ICSE Class 10 Commercial Studies Board Exam Question Paper 2018 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) Consumer goods and Industrial goods. [2 Marks]

Answer:

Teacher's Note:
a) Consumer goods satisfy human wants directly, whereas industrial goods satisfy wants indirectly by helping in production.
b) Give clear definitions or a structured table to score full marks in distinction questions.

(b) Shut down costs and Sunk costs. [2 Marks]

Answer:

Teacher's Note:
a) Shut down costs continue even when production is temporarily halted (e.g., maintenance, security).
b) Sunk costs are irrelevant for future decision-making as they are already incurred.

(c) Standardisation and Grading [2 Marks]

Answer:

Teacher's Note:
a) Standardisation establishes uniformity in shape, size, quality, and design.
b) Grading follows standardisation when goods cannot be produced uniformly, especially agricultural products.

(d) Savings Account and Current Account [2 Marks]

Answer:

Teacher's Note:
a) Savings accounts have restrictions on the number and amount of withdrawals.
b) Current accounts offer overdraft facilities which are generally not available in savings accounts.

(e) Downward Communication and Upward Communication [2 Marks]

Answer:

Teacher's Note:
a) Downward communication is necessary for issuing directives and maintaining control.
b) Upward communication gives feedback to management and boosts employee morale.

Question 2.

(a) Why is brand loyalty considered an asset for the company ? [2 Marks]

Answer:
1. It helps to reduce costs of marketing.
2. It enables the company to charge higher prices than competing brands.
3. It gets support and cooperation from distribution channels.

Teacher's Note:
a) Brand loyalty creates a stable and predictable demand for products.
b) Students should write at least two distinct points to secure full marks.

(b) How does 'Status barrier' affect Effective Communication? [2 Marks]

Answer:
Status means the position of a person in the hierarchy of an organisation. In this barrier, the superior may pass selected information to his subordinates in order to maintain status difference, which causes distortion in effective communication.

Teacher's Note:
a) Subordinates may also hesitate to communicate freely due to fear or awe of superior status.
b) Clearly mention the hierarchical gap as the root cause of this barrier.

(c) What do you mean by 'Indirect material'? Give two examples. [2 Marks]

Answer:
Indirect materials are those materials which cannot be directly assigned to a specific product but can be apportioned. It is used in the factory, office, or selling and distribution division. For example: oil lubricants, nails, stationery material, cotton waste, etc. (any two).

Teacher's Note:
a) Direct material becomes an integral part of the finished product, whereas indirect material aids the manufacturing process.
b) Do not forget to provide examples as explicitly asked in the question.

(d) 'Selection is a negative process.' Explain. [2 Marks]

Answer:
Selection is the process of choosing individuals who have the requisite qualifications to fill jobs. Selection is called a negative process because it involves rejecting many unsuitable candidates to choose the few suitable applicants, where the number of rejected candidates is much more than those actually selected.

Teacher's Note:
a) Contrast this with recruitment, which is termed a positive process because it attracts more applicants.
b) Explain the elimination aspect clearly to justify the term 'negative process'.

(e) Explain 'Contribution' as a principle of insurance. [2 Marks]

Answer:
Contribution means the right of an insurer who has paid a claim under an insurance policy to call upon other insurers to contribute to the payment. It applies when the insured takes multiple policies for the same risk, ensuring that total compensation does not exceed the actual loss.

Teacher's Note:
a) This principle prevents the insured from making a profit out of loss by claiming from multiple insurers.
b) Mention that it applies only to contracts of indemnity.

Question 3.

(a) Mention any two utilities of a Budget. [2 Marks]

Answer:
1. Delegation and Authority : Reduction of plans to definite numbers forces orderliness, permitting managers to see clearly what capital will be spent by whom and what expenses or revenues are involved.
2. Higher Efficiency : Budgets bring efficiency and economy to the working of a business firm, helping management obtain the most profitable combination of factors of production.

Teacher's Note:
a) Budgets serve as an effective tool for managerial control and planning.
b) Mentioning standard definitions or key managerial utilities ensures full credit.

