinguish between primary demand creation and selective demand creation.

(e) What are 'contingent liabilities'? [2 Marks]

Answer:
Contingent liabilities are those liabilities which become payable on the happening of an uncertain future event.
e.g. - Bills discounted but not matured, guarantee given for a loan. These are also known as anticipated liabilities.

Teacher's Note:
a) These liabilities are not actual obligations at the date of the balance sheet but are disclosed in footnotes.
b) Students should provide at least one standard business example like discounted bills.

Question 3

(a) On the basis of ownership, distinguish between a Product and a Service. [2 Marks]

Answer:

Teacher's Note:
a) Products are tangible items where title or ownership changes hands upon sale, whereas services are intangible performances.
b) Use clear real-world examples to substantiate the distinction.

(b) Explain in brief the term 'Parity Pricing'. [2 Marks]

Answer:
Parity Pricing is a concept where the selling price of a product or produce is adjusted in accordance with the prices of competing products in the market or the changes in input costs. It is best suited for a highly competitive market to maintain market share.

Teacher's Note:
a) Parity pricing helps firms stay competitive by matching prices with market leaders or general industry standards.
b) Ensure keywords like competitor adjustment and market competition are clearly mentioned.

(c) How does the Central Bank control credit through Statutory Liquidity Ratio. [2 Marks]

Answer:
Statutory Liquidity Ratio (SLR) refers to the minimum percentage of deposits that commercial banks are required to maintain in the form of specified liquid assets like gold or government approved securities before lending to customers. By increasing SLR, the Central Bank reduces the lending capacity of commercial banks, thereby controlling credit expansion.

Teacher's Note:
a) SLR is a quantitative credit control instrument used by the Central Bank (RBI in India).
b) Explain the inverse relationship between SLR changes and credit creation capacity.

(d) Explain the terms Surplus and Deficit in an Income and Expenditure Account. [2 Marks]

Answer:
Surplus: If the total income of a non-trading concern exceeds its total expenditure during an accounting period, the excess is known as surplus.
Deficit: If the total expenditure exceeds the total income during an accounting period, the excess is known as deficit.

Teacher's Note:
a) Surplus corresponds to net profit in a trading concern, while deficit corresponds to net loss.
b) Definitions must reflect the comparison between total income and total expenditure.

(e) With reference to the Bhopal Gas Tragedy:
(i) Name the company responsible for the tragedy.
(ii) Identify the poisonous gas that caused this ghastly man made disaster. [2 Marks]

Answer:
(i) Union Carbide India Limited.
(ii) Methyl Isocyanate (MIC).

Teacher's Note:
a) This disaster remains a landmark case study in industrial safety and environmental ethics.
b) Spelling of chemical names like Methyl Isocyanate must be accurate.

Question 4
Justify either for or against by giving two reasons for each of the following:

(a) Aggressive selling is the only way a company can survive in a highly competitive market. [2 Marks]

Answer:
For.
1. Through aggressive selling, a company can attract more customers and persuade them to exchange money for its products by proving superiority over competitors.
2. It employs advanced marketing and selling techniques to explore customer needs and achieve maximum customer satisfaction and market penetration.

Teacher's Note:
a) In competitive markets, mere product availability is insufficient; active promotion is vital.
b) Students must explicitly state 'For' and provide two distinct supporting points.

(b) Real costs must be recorded in the books of accounts. [2 Marks]

Answer:
Against.
1. Real costs (such as human sacrifice, psychological stress, and physical discomfort involved in business operations) cannot be measured reliably in terms of money.
2. According to the Money Measurement Concept, only transactions and events capable of being expressed in monetary terms are recorded in accounting books.

Teacher's Note:
a) Accounting principles restrict recording to items with objective monetary values.
b) Clearly state 'Against' and invoke the money measurement convention.

(c) Training reduces employee turnover. [2 Marks]

Answer:
For.
1. Training increases worker efficiency, boosts employee morale, and gives workers confidence in handling job responsibilities.
2. It fosters employee loyalty, long term career growth, and job satisfaction, thereby reducing the tendency of employees to leave the organization.

Teacher's Note:
a) Well-trained employees experience lower frustration levels and feel valued by the management.
b) State 'For' and link training directly to employee retention and morale.

(d) Tea and coffee can be sold on sale-on approval or return basis. [2 Marks]

Answer:
Against.
1. Sale on approval or return basis is meant for durable or specific consumer goods where items can be evaluated and returned if unsatisfactory.
2. Consumable food items like tea and coffee once consumed cannot be returned or re-valued, making this sales arrangement impractical.

Teacher's Note:
a) Perishable or consumable goods are unsuited for return-basis transactions due to consumption loss.
b) State 'Against' and explain the practical difficulty of valuation and return for consumables.

(e) Increased advertising in recent times has resulted in lower prices of newspapers. [2 Marks]

Answer:
For.
1. Advertising has become a major source of revenue for newspaper publishers.
2. This substantial ad revenue subsidizes production costs, allowing publishers to sell newspapers at lower prices, which in turn increases circulation.

Teacher's Note:
a) Media economics relies heavily on advertising revenue to keep end-consumer subscription prices low.
b) State 'For' and explain the revenue subsidy mechanism.

SECTION B (60 Marks)

(Attempt any four questions from this section)

Question 5

(a) What are Overheads or Indirect expenses? Mention three types of Overheads with an example of each. [5 Marks]

Answer:
Overhead or indirect expenses are those expenses which cannot be charged directly to production or identified with a specific product or job. They are incurred for general administration, selling, or factory operations as a whole.
Three types of overhead expenses are:
1. Factory Overheads: Expenses incurred in the factory for manufacturing operations. Example: Consumable stores like lubricants and grease used for machinery.
2. Office Overheads: Expenses incurred in the administration and management of the business. Example: Office rent and salary of office manager.
3. Selling Overheads: Expenses incurred in promoting, selling, and distributing goods and services. Example: Advertising expenses and sales commission.

Teacher's Note:
a) Distinguish clearly between direct expenses and indirect overheads.
b) Provide correct and distinct examples for factory, office, and selling overheads to secure all 5 marks.

(b) 'Intense competition in the corporate world has led to the emergence of advertising as a vital tool for corporate survival'. Do you agree with this statement? Support your answer by citing reasons. [5 Marks]

Answer:
Yes, intense competition in the corporate world has made advertising a vital tool for survival. The reasons are:
1. Product Awareness: With numerous producers offering similar products, advertising provides relevant information to consumers about features and availability.
2. Bridging Gap: It acts as an effective communication link between producers and consumers.
3. Demand Creation: Persuasive advertising creates continuous demand for products, facilitating mass production and distribution.
4. Brand Loyalty: Advertising helps build brand image and customer loyalty, protecting market share against rival firms.
5. Market Expansion: It educates prospective buyers, thereby expanding the overall market size for the industry.

Teacher's Note:
a) Advertising is no longer optional; it is a strategic necessity in monopolistic and competitive markets.
b) Present at least four distinct arguments supporting the role of advertising in corporate survival.

(c) Explain the following:
(i) Principle of Prudence.
(ii) Money Measurement Concept. [5 Marks]

Answer:
(i) Principle of Prudence: According to this accounting convention, all anticipated or expected losses must be recorded in the books of accounts as soon as foreseen, but all anticipated or unrealized gains should be ignored. Example: Valuing closing stock at cost or market price, whichever is lower.
(ii) Money Measurement Concept: According to this concept, only those transactions and events that can be measured and expressed in terms of money are recorded in accounting books. Qualitative events, however important, are excluded if monetary value cannot be assigned to them.

Teacher's Note:
a) Both are fundamental accounting concepts prescribed under GAAP.
b) Give suitable accounting examples for each concept to demonstrate thorough understanding.

Question 6

(a) What is the Penetrating Pricing Policy? Discuss its pros and cons. [5 Marks]

Answer:
Penetrating Pricing Policy is a strategy where low initial prices are set for a new product to make the brand popular rapidly, capture a large market share, and discourage new competitors.
Pros:
1. Yields high sales turnover and offers economies of scale.
2. Restricts the entry of new competitors due to low profit margins initially.
3. Ensures immediate market acceptance as common consumers can afford the product.
4. Prolongs product lifecycle stages after introduction.
Cons:
1. May generate overwhelming demand that the producer cannot meet.
2. Low price may lead consumers to misinterpret the product as low quality.
3. Difficult to raise prices later when production costs increase.
4. May result in inadequate profit margins for the producer and dealers.

Teacher's Note:
a) Penetration pricing is ideal for price-sensitive mass markets with elastic demand.
b) Students must balance the answer by providing both advantages and disadvantages.

(b) Elucidate the selection procedure for a vacancy in an organization. [5 Marks]

Answer:
The selection procedure for filling a vacancy in an organization involves the following successive steps:
1. Preliminary Interview: Conducted to check minimum qualifications, experience, and age.
2. Application Form: Candidates fill out a prescribed form giving personal and career details.
3. Employment Test: Tests conducted to evaluate specific skills, aptitude, and intelligence.
4. Selection Interview: Face to face interaction to verify information and assess communication skills.
5. Checking References: Verifying character and past performance details provided by referees.
6. Medical Examination: Ensures physical fitness for the job.
7. Final Approval and Appointment: Final selection by departmental heads followed by issuance of appointment letters.

Teacher's Note:
a) Selection is a negative process aimed at eliminating unsuitable candidates.
b) Steps should be written in logical chronological order.

(c) Briefly explain any five Consumer Rights. [5 Marks]

Answer:
Five Consumer Rights under the Consumer Protection Act are:
1. Right to Safety: Protection against products and services that are hazardous to health and life.
2. Right to be Informed: Right to have complete information regarding quality, quantity, price, and purity of goods to protect against unfair trade practices.
3. Right to Choose: Freedom to choose from an assortment of products at competitive prices.
4. Right to be Heard: Right to voice grievances and seek redressal at appropriate consumer forums.
5. Right to Consumer Education: Right to acquire knowledge and awareness to be an informed consumer throughout life.

Teacher's Note:
a) Consumer rights empower buyers against exploitation by manufacturers and traders.
b) List all five requested rights with concise explanations.

Question 7

(a) Describe the procedure adopted for opening a Saving Bank Account with a Commercial Bank. [5 Marks]

Answer:
The procedure for opening a Savings Bank Account involves:
1. Application in Prescribed Form: Filling out the account opening form with personal details, occupation, and address.
2. Introduction: Introduction of the applicant by an existing account holder of the bank to verify identity.
3. Specimen Signature: Signing on a signature card to enable the bank to verify signatures on cheques.
4. Photograph: Submitting passport size photographs for identity card and account records.
5. Initial Deposit: Depositing the minimum required initial amount to activate the account, after which passbook and chequebook are issued.

Teacher's Note:
a) Know Your Customer (KYC) norms are strictly followed in modern banking procedures.
b) Outline the steps clearly in sequential order.

(b) Briefly explain any five factors responsible for the destruction of the eco system. [5 Marks]

Answer:
Five factors responsible for ecosystem destruction are:
1. Population Growth: Rapid population increase leads to deforestation, soil erosion, and depletion of natural resources.
2. Transport Expansion: Extensive road networks cause habitat fragmentation and loss of wildlife species.
3. Tourism: Unregulated tourism in virgin ecological zones causes pollution, loss of fresh water, and habitat degradation.
4. Intensive Agriculture: Excessive use of chemical fertilizers and pesticides degrades soil quality and disrupts food chains.
5. Industrialization: Industrial growth leads to massive deforestation, water contamination from toxic wastes, and air pollution.

Teacher's Note:
a) Environmental degradation is a major global concern linked directly to commercial and human activities.
b) Provide five distinct and well-explained causative factors.

(c) List the advantages and disadvantages of using radio services as a form of advertising media. [5 Marks]

Answer:
Advantages of Radio Advertising:
1. Wide coverage, making it convenient for the masses.
2. Highly effective in rural areas, reaching illiterate and lower-income segments.
3. High frequency of message repetition.
4. Listeners can hear advertisements while performing other tasks.
5. Effective use of audio effects, music, and interactive phone-in sessions.
Disadvantages of Radio Advertising:
1. Lack of visual impact.
2. Short lifespan with no scope for back-reference.
3. Lack of selectivity due to limited specialized channels.
4. Poor signal reception in certain industrial or remote areas.

Teacher's Note:
a) Radio is an audio medium with strong penetration in rural markets.
b) Include both advantages and disadvantages to fulfill the question requirements fully.

Question 8

(a) What is the professional and social significance of Human Resource Management? [5 Marks]

Answer:
Professional Significance of HRM:
1. Maximizes employee potential by providing healthy working environments and growth opportunities.
2. Enhances teamwork and cooperation among personnel.
3. Boosts confidence by placing the right person in the right job based on qualifications.
4. Fosters a strong sense of organizational belonging.
Social Significance of HRM:
1. Utilizes and channels manpower into productive economic activities.
2. Enhances the dignity of labor by ensuring fair placement and treatment.
3. Raises the standard of living by creating employment opportunities.

Teacher's Note:
a) HRM bridges individual employee goals with organizational objectives.
b) Ensure separate headings or points are provided for professional and social significance.

(b) Write short notes on:
(i) Importance of Packaging.
(ii) The Chernobyl disaster. [5 Marks]

Answer:
(i) Importance of Packaging: Packaging protects products from damage during transit and storage. It acts as a silent salesman by displaying product information, enhancing aesthetic appeal, differentiating products from substitutes, and offering reusability.
(ii) The Chernobyl Disaster: This catastrophic nuclear accident occurred on April 26, 1986, at the Chernobyl nuclear power plant in Ukraine. Radioactive material drifted across surrounding regions, causing thousands of casualties due to radiation sickness and long-term genetic disorders in Ukraine, Belarus, and Russia.

Teacher's Note:
a) Packaging is a crucial element of product strategy in marketing.
b) The Chernobyl disaster note must include the date, location, and consequences.

(c) Last year, Sakona Co. Ltd. came up with a unique and revolutionary Home Theatre System with amazing new features, excellent sound quality and elegant design. It was priced very high, yet it was a great success. This year the company is facing stiff competition, but is determined to acquire a huge chunk of the market share.
(i) In what stage of PLC (Product Life Cycle) is the Home Theatre System presently?
(ii) Suggest strategies that Sakona Co. Ltd. should adopt to achieve its corporate goals. [5 Marks]

Answer:
(i) The Home Theatre System is presently in the Growth Stage of the Product Life Cycle (PLC), characterized by rising competition and widening distribution.
(ii) Strategies Sakona Co. Ltd. should adopt:
1. Keep prices at a competitive level to counter rival firms.
2. Focus heavily on after-sales service to build customer loyalty.
3. Introduce newer versions and variants with improved features.
4. Increase promotional activities and advertising to strengthen brand image and market share.

Teacher's Note:
a) In the growth stage, sales rise rapidly, attracting competitors, which necessitates aggressive marketing and product differentiation.
b) Answer both sub-parts clearly with accurate PLC stage identification.

Question 9

Case Study

It is the conviction of the management of Carmel Closure Co. Ltd. that its shareholders constitute an important part of the public. The management feels that the company should devote time and effort in studying the make-up, location, economic status and demography of this group to enable better communication and a stronger public relation policy.
Mr. Ramesh Sharma is the Public Relation Officer of the company. He agrees with the Management to a certain extent, however he would like to introduce other forms of public relations programmes.

(a) Why is it imperative for a company to maintain a good relationship with its shareholders?
How should Mr. Sharma go about planning a successful programme? [5 Marks]

Answer:
It is imperative to maintain a good relationship with shareholders because they contribute share capital and bear the ultimate risk of loss. They are the legal owners of the company.
Planning a successful shareholder relations programme:
1. Provide current financial information and future prospects in simple, understandable language.
2. Organize shareholder relation meets and update them regularly.
3. Promote long-term investment loyalty, reducing dissatisfaction and opposition to management policies.

Teacher's Note:
a) Shareholders provide risk capital and deserve transparent communication.
b) Address both parts of the question: the rationale and the planning method.

(b) Mention two other public relations programmes that would be of paramount importance to the company. Give reasons to support your answer. [5 Marks]

Answer:
Two other vital public relations programmes are:
1. Employee Relations Programme: Giving employees equal opportunities and a voice in management. Reason: A two-way communication channel between management and workers increases productivity and cooperation.
2. Consumer Relations Programme: Establishing sincere concern for consumers. Reason: Consumers determine the success or failure of an enterprise; regular communication through meetings, surveys, and literature builds brand goodwill.

Teacher's Note:
a) Employees and consumers are key internal and external stakeholders in public relations.
b) Provide clear reasons for why each stakeholder group requires a dedicated PR focus.

(c) How would you explain to Mr. Sharma about the element 'Empathy' as being one of the key elements to establish good public relations? [5 Marks]

Answer:
Empathy means looking at things from another person's point of view, leading to better mutual understanding. In public relations:
1. It is foundational for establishing trust and rapport with the public.
2. It involves seeing and feeling matters as stakeholders do, which builds public confidence and company goodwill.
3. It helps appreciate the company's perspective positively while maintaining an atmosphere of faith, trust, and mutual respect.

Teacher's Note:
a) Empathy transforms mechanical communication into meaningful human connection.
b) Highlight how empathy bridges corporate goals with public expectations.

Question 10

Case Study

Ardent Aptec Ltd. is a telecommunication company. It gives top priority to employee training. The company believes that training contributes to a permanent relationship between superiors and subordinates. The company environment provides conditions favourable to learning and career growth. It also considers it as a continuous process.
The recruitment policy of the company is focused on campus recruitment and hence special steps are taken to ensure that the employees acquire the necessary skills. The accelerated rate of technological changes in the telecommunication industry has led to greater focus on retraining employees.
In addition to in-house training facilities, the company makes use of training programmes run by various technical and management institutes.

(a) Discuss any three types of training that can be undertaken by Ardent Aptec Ltd. [5 Marks]

Answer:
Three types of training that can be undertaken are:
1. Coaching: Instruction given by supervisors or experienced workers on the job. It is economical and fosters good superior-subordinate relations.
2. Lectures, Seminars and Conferences: Attending educational sessions to learn new technological developments and industry trends.
3. Job Rotation: Periodically rotating trainees across different jobs to broaden their knowledge, skills, and organizational outlook.

Teacher's Note:
a) Training methods should match the skill requirements of a dynamic tech industry.
b) Mention three distinct and valid training types.

(b) Why does Ardent Aptec Ltd. think it is important to train employees? [5 Marks]

Answer:
Ardent Aptec Ltd. considers training important because:
1. It enhances manpower efficiency and job performance.
2. It helps workers cope with rapid technological advancements in telecom.
3. It boosts employee morale to handle complex workplace situations.
4. Well-trained employees require less supervision, reducing supervisory costs.
5. It increases operational efficiency and the probability of business expansion.

Teacher's Note:
a) Training is an investment in human capital yielding long-term organizational benefits.
b) Provide multiple valid justifications based on the case study context.

(c) Discuss any three training methods that may be adopted by Ardent Aptec Ltd. [5 Marks]

Answer:
Three training methods that may be adopted are:
1. Lectures, Seminars and Conferences: Employees attend professional meets to learn industry updates and refresh knowledge.
2. Vestibule Training: Training conducted away from the actual workplace in an artificial setup to eliminate initial nervousness and teach correct operational methods.
3. Sensitivity Training: Focuses on self-awareness, understanding personal weaknesses, and promoting team spirit among workers.

Teacher's Note:
a) Methods like vestibule training are especially useful for technical staff handling delicate equipment.
b) Ensure distinct methods are described accurately with professional terminology.