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

ICSE Class 10 Commercial Studies Board Exam Question Paper with Solutions

SECTION A

Question 1
Distinguish between:

(a) Variable Cost and Semi-Variable Cost. [2 Marks]

Answer:

Teacher's Note:
a) Core Concept: Students must clearly state that variable costs fluctuate directly with the volume of production, whereas semi-variable costs have both fixed and variable elements.
b) Common Mistake: Students often fail to give appropriate real-world examples for semi-variable costs like electricity bills or telephone rentals.

(b) Savings Account and Current Account. [2 Marks]

Answer:

Teacher's Note:
a) Core Concept: Savings accounts are meant for individuals to save surplus income, while current accounts are designed for businessmen who make frequent transactions.
b) Common Mistake: Students forget to mention that current accounts generally do not earn any interest and may carry incidental charges.

(c) A Private Warehouse and a Public Warehouse. [2 Marks]

Answer:

Teacher's Note:
a) Core Concept: Private warehouses are operated for exclusive use by the owner, whereas public warehouses offer storage facilities to the general public on a rental basis.
b) Common Mistake: Confusing ownership and control aspects between private and public warehousing facilities.

(d) A Production Budget and a Sales Budget [2 Marks]

Answer:

Teacher's Note:
a) Core Concept: Sales budget is the starting point of all functional budgets and predicts revenue, while production budget is derived from the sales budget to plan manufacturing output.
b) Common Mistake: Students mix up the primary objective of each budget regarding inventory and revenue forecasting.

(e) A Brand and a Grade. [2 Marks]

Answer:

Teacher's Note:
a) Core Concept: Branding gives an identity and differentiation to a product in the market, whereas grading involves classification based on quality, size, or physical characteristics.
b) Common Mistake: Treating branding and grading as interchangeable marketing terms.

Question 2

(a) Give any two methods used for On-the-Job training. [2 Marks]

Answer:
1. Coaching: Under this method the employee is trained on-the-job by his immediate superior.
2. Job Rotation: Under this method the employee is moved from one job to another at planned period of time. This exposure at different levels, makes the employee multi-dimensional.

Teacher's Note:
a) Core Concept: On-the-job training takes place at the actual workplace where the employee learns while working.
b) Common Mistake: Mentioning off-the-job training methods like lectures or vestibule training instead.

(b) Explain 'Indirect Cost'. [2 Marks]

Answer:
Indirect Cost: It refers to those expenses which are not directly absorbed or chargeable in the process of production, e.g., rent of a factory building.

Teacher's Note:
a) Core Concept: Indirect costs cannot be easily or directly traced to a specific product or cost unit.
b) Common Mistake: Failing to provide a proper business example like factory rent or administrative salaries.

(c) Why is gratuity given by an employer to an employee? [2 Marks]

Answer:
Gratuity is a time based benefit given to an employee when he leaves his employment after having worked under a specific employer for certain number of years. It is a voluntary payment made by an employer to his employees as a loyalty bonus who retires or leaves the service after a long period of time with a dedicated service record. It grants security to the employees against the risk of old age.

Teacher's Note:
a) Core Concept: Gratuity acts as a retirement benefit and a token of appreciation for long-term loyal service rendered by the employee.
b) Common Mistake: Confusing gratuity with provident fund or regular salary.

(d) What is Trademark? [2 Marks]

Answer:
Trade Mark: When a Brand name, mark or a symbol is legally registered it becomes a trade mark. Trade mark gives sellers exclusive rights to use the brand name or mark.

Teacher's Note:
a) Core Concept: Legal registration provides statutory protection to a brand, preventing unauthorized use by competitors.
b) Common Mistake: Omitting the legal registration aspect, which distinguishes a mere brand name from a legally protected trademark.

(e) Give two examples of efficient and eco-friendly technology. [2 Marks]

Answer:
1. Energy efficient technology is a form of eco-friendly technology because with increasing amount of coal or oil being used, not only will exhaust them but also increases the rate of greenhouse gases. This is one main reason for adopting fuel efficient technology in almost all sectors of industry, which results in saving the natural resources for a longer time, providing alternate choice other than them.
2. Recycling is reusing substances or products. It is an efficient and environment friendly measures to conserve raw materials and nature, e.g., paper industry which turns waste paper into new paper products.

Teacher's Note:
a) Core Concept: Eco-friendly technologies minimize environmental degradation, reduce carbon footprints, and promote sustainable resource utilization.
b) Common Mistake: Writing generic steps without explicitly mentioning technologies or processes like renewable energy or recycling plants.

Question 3

(a) State two expectations of Competitors or Associates from a business concern / enterprise. [2 Marks]

Answer:
1. To adopt fair trade practices regarding price, quality and service.
2. To promote co-operation and healthy competition.

Teacher's Note:
a) Core Concept: Business enterprises must respect market ethics and maintain healthy relations with peer organizations.
b) Common Mistake: Confusing competitor expectations with customer or employee expectations.

(b) Give any two suggestions to draw the attention of viewers to an advertisement of a product / service marketed by your company. [2 Marks]

Answer:
1. It should have an conviction value to attract the attention of the viewers, otherwise without being noticed it would be a wasteful expenditure.
2. A good advertisement should educate the people by providing adequate knowledge about the product or service, which could help the potential customers to reach a buying decision and ease the usage after buying it.

Teacher's Note:
a) Core Concept: An effective advertisement must capture immediate attention and possess strong persuasive and informative appeal.
b) Common Mistake: Giving vague suggestions instead of focusing on advertising attributes like attention value and educational content.

(c) Briefly explain the concept 'Marketing Research'. [2 Marks]

Answer:
Marketing research is the systematic and objective collection, analysis, and interpretation of data relating to marketing goods and services to help managers make informed decisions.

Teacher's Note:
a) Core Concept: It bridges the gap between the producer and the consumer by identifying market trends and consumer preferences.
b) Common Mistake: Confusing marketing research with mere advertising or sales promotion.

(d) What is meant by 'the Clearing House Function' of the Reserve Bank of India? [2 Marks]

Answer:
Clearing House Function of RBI: RBI settles the claims of commercial banks through a process of book entry in their respective accounts with RBI. It reduces the chances of financial crisis due to cash withdrawal when it is needed more.

Teacher's Note:
a) Core Concept: Central banks facilitate inter-bank transactions and check clearances centrally to economize on the use of cash.
b) Common Mistake: Failing to mention the mechanism of book entries and accounts settlement between commercial banks.

(e) Explain the term Brand Equity. [2 Marks]

Answer:
Brand Equity: It means the economic value associated with a brand strength to gain more and more brand loyalty. It gives an opportunity to capture and maintain a consistent market share. It provides stability to an organisation's sales volume and stands for a certain level of quality in a customer's mind.

Teacher's Note:
a) Core Concept: Brand equity represents the intangible premium value that a brand name adds to a product.
b) Common Mistake: Defining brand equity simply as a brand name without acknowledging its financial and consumer-loyalty dimensions.

Question 4

(a) Distinguish between a Debit Card and a Credit Card. [2 Marks]

Answer:

Teacher's Note:
a) Core Concept: Debit cards draw funds directly from the user's bank account, whereas credit cards provide a short-term credit line up to a pre-approved limit.
b) Common Mistake: Overlooking the interest aspect associated with unpaid credit card balances.

(b) State any two rights of a Consumer. [2 Marks]

Answer:
1. Right to Safety: This right protects the customers against the sale of goods which are hazardous to life and property, e.g., electrical equipments, gas cylinders etc.
2. Right to be heard: The consumer is free to register his complaint regarding the product at appropriate forums.

Teacher's Note:
a) Core Concept: Consumer rights under the Consumer Protection Act protect buyers against unfair trade practices and unsafe goods.
b) Common Mistake: Listing responsibilities instead of legal consumer rights.

(c) Write a short note on the Chipko Movement. [2 Marks]

Answer:
Chipko Movement: It is a tree-embracing movement started in April 1973 in Mandal Village in Uttarakhand against felling of trees by forest contractors. It is a spontaneous peoples movement started by the village women based upon nonviolent resistance reflecting awareness of the local people against environmental degradation. Mr. Chandi Prasad Bhatt and Mr. Sunderlal Bahuguna led the movement from the front.

Teacher's Note:
a) Core Concept: Chipko movement was a landmark grassroots environmental campaign emphasizing community forest conservation.
b) Common Mistake: Omitting the historical context, location, and prominent leaders associated with the movement.

(d) What do you understand by Audio-Visual Communication? [2 Marks]

Answer:
Audio-Visual Communication: Audio visual communication combine both sound and visual effects. The information presented through this mean gives an interesting and attractive form to it, with a greater memorising value.

Teacher's Note:
a) Core Concept: Combining audio and visual elements stimulates more human senses, leading to better retention and comprehension.
b) Common Mistake: Describing only oral or only written communication forms instead of both combined.

(e) State two advantages of Road Transport over Air Transport. [2 Marks]

Answer:
1. Door to Door Service: Road transport provides complete service by loading the goods at Consignor's place and unloading them at the consignee's place. There is also no need to wait for fall load shipment.
2. Feeder Service: Motor vehicles carry goods to terminal points e.g., air ports, railway station, sea ports. They are also used for carrying goods to outlying villages which are not connected by airways or railways.

Teacher's Note:
a) Core Concept: Road transport provides unmatched flexibility and accessibility compared to high-cost and terminal-dependent air transport.
b) Common Mistake: Focusing on speed and cost instead of service flexibility and reach.

SECTION B

(Answer any four questions from this section)

Question 5

(a) Differentiate between Shareholders and Creditors as Stake holders of a commercial organisation. [5 Marks]

Answer:

Teacher's Note:
a) Core Concept: Shareholders are owners of the company bearing residual risk, while creditors are lenders providing external debt capital.
b) Common Mistake: Failing to cover points on voting rights, return type (dividend vs. interest), and ownership status.

(b) Distinguish between oral communication and written communication. [5 Marks]

Answer:

Teacher's Note:
a) Core Concept: Oral communication emphasizes personal touch and quick feedback, whereas written communication ensures precision, legal binding, and permanence.
b) Common Mistake: Not providing structured headings for a 5-mark difference question, which affects presentation marks.

Question 6

(a) How can environment values and ethics be protected? Give reasons to support your answer. [5 Marks]

Answer:
Moral principles guiding environmental affairs are called environmental values or ethics. It is concerned with our duty towards our planet. Environmental ethics and values can be developed in children by parents, teachers and social activities.
1. Awareness and education about the importance of ecology and its conservation should be taught to the students.
2. Values are developed more through example and influence than through classroom teaching. The biographies of great men and women can inspire students to become value oriented.
3. Short stories, film shows and other audio-visual material for students and teachers are also useful.
4. Suitable training programmes for teachers and parents can be held to enable them to provide value education to young men and women.
5. All school teachers must be considered as teachers of value education. All subjects must be used to inculcate right values in students.

Teacher's Note:
a) Core Concept: Protecting environmental values requires a value-based educational approach starting from childhood through formal learning and role modeling.
b) Common Mistake: Writing only physical conservation methods instead of focusing on how moral values and ethics towards the environment are cultivated.

(b) Explain the different sources of Internal Recruitment. [5 Marks]

Answer:
Internal Sources of Recruitment:
1. Promotion: This means upgrading an employee to a position of greater responsibility and more salary on the basis of employee's seniority, merit, job knowledge and career record.
2. Transfer: This involves shifting of an employee from one job or branch to another without changing the profile and salary. It is used to fill the vacancy at the place to which the employee is transferred.
3. The employment: This refers to employing the employees who served the organisation in the past but have retired or have quit voluntarily.
4. Apprentices: Persons working as apprentices in the company may also be hired whenever a vacancy exists.
5. The existing employees can recommend their relatives or friends about the existing vacancy.

Teacher's Note:
a) Core Concept: Internal recruitment utilizes existing personnel within the organization, boosting morale and reducing orientation costs.
b) Common Mistake: Confusing internal sources with external recruitment methods like advertisements or employment exchanges.

Question 7

(a) Explain the Experimentation method of Marketing Research. [5 Marks]

Answer:
Experimentation Method of Marketing Research: Under this method consumer's behaviour, their characteristics, facts on market condition, various forces operating in the market and market trends is analysed.
Under this experimentation method, a control market is established in which all forces except those being tested are kept under check and reactions are recorded under controlled conditions to test a theory. It is based on an assumption that small scale experiment will furnish valuable information about a large scale marketing programme.

Teacher's Note:
a) Core Concept: Experimentation involves controlled market testing to observe consumer reactions and measure cause-and-effect relationships.
b) Common Mistake: Omitting key technical terms like 'control market' and 'controlled conditions'.

(b) 'Budgets are very useful in Management'. Justify. [5 Marks]

Answer:
Importance of Budgets in management: Budget are prepared on the basis of forecasts, so it gives a sound foundation to the management to think about future. It is based on the objectives to be achieved and a detailed plan of future action which makes the daily operation of a firm easy and smooth. Budgets bring efficiency and economy in the working of a business firm, by making optimum use of the available resources. It promotes the sense of responsibility among the managers, as everybody has a fixed plan of future action to be accomplished. Budgeting inculcates the team spirit which leads to uniformity of policies and united action. It is an important tool of management control, as the output can always be compared to the set standards.

Teacher's Note:
a) Core Concept: Budgets serve as financial blueprints that facilitate planning, coordination, resource allocation, and performance control.
b) Common Mistake: Treating budgeting merely as a tool for expense cutting rather than a comprehensive managerial control instrument.

Question 8

(a) Distinguish between the Principle of Indemnity and the Principle of Insurable Interest. [5 Marks]

Answer:

Teacher's Note:
a) Core Concept: Indemnity restricts compensation to actual financial loss to prevent profit-making, while insurable interest requires the insured to have a legally recognized financial stake in the subject matter.
b) Common Mistake: Confusing indemnity rules with life insurance policies where indemnity does not strictly apply.

(b) Explain the role of Commercial Banks in the Economic Development of a country. [5 Marks]

Answer:
Role of Commercial Banks in the Economic Development of a Country:
Banks mobilise small savings of the public and channelise those savings into productive purpose. This increases the flow of money in any economy, which is the life good of its growth.
The role of commercial banks in economic development rests chiefly on their role as financial intermediaries. In this capacity, commercial banks help drive the flow of investment through out the market place through several forms of lending.
It helps an individual to start his business by providing capital and necessary information and then helps in running the business and expanding it by supplying credit as and when required. The aggregate effect of business activity generates employment around the country, and promotes self dependency or financial independence.
It also helps the government of a country by financing to general welfare programmes for the benefit of the country. It also helps in transfer of funds from one place to another and help in the settlement of debts which in result promotes trade. Thus banks are the life blood of commerce and holds a significant position in the modern economy of any nation.

Teacher's Note:
a) Core Concept: Commercial banks act as the backbone of economic growth by mobilizing savings, granting credit, and facilitating trade and government welfare schemes.
b) Common Mistake: Restricting the answer only to deposit-taking functions without explaining capital formation, credit creation, and developmental roles.

Question 9

(a) Briefly explain any five factors a businessperson would consider while selecting an appropriate media to advertise his/her product. [5 Marks]

Answer:
1. Nature of the Product: The advertisement media should be in accordance with the nature of the product i.e., consumer goods or industrial goods.
2. Target Customers: Selection of media depends upon the type of target customers to be approached. The target customers are rural, urban or illiterate, males or females etc.
3. Cost of Advertisement: If the cost of advertising is lower, it may be adopted by small business enterprises. Costly advertising media will be suitable for enterprises of bigger size.
4. Nature of the Market: Fairs and exhibitions, outdoor displays and films are more useful for advertising in local markets. On the other hand, newspapers, radio and T.V. are more appropriate for advertising on a national level.
5. Life of Advertisement: Long life advertisements can better be conveyed through magazines, outdoor displays and direct mail. Short advertisements should be transmitted through newspaper, radio and T.V.

Teacher's Note:
a) Core Concept: Media selection requires balancing marketing objectives, budget constraints, target demographics, and product characteristics.
b) Common Mistake: Writing general advertising points instead of specifically linking them to media selection factors.

(b) What do you understand by 'Group Insurance'? State any three features of Group Insurance. [5 Marks]

Answer:
Group Insurance: It is a scheme which provides insurance to many people under one insurance policy. It is generally provided to the employees working under one employer. It is very economical for the employees, it terms of premium payable, as it is very less, due to the government support which encourages it as a strong tool of social security.
The three main features of it are as follows:
1. Insurance provides risk coverage to the employees as long as they remain in the service of the employer.
2. It is a contract between the insurance company and the employer.
3. The premium is generally paid jointly by the employee and the employer.

Teacher's Note:
a) Core Concept: Group insurance provides risk coverage to a large number of individuals under a single master policy, usually offered by employers to staff.
b) Common Mistake: Forgetting to explain both the definition and the specific structural features required by the question.

Question 10

From the following Trial Balance of Shri Rai Bahadur, prepare Trading, Profit & Loss Account for the year ending 31st March, 2012 and Balance Sheet as on that date. [10 Marks]

Trial balance

The closing stock on 31st March was valued at Rs. 8,760.

Answer:

Trading, Profit and Loss A/c for the year ending 31st March, 2012

Balance Sheet as on 31st March, 2012

Teacher's Note:
a) Core Concept: Final accounts require accurate classification of trial balance items into Trading, Profit & Loss, and Balance Sheet with proper adjustments for closing stock.
b) Common Mistake: Misplacing carriage or direct wages in the Profit & Loss account instead of the Trading account.