(b) Name and explain the type of training designed to correct mistakes. [2 Marks]

Answer:
Vestibule Training (or Refresher Training / Remedial Training). In vestibule training, a training centre away from the actual workplace is set up with expert trainers, allowing trainees to focus on learning and correcting operational mistakes without disrupting production.

Teacher's Note:
a) Vestibule training bridges the gap between theoretical knowledge and practical workplace operations.
b) Clearly state both the name and explanation.

(c) What is meant by 'Capital Receipts'? [2 Marks]

Answer:
Capital Receipts refer to the receipts of a non-recurring nature such as additional capital introduced by owners, loans raised by the firm, sale of fixed assets, or issue of shares and debentures.

Teacher's Note:
a) Capital receipts either create a liability or reduce assets.
b) Distinguish them clearly from revenue receipts which are recurring in nature.

(d) State any two advantages of Travellers' cheques. [2 Marks]

Answer:
1. The set value of a traveller's cheque helps to maintain a budget while travelling.
2. They are readily accepted in many locations and by many merchants worldwide.
3. Lost or stolen traveller's cheques are easier and faster to replace than lost cash or credit cards. (Any two)

Teacher's Note:
a) Travellers' cheques provide a safe alternative to carrying large amounts of cash during travel.
b) List any two distinct advantages as requested.

(e) Briefly describe the role of Marketing Research. [2 Marks]

Answer:
Marketing research provides information helpful in taking right decisions about various elements of the marketing mix. It is a tool for enhancing marketing plans, measuring market potential, and making better choices regarding distribution channels and advertising media.

Teacher's Note:
a) It reduces business risk by providing accurate and timely market data.
b) Keep the description concise and focused on managerial decision-making.

Question 4.

(a) Why is Financing an essential function of Marketing? [2 Marks]

Answer:
Financing is an essential auxiliary function of marketing because finance is required to meet fixed and working capital requirements. Business firms often sell goods on credit to increase sales volume, requiring funds to maintain stock, meet transport and storage costs, and grant credit.

Teacher's Note:
a) Adequate finance ensures the smooth flow of goods from producers to consumers.
b) Explain the link between credit sales, stock maintenance, and working capital needs.

(b) Explain any two advantages of Rail Transport. [2 Marks]

Answer:
1. Reliable : Railways follow fixed routes and regular time schedules, and are available throughout the year.
2. Economical for Bulky Goods : It is a much cheaper means for carrying bulky goods over long distances compared to motor vehicles.

Teacher's Note:
a) Rail transport has a high carrying capacity for heavy and bulk goods.
b) Mention any two points clearly with appropriate explanations.

(c) Explain the Right to Consumer Education under the Indian Consumer Protection Act. [2 Marks]

Answer:
According to this right, the consumer must be made aware of their rights and the remedies available under different laws. The consumer has the right to acquire knowledge and to be well-informed throughout life regarding safe products and protection against exploitation.

Teacher's Note:
a) An educated consumer can easily protect themselves against fraudulent trade practices.
b) Emphasize awareness and knowledge acquisition in the answer.

(d) State any four sustainable uses of Water. [2 Marks]

Answer:
1. Use drip irrigation and other water conservation measures in agriculture.
2. Protect water bodies from effluents and toxic materials.
3. Build small reservoirs in place of a few big projects.
4. Check over-exploitation of surface and ground water.

Teacher's Note:
a) Sustainable use ensures water availability for future generations.
b) Bullet points are ideal for listing multiple items clearly.

(e) "Both, conservation and restoration of natural resources or ecology cannot be possible without public awareness and community participation." Comment. [2 Marks]

Answer:
Conservation is planned management to prevent destruction, while restoration means enhancement of natural resources. People will conserve and restore nature only when they are sensitive to the environment and realize the importance of ecological balance. Well-informed citizens and community participation are essential to make the common man aware of this need.

Teacher's Note:
a) Environmental protection cannot be achieved through laws alone without grassroots participation.
b) Define the terms briefly and connect them to community awareness.

SECTION - B (40 Marks)

(Attempt any four questions from this Section)

Question 5.

(a) Explain any five expectations of Suppliers from a business organisation. [5 Marks]

Answer:
1. Reasonable terms of delivery and payment.
2. Healthy and co-operative inter-business relationship.
3. Regular and timely payment according to credit terms.
4. Correct information about the company's financial position.
5. Fair prices for the supplies provided.

Teacher's Note:
a) Suppliers are key stakeholders who provide raw materials and credit.
b) List and briefly explain all five points to secure full 5 marks.

(b) Explain any five merits of Written Communication to a business organisation. [5 Marks]

Answer:
1. Authoritative : Written communication appears more authoritative, formal, and credible, with fixed responsibility for mistakes.
2. Permanent Record : It provides a permanent record for future reference and serves as legal evidence.
3. Uniformity : It ensures transmission of information uniformly, allowing the receiver to read and re-read until understood.
4. Accuracy : Messages tend to be more accurate and precise because they are prepared with greater care.
5. Lengthy Messages : It is highly suitable for conveying lengthy messages and detailed instructions where a well-considered response is desired.

Teacher's Note:
a) Written communication minimizes misunderstandings in complex business transactions.
b) Heading-based explanations help examiners award marks easily.

Question 6.

(a) Mention five differences between Advertising and Personal Selling (Salesmanship). [5 Marks]

Answer:

Teacher's Note:
a) Tabular presentation is best suited for "difference between" questions.
b) Ensure all 5 distinct bases of comparison are clearly mentioned.

(b) Explain any five techniques used in Sales Promotion. [5 Marks]

Answer:
1. Bonus offers : Offering an article free of cost or at a nominal price on the purchase of a specified product to increase immediate sales and clear accumulated stock.
2. Exchange offer : Customers are offered the facility of exchanging old products for new ones with a price concession (e.g., exchanging old washing machines for a discount on a new one).
3. Coupons : Issued through newspapers, direct mail, or packages to introduce new products and increase sales.
4. Clearance sale : Sales at reduced prices organised during festivals or special occasions to clear old stock (e.g., Khadi Gramodyog Bhavan discounts).
5. Distribution of free samples : Free samples are distributed to selected people to gain consumer acceptance and popularize new products.

Teacher's Note:
a) Sales promotion techniques provide short-term incentives to boost sales.
b) Provide clear examples for each technique to make the answer comprehensive.

Question 7.

(a) Briefly explain the importance of Marketing. [5 Marks]

Answer:
1. Large scale production : Marketing makes selling possible, facilitating large-scale production which reduces per-unit costs.
2. Income generation : Business generates income to cover expenses and earn profits, ensuring the survival and growth of the firm.
3. Higher standard of living : Modernizes living standards by supplying quality products at reasonable prices with a wide variety of choices.
4. Customer satisfaction : Modern marketing begins and ends with customers by identifying and satisfying their needs.
5. Economic development : Balances production with consumption and gives a boost to allied sectors like banking, insurance, and transportation.

Teacher's Note:
a) Marketing acts as the driving force of any commercial economy.
b) Explain any five distinct points clearly.

(b) Explain: [5 Marks]
(i) Bank Draft
(ii) Indemnity as a principle of insurance.

Answer:
(i) Bank Draft : A bank draft is a type of cheque drawn by a bank either on its own branch or another bank to remit money safely. The sender pays the commission in advance, and payment can be collected at the counter of the drawee bank.
(ii) Indemnity : Indemnity means a promise to compensate in case of loss. The insured is entitled to recover from the insurer only the actual amount of loss suffered, ensuring no profit is made from the insurance contract (e.g., if a house insured for Rs. 20,00,000 suffers damage but has salvage worth Rs. 1,00,000, compensation is up to Rs. 19,00,000).

Teacher's Note:
a) Both sub-parts carry equal weightage; address both thoroughly.
b) Use numerical examples where applicable to clarify principles like indemnity.

Question 8.

(a) Briefly explain any five types of Budgets. [5 Marks]

Answer:
(i) Sales Budget : A forecast of sales to be achieved during a specified future period, broken down product-wise, territory-wise, and month-wise.
(ii) Materials Budget : Prepared for direