ICSE Class 10 Commercial Studies Board Exam Question Paper 2015 with Solutions

ICSE Class 10 Commercial Studies Board Exam Question Paper with Solutions

SECTION A

Question 1
Distinguish between:

(a) Advertising and Publicity. [2 Marks]

Answer:
1. Advertising is related to only commercial information to the public while publicity may or may not be related with the communication of commercial information.
2. Advertising aims only economic benefits while publicity aims both social and economic benefits.

Teacher's Note:
a) Focus on the commercial purpose and sponsorship aspect to clearly differentiate between the two.
b) Students often confuse publicity with advertising; remember that publicity is not directly sponsored by the concerned business.

(b) Stakeholders and Customers. [2 Marks]

Answer:

Teacher's Note:
a) Stakeholders include shareholders, creditors, employees, and promoters who have a direct interest in the organization's existence.
b) Ensure clarity on the transactional nature of customers versus the vested financial interest of stakeholders.

(c) Marketing and Sales. [2 Marks]

Answer:
1. Marketing is customer oriented, whereas selling is product oriented.
2. The main aim of marketing is to earn profits through maximum customer satisfaction whereas selling aims at earning maximum profits by increasing the volume of sales.

Teacher's Note:
a) Marketing is a broader concept that starts before production and continues after sales, while selling is a narrow part of marketing.
b) Highlight the core distinction in orientation, which is customer focus versus product focus.

(d) Controllable Costs and Uncontrollable Costs. [2 Marks]

Answer:
The cost which can be easily and effectively controlled by the person responsible at organization level are termed as controllable costs. On the other hand, the costs which cannot be easily and effectively controlled by the person responsible are termed as uncontrollable costs.

Teacher's Note:
a) Controllable costs are typically managed at lower and middle management levels.
b) Uncontrollable costs are usually fixed or dependent on external economic factors beyond the immediate operational control.

(e) The Central Bank and a Commercial Bank. [2 Marks]

Answer:

Teacher's Note:
a) The Central Bank acts as the apex monetary authority, while commercial banks deal directly with the general public.
b) State the ownership and primary objective clearly to secure full marks.

Question 2

(a) What is meant by "Recruitment"? [2 Marks]

Answer:
Recruitment involves searching for prospective employees and stimulating them to apply while selection involves comparing and choosing suitable candidates.

Teacher's Note:
a) Recruitment is a positive process as it aims to attract a large number of applicants.
b) Students must distinguish recruitment from selection; recruitment only invites applications, whereas selection filters and appoints candidates.

(b) Give any two advantages of advertising by Television. [2 Marks]

Answer:
1. On television, products can be demonstrated and their use can be explained.
2. Advertisement on television reaches a vast and wide audience simultaneously through audio-visual appeal.

Teacher's Note:
a) The audio-visual combination makes television advertising highly effective and impactful.
b) Ensure both advantages focus distinctively on the medium of television rather than general advertising.

(c) Briefly explain the term "Insurance". [2 Marks]

Answer:
Insurance is a means of spreading risks. It involves pooling of risks. A group of people who are subject to an insurable risk contribute regularly and the fund so created is utilised to compensate those unfortunate few members of the group who actually suffer a loss due to some unexpected calamity. In this way, the loss of a few is shared by all members on an equitable basis. Insurance is a social device for pooling and dividing risks among a large number of persons.

Teacher's Note:
a) Mention both the risk-pooling aspect and the cooperative nature of insurance.
b) Keywords like spreading of risk, pooling of resources, and compensation must be included.

(d) Give two advantages of Marketing Research. [2 Marks]

Answer:
1. Marketing research helps to measure market potential, characteristics of the market and share of the market for a particular firm or brand. It tells management where the company stands in industry.
2. Business firms can use marketing research to study changes in consumers' tastes and preferences. This information is helpful in making necessary improvements in existing products and in designing and developing new products.

Teacher's Note:
a) Marketing research provides empirical data for sound managerial decision-making.
b) Highlight customer preference analysis and market sizing as key practical benefits.

(e) What is meant by Environmental Ethics? [2 Marks]

Answer:
Ethics is concerned with the principal of right conduct. It is the entire body of moral values and values are the language of ethics. Environmental values refer to the moral standards which people are expected to follow while interacting with nature and its resources. Environmental values make people environmentally conscious.

Teacher's Note:
a) Environmental ethics deals with human duties and moral responsibilities toward the preservation of nature.
b) Mention the connection between moral conduct and ecological balance.

Question 3

(a) What is a Trade Union? [2 Marks]

Answer:
Trade union is the association of workers for maintaining and improving the conditions of their working lives and securing them a better status in the industry and the society. Workers form unions in order to resist employer's exploitation and protect and safeguard their interests.

Teacher's Note:
a) A trade union is a voluntary association of employees formed to collectively bargain with employers.
b) Focus on the twin objectives of protecting workers' rights and improving their working conditions.

(b) Enumerate two types of Warehouses found in India. [2 Marks]

Answer:
1. Private Warehouses: These warehouses are owned by manufacturers and traders to store the goods produced or purchased by them until they are sold out.
2. Public Warehouses: Public warehouses may be owned by Government, public trusts and other public authorities where any businessman can store goods for a charge.

Teacher's Note:
a) Other valid types include bonded warehouses, cooperative warehouses, and government warehouses.
b) Clearly state the ownership and accessibility features for each type mentioned.

(c) Explain the term "Budget". [2 Marks]

Answer:
A budget is a plan expressed in quantitative or monetary terms for a specific period of time, usually one year. It is a financial statement prepared prior to a defined period of time, of the policy to be purchased during that period for the purpose of attaining a given objective.

Teacher's Note:
a) A budget serves both as a planning tool and a control mechanism for business operations.
b) Emphasize that it is forward-looking and expressed in quantitative terms.

(d) Give two advantages of Rail Transport over Road Transport. [2 Marks]

Answer:
1. Railway transport is more suitable for carrying bulky and heavy goods over long distances whereas road transport is less economical for such cargo.
2. Rail transport remains relatively unaffected by rain, floods, fog etc. whereas road transport becomes severely affected.

Teacher's Note:
a) Railways offer higher carrying capacity and greater speed over long hauls.
b) Mention weather resilience and heavy load capacity as primary advantages.

(e) Name any two forms of Non-Verbal Communication. [2 Marks]

Answer:
1. Proximics: Use of interpersonal space in communication.
2. Aural Communication: Aural or auditory methods of communication which are heard, such as bells, buzzers, horns, and whistles.

Teacher's Note:
a) Non-verbal communication transmits messages without the use of spoken or written words.
b) Other acceptable examples include body language, facial expressions, and sign language.

Question 4

(a) Write a short note on Recurring Deposits. [2 Marks]

Answer:
Recurring Deposit Account: In this type of account, a customer is allowed to deposit a certain amount of money every month for a specified period of time. At the end of the period, he is given the total deposit amount along with interest at the prescribed rate. Withdrawal and cheque facilities are not available in this account. A pass book showing the installments deposited by the customer is issued.

Teacher's Note:
a) This account promotes regular savings habits among individuals of modest means.
b) Emphasize that premature withdrawals are generally restricted and interest is paid upon maturity.

(b) Briefly explain the term "Pension". [2 Marks]

Answer:
Pension is a periodic payment made to an employee after retirement from service as a reward for past services rendered, or to their family in case of premature death while in service, providing long-term recurring financial assistance.

Teacher's Note:
a) It acts as a social security measure for employees post-retirement.
b) Clearly mention that it serves as regular financial support after the cessation of active employment.

(c) Mention any two factors to be kept in mind while determining the price of a product. [2 Marks]

Answer:
1. Cost of production and distribution of the product.
2. Degree of competition in the market and government regulations.

Teacher's Note:
a) Pricing decisions directly affect the revenue and market share of the enterprise.
b) Other valid factors include demand, marketing objectives, and purchasing power of consumers.

(d) Give two measures to ensure the sustainable use of resources. [2 Marks]

Answer:
1. Sustainable Use of Water: Encourage and improve traditional methods of rainwater harvesting, storage, and use of drip irrigation in agriculture.
2. Sustainable Use of Energy: Use alternative sources of fuel such as solar energy, biogas, and develop fuel-efficient appliances.

Teacher's Note:
a) Sustainable resource management ensures that resources meet current needs without compromising future availability.
b) Concrete environmental conservation examples like rainwater harvesting and solar energy are valued by examiners.

(e) State any two demerits of Advertising. [2 Marks]

Answer:
1. Manufacturers and traders charge higher prices from consumers to recover the massive money spent on advertising.
2. Advertising is often deceptive and misrepresents facts to the consumer, leading to purchase of inferior goods.

Teacher's Note:
a) High advertising expenditure often adds to the economic burden of the final consumer.
b) Point out consumer manipulation and misleading claims as core criticisms.

SECTION B

Question 5

(a) Briefly explain the five main objectives of Marketing. [5 Marks]

Answer:
1. Customer satisfaction: The primary objective of marketing is to satisfy the needs of consumers by producing the right products and services at the right time, right place and right price.
2. Profitability: A business enterprise must earn profits through customer satisfaction to ensure survival and growth.
3. Coordination and integration: Marketing must bring about effective coordination between product, price, promotion, distribution, and other business activities.
4. Service to society: Marketing should focus on improving the quality of living of people by providing quality products at reasonable prices and conserving resources.
5. Creation of Demand: Marketing identifies customer needs and preferences to create demand for goods and services.

Teacher's Note:
a) Outline all five distinct objectives clearly with brief explanations.
b) Emphasize customer satisfaction as the cornerstone of modern marketing philosophy.

(b) Explain any two methods of On-the-Job Training. [5 Marks]

Answer:
1. Job Instruction Training (JIT): This is step-by-step training where trainees are prepared, instructions are presented, trainees try out the job, and follow-up assistance is provided.
2. Apprenticeship Training: Under this method, trainees learn by working with those who are already skilled in their jobs over a period ranging from 2 to 5 years, combining classroom theory with practical guidance.

Teacher's Note:
a) On-the-job training is conducted while the employee is actively performing work tasks.
b) Provide clear procedural steps for JIT and structural details for apprenticeship.

Question 6

(a) Distinguish between Capital Expenditure and Revenue Expenditure. [5 Marks]

Answer:
1. Earning Capacity: Capital expenditure increases the earning capacity of the business whereas revenue expenditure does not increase earning capacity but maintains existing capacity.
2. Period of Benefit: Capital expenditure benefits extend to more than one year, whereas revenue expenditure benefits extend only to the current year.
3. Accounting Treatment: Capital expenditure is shown in the Balance Sheet as an asset, whereas revenue expenditure is shown as an expense in Trading or Profit and Loss Account.
4. Nature: Capital expenditure is non-recurring, while revenue expenditure is recurring in nature.
5. Effect on Assets: Capital expenditure leads to an increase in fixed assets, whereas revenue expenditure does not result in asset value appreciation.

Teacher's Note:
a) Present differences across multiple clear parameters such as nature, accounting treatment, and benefit period.
b) Ensure all points accurately reflect financial accounting principles.

(b) Explain any two principles of Insurance. [5 Marks]

Answer:
1. Utmost Good Faith: Both parties to the insurance contract must disclose all material facts accurately. Concealment or misrepresentation of facts makes the contract voidable.
2. Insurable Interest: The insured must have a financial interest in the subject matter insured, meaning they benefit from its existence and suffer loss from its destruction. No one can insure a stranger's property.

Teacher's Note:
a) Principles of insurance form the legal foundation of insurance contracts.
b) Use appropriate examples such as health/age disclosure for utmost good faith and ownership for insurable interest.

Question 7

(a) Explain any two Internal sources of Recruitment. [5 Marks]

Answer:
1. Promotions: Vacancies at higher levels are filled by promoting deserving employees working at lower levels, carrying higher status and salary.
2. Transfers: Shifting an employee from one branch, factory, or office to another to fill a vacancy without any change in status, salary, or responsibilities.

Teacher's Note:
a) Internal sources boost employee morale and reduce induction costs.
b) Clearly distinguish between vertical movement (promotion) and horizontal movement (transfer).

(b) Explain any two functions of the Central Bank of the country. [5 Marks]

Answer:
1. Issue of Currency Notes: The central bank holds a monopoly in issuing legal tender currency notes, ensuring uniformity in note circulation and public confidence.
2. Credit Control: The central bank regulates both quantitatively and qualitatively the credit-granting capacity of commercial banks to maintain price and foreign exchange stability.

Teacher's Note:
a) The central bank is the supreme monetary institution of the country.
b) Emphasize its regulatory role over commercial banks and currency administration.

Question 8

(a) Give any five expectations of Creditors from a Business Enterprise. [5 Marks]

Answer:
1. A fair and regular return in the form of interest on their capital.
2. Capital appreciation in the value of their investment.
3. Accurate, up-to-date and regular financial information regarding the health of the company.
4. Timely repayment of loans.
5. A strong public image and reputation of the company.

Teacher's Note:
a) Creditors provide short-term or long-term financial credit and expect safety and timely servicing of debt.
b) List expectations clearly from a financial stakeholder perspective.

(b) State any five codes of conduct adopted in the field of Advertising. [5 Marks]

Answer:
1. Advertising should conform to the laws of the country and must not offend morality, decency, or religious susceptibilities.
2. No advertisement shall exploit national emblems, constitutional symbols, or personalities of national leaders.
3. Advertisements must not be wholly or mainly of a religious or political nature or related to industrial disputes.
4. Commercial telecasting must comply with the Code of Ethics for Advertising in India.
5. The code is subject to modifications issued by the Government of India from time to time.

Teacher's Note:
a) Ethical advertising standards protect consumers from misinformation and preserve social harmony.
b) Memorize key regulatory points governing public media and decency norms.

Question 9

(a) What is meant by "Barriers to effective Communication"? Explain any four barriers. [5 Marks]

Answer:
Obstructions, bottlenecks, or hurdles that hinder the smooth flow and understanding of communication between sender and receiver are called barriers to communication.
Four barriers are:
1. Physical Barriers: Physical distance, environmental noise, and equipment defects causing distortion.
2. Status Barriers: Positional hierarchy in an organization restricting free upward or downward information flow.
3. Lack of Mutual Trust: Absence of faith between sender and receiver leading to biased or restricted transmission.
4. Premature Evaluation: The tendency to form judgments before receiving the complete message.

Teacher's Note:
a) Effective communication requires clear transmission and correct interpretation of ideas.
b) Explain both the definition and four distinct operational barriers clearly.

(b) Explain five main rights of consumers as provided in the Consumer Protection Act, 1986. [5 Marks]

Answer:
1. Right to Safety: Protection against marketing of goods hazardous to life and property.
2. Right to Choose: Access to a variety of goods at competitive prices with free choice.
3. Right to be Informed: Information about quality, potency, purity, standard, and price of goods.
4. Right to be Heard: The right to register grievances and be heard at appropriate consumer forums.
5. Right to Seek Redressal: The right to get claims and complaints settled against unfair trade practices, including replacement or repair of unsatisfactory products.

Teacher's Note:
a) The Consumer Protection Act safeguards consumer interests against exploitation.
b) List the rights systematically with appropriate legal headings.

Question 10
Prepare a Trading, Profit & Loss Account and Balance Sheet of M/s Jindal Enterprises for the year ended 31st March, 2011 from the following Trial Balance.
The Closing Stock on 31st March was valued at Rs. 26,000. [10 Marks]

[Figure: Trial Balance table as on 31st March, 2011 showing Capital Rs. 20,000 (Cr.), Drawings Rs. 1,500 (Dr.), Cash at Bank Rs. 1,400 (Dr.), Purchases Rs. 22,000 (Dr.), Sales Rs. 45,000 (Cr.), Returns Rs. 2,000 (Dr.) and Rs. 1,000 (Cr.), Discount Rs. 400 (Dr.), Carriage Outwards Rs. 600 (Dr.), Salaries Rs. 6,000 (Dr.), Trade Expenses Rs. 1,200 (Dr.), Opening Stock Rs. 5,000 (Dr.), Bad Debts Rs. 600 (Dr.), Rent Rs. 1,500 (Dr.), Machinery Rs. 36,000 (Dr.), Furniture Rs. 5,000 (Dr.), Debtors Rs. 5,000 (Dr.), Creditors Rs. 10,000 (Cr.), Stationery Rs. 2,500 (Dr.), Commission Rs. 300 (Cr.), Bank Loan Rs. 14,400 (Cr.). Trial balance totals: Debit Rs. 90,700, Credit Rs. 90,700.]

Answer:

Trading and Profit & Loss A/c for the year ending 31st March, 2011

Balance Sheet of M/s Jindal Enterprises as on 31st March, 2011

Working Notes:
1. Net Sales = Rs. 45,000 - Rs. 2,000 (Returns) = Rs. 43,000.
2. Net Purchases = Rs. 22,000 - Rs. 1,000 (Returns) = Rs. 21,000.
3. Gross Profit = (Sales + Closing Stock) - (Opening Stock + Purchases + Direct Expenses) = (43,000 + 26,000) - (5,000 + 21,000 + 600) = Rs. 42,400.
4. Net Profit = Gross Profit + Indirect Incomes - Indirect Expenses = (42,400 + 300) - (600 + 1,500 + 1,200 + 400 + 2,500 + 6,000) = Rs. 30,500.

Teacher's Note:
a) Ensure correct classification of items into Trading account, Profit & Loss account, and Balance Sheet.
b) Remember to deduct drawings and add net profit to capital on the liabilities side of the Balance Sheet.