ICSE Class 10 Commercial Studies Board Exam Question Paper 2010 with Solutions

ICSE Class 10 Commercial Studies Board Exam Question Paper with Solutions

SECTION A (40 Marks)

(Attempt all questions from this Section)

Question 1:
Distinguish between:

(a) A Shareholder and a Creditor. [2]

Answer:

Teacher's Note:
a) Remember that shareholders bear the ultimate risk of the business, whereas creditors have a secure claim on the company assets.
b) Do not confuse ownership rights with lending rights when writing this distinction.

(b) Book Keeping and Accounting. [2]

Answer:

Teacher's Note:
a) Book keeping forms the base where accounting begins.
b) Students often write both terms interchangeably, which is incorrect.

(c) Receipts and Payments Account and Cash Book. [2]

Answer:

Teacher's Note:
a) Receipts and Payments account is a summary of cash and bank transactions.
b) Make sure to state the frequency and preparation criteria clearly.

(d) A Cheque and a Demand draft. [2]

Answer:

Teacher's Note:
a) Demand drafts are considered safer instruments for payment than personal cheques.
b) Clearly mention the drawer and possibility of dishonour to secure full marks.

(e) Shut down cost and sunk cost. [2]

Answer:

Teacher's Note:
a) Shut down costs relate to temporary suspension periods.
b) Sunk costs are already sunk and cannot be altered by current choices.

Question 2:

(a) What do you understand by Turnover? [2]

Answer:
Turnover refers to the number of times a business replaces or rotates its stock, accounts receivables, or capital during a given accounting period. In commercial terms, it commonly denotes the total net sales made by a business enterprise over a specific duration.

Teacher's Note:
a) Mention both sales turnover and asset turnover concepts briefly.
b) Give the formula for stock turnover ratio to gain extra clarity.

(b) Mention any two ratios on the basis of profitability. [2]

Answer:
1. Gross Profit Ratio.
2. Net Profit Ratio.

Teacher's Note:
a) Profitability ratios measure the overall efficiency and earning capacity of a business concern.
b) Operating profit ratio and return on capital employed are also valid alternatives.

(c) State any two expectations of the Government from a business concern. [2]

Answer:
1. Regular payment of taxes, duties, and statutory dues.
2. Adherence to industrial and labour laws, and avoiding monopoly or concentration of economic power.

Teacher's Note:
a) Governments expect businesses to act as responsible corporate citizens.
b) Mentioning fair trade practices and employment generation will also earn marks.

(d) State any two uses of group discussions in selecting employees for a concern. [2]

Answer:
1. It helps evaluate leadership, communication skills, and team coordination abilities of candidates which individual interviews may miss.
2. It acts as an effective screening tool to judge interpersonal behavior and problem-solving under peer pressure.

Teacher's Note:
a) Focus on behavioral traits evaluated during group dynamics.
b) Highlight how leadership and listening skills come to the forefront.

(e) Name two business organizations to which 'The Indian Companies Act, 1956', does not apply. [2]

Answer:
1. Sole Proprietorship concerns.
2. Partnership firms.

Teacher's Note:
a) The Companies Act applies strictly to incorporated companies.
b) Sole proprietorships and partnerships are governed by separate statutes or common law.

Question 3:

(a) Mention any two remedies which are available to an affected consumer, under the Consumer Protection Act. [2]

Answer:
1. Right to replacement of the defective product with a new defect-free item.
2. Right to rectification or removal of defects in the goods or services.

Teacher's Note:
a) Other remedies include refund of price paid and compensation for loss suffered.
b) Ensure exact legal terminology from the Act is used.

(b) Name any four occupations in which Child Labour is prohibited. [2]

Answer:
1. Beedi making and carpet weaving.
2. Match factories and fireworks units.
3. Auto workshops and garages.
4. Dhabas, restaurants, and hotels.

Teacher's Note:
a) Child labour is prohibited in hazardous industries and processes under the Child Labour Act.
b) Give clear examples of industries to secure full credit.

(c) Explain any two benefits of Accounting Standards. [2]

Answer:
1. They ensure consistency and uniformity in the preparation and presentation of financial statements.
2. They facilitate meaningful comparison of financial results of different accounting periods and different enterprises.

Teacher's Note:
a) Accounting standards eliminate variations in accounting treatments.
b) They enhance the credibility and reliability of financial reports for investors.

(d) State any two disadvantages of Indirect Taxes. [2]

Answer:
1. They are regressive in nature as they impose a heavier relative burden on poor people compared to the rich.
2. They increase the market price of goods and services, thereby fueling inflationary pressures.

Teacher's Note:
a) Distinguish clearly between direct and indirect tax impacts.
b) Highlight the regressive nature as the primary drawback.

(e) What is meant by Copyright? [2]

Answer:
Copyright is a legal right granted to the creator of an original literary, dramatic, musical, or artistic work, or producer of cinematograph films and sound recordings, giving them exclusive rights to use, reproduce, and authorize others to use their work.

Teacher's Note:
a) Copyright protects intellectual creations against unauthorized copying.
b) Mention that it has a specified legal duration.

Question 4:

(a) State any two objectives of marketing. [2]

Answer:
1. Creation of demand: To create and stimulate demand for goods and services by identifying consumer needs.
2. Market share: To capture and maintain a reasonable share of the total market demand through competitive strategies.

Teacher's Note:
a) Objectives should cover consumer satisfaction and organizational profitability.
b) Use standard marketing terminology like demand creation and customer retention.

(b) Name any four accounting principles. [2]

Answer:
1. Going Concern Principle.
2. Matching Principle.
3. Consistency Principle.
4. Full Disclosure Principle.

Teacher's Note:
a) Accounting principles serve as the foundational rules for financial reporting.
b) Entity concept and accrual concept are equally valid answers.

(c) What is meant by Tally? [2]

Answer:
Tally is a popular computerized accounting software package used by business enterprises to maintain books of accounts, manage inventory, handle payroll, and generate financial reports electronically.

Teacher's Note:
a) Mention its utility in business automation and financial record keeping.
b) Keep the definition concise and focused on commercial applications.

(d) What is a Patent? [2]

Answer:
A patent is a statutory monopoly right granted by the government to an inventor, giving them the exclusive legal right to make, use, or sell their new invention for a specified period of time.

Teacher's Note:
a) Patents protect technological innovations and industrial processes.
b) Differentiate patents clearly from trademarks and copyrights.

(e) Explain the effect of crossing a cheque. [2]

Answer:
1. Crossed cheques cannot be encashed across the bank counter, making payment much safer against theft or loss.
2. The payment must be collected through a bank account, thereby ensuring traceability of the payee.

Teacher's Note:
a) Crossing restricts direct cash payment over the counter.
b) Explain general vs. special crossing briefly if required.

SECTION B (40 Marks)

(Answer any four questions from this section)

Question 5:

(a) What is meant by Unfair Trade Practice? Explain any four Rights of Consumers. [5]

Answer:
Unfair Trade Practice means a trade practice which, for the purpose of promoting the sale, use, or supply of any goods or services, adopts any unfair method or deceptive practice (such as false representation, misleading advertisements, or hoarding).
The four rights of consumers are as follows:
1. Right to safety: Protection against marketing of goods and services that are hazardous to life and property.
2. Right to be informed: Being informed about the quality, quantity, potency, purity, standard, and price of goods.
3. Right to choose: Assured access to a variety of goods and services at competitive prices.
4. Right to be heard: The right to voice grievances and seek redressal at appropriate consumer forums.

Teacher's Note:
a) Quote statutory definitions where applicable for accuracy.
b) Detail all four consumer rights clearly with brief explanations.

(b) What is Marketing Demand? Explain any two methods of Marketing Research. [5]

Answer:
Marketing demand refers to the total volume of a product or service that would be bought by a defined customer group in a defined geographical area, in a defined time period, in a given marketing environment under a specific marketing program.
The two methods of marketing research are:
1. Observation Method: Observing the behavior of consumers directly or through mechanical devices in natural settings without questioning them, thus avoiding bias.
2. Experimentation Method: Establishing a controlled test market to observe consumer reactions to changes in price, packaging, or advertising under controlled conditions.

Teacher's Note:
a) Differentiate between market demand and company demand.
b) Explain both primary research methods with their respective pros and cons.

Question 6:

Explain in brief any three quantitative and any two qualitative methods adopted by the central bank to control credit. [10]

Answer:
Quantitative methods (General controls):
1. Bank Rate Policy: The rate at which the central bank rediscounts eligible bills or lends money to commercial banks. Raising it curtails credit creation.
2. Open Market Operations: Buying and selling of government securities by the central bank to regulate money supply in the economy.
3. Cash Reserve Ratio (CRR): The fraction of total deposits that commercial banks must keep with the central bank, affecting their lending capacity.
Qualitative methods (Selective controls):
1. Margin Requirements: The difference between the market value of security offered and the loan amount granted. Raising margins reduces borrowing capacity.
2. Moral Suasion: Informal advice, persuasion, and pressure exerted by the central bank on commercial banks to align their lending policies with national economic objectives.

Teacher's Note:
a) Clearly segregate quantitative and qualitative credit control instruments.
b) Explain how each method impacts commercial bank reserves and lending.

Question 7:

(a) Give five differences between Training and Education. [5]

Answer:

Teacher's Note:
a) Present differences in a tabular format for maximum clarity and scoring.
b) Cover objective, nature, and scope distinctly in the points.

(b) Explain any five uses of Performance Appraisal. [5]

Answer:
1. Promotion Decisions: Helps management identify competent employees deserving of higher responsibilities and higher grade positions.
2. Training and Development: Identifies performance gaps and training needs of individual employees.
3. Wage and Salary Administration: Provides a rational basis for determining increments, incentives, and bonus payouts.
4. Employee Feedback: Gives employees feedback regarding their strengths and areas for improvement.
5. Placement and Transfer: Assists in placing employees in jobs best suited to their capabilities or transferring them where required.

Teacher's Note:
a) Focus on administrative and developmental uses of appraisal.
b) Emphasize how appraisal links performance to organizational rewards.

Question 8:

(a) Explain five methods to improve industrial relations. [5]

Answer:
1. Sound Personnel Policies: Policies regarding compensation, transfer, and promotion must be fair, transparent, and clearly communicated.
2. Constructive Attitude: Both management and trade unions should adopt a cooperative attitude, recognizing each other as partners in progress.
3. Participative Management: Involving workers and trade unions in decision-making processes and management committees.
4. Employees Welfare: Providing safe working conditions, fair wages, housing, and medical facilities to keep employee morale high.
5. Effective Grievance Procedure: Establishing a prompt and fair mechanism for redressing employee grievances before they escalate into disputes.

Teacher's Note:
a) Industrial harmony depends on mutual trust and transparent communication.
b) Highlight worker participation and grievance handling as critical pillars.

(b) State any five features of Income and Expenditure Account. [5]

Answer:
1. It is prepared by non-trading concerns (like clubs, libraries, and hospitals) at the end of the accounting period.
2. It records only revenue items of income and expenditure relating to the current accounting period.
3. It is prepared on an accrual basis, taking into account outstanding and prepaid expenses.
4. It is structurally similar to the Profit and Loss Account of a commercial business.
5. It is a nominal account, where excess of income over expenditure is termed surplus and excess of expenditure over income is deficit.

Teacher's Note:
a) Emphasize that capital items are strictly excluded from this account.
b) Note that it follows the matching concept and accrual system.

Question 9:

Explain any five Canons of Taxation. [5]

Answer:
1. Canon of Equality: Taxes should be levied according to the ability of taxpayers to pay, meaning richer sections should pay more.
2. Canon of Certainty: The tax liability, time of payment, and manner of payment must be clear and certain to the taxpayer.
3. Canon of Convenience: The mode and timing of tax collection should be convenient to the taxpayer.
4. Canon of Economy: The cost of collecting taxes should be kept as low as possible relative to the revenue yielded.
5. Canon of Simplicity: The tax system should be simple, transparent, and easy to understand for the general public.

Teacher's Note:
a) State Adam Smith's classical canons accurately.
b) Explain how each canon ensures a sound fiscal administration.

Question 10:
Mr. Robert Shaw is the Marketing Manager of a Company which is introducing a machine which can change the wheels of bikes, cars and heavy vehicles without any help from people. The Directors have asked Mr. Shaw to give a brand name and the most suitable media to advertise the brand.

(a) Explain any four factors that Mr. Shaw should consider in selecting a suitable media to advertise. [6]

Answer:
1. Nature of the Product: Industrial machines require specialized trade journals and direct demonstrations rather than mass consumer media.
2. Target Audience: Since the product caters to automobile owners, service stations, and transport fleets, media targeting motorists and mechanics (like automotive magazines and digital displays) should be chosen.
3. Cost of Advertising: The advertising budget allocated by the company must justify the reach and frequency of the chosen medium.
4. Reach and Coverage: The medium should effectively reach the geographical markets where vehicle service workshops are concentrated.

Teacher's Note:
a) Tailor the factors specifically to the industrial machine scenario given in the prompt.
b) Discuss media selection principles comprehensively to score full marks.

(b) What is a Brand? [2]

Answer:
A brand is a name, term, sign, symbol, design, or a combination of these intended to identify the goods and services of one seller and to differentiate them from those of competitors.

Teacher's Note:
a) Mention that a registered brand becomes a trademark.
b) Give examples like Dalda or Lux to illustrate the concept.

(c) Give two factors to be kept in mind while selecting a good 'Brand' name. [2]

Answer:
1. The brand name should be short, catchy, easy to pronounce, spell, and remember.
2. It should be unique, distinctive, and suggest the utility or quality of the product.

Teacher's Note:
a) Good brand names add immense intangible value to a product.
b) Ensure the name is legally protectable and not descriptive of generic terms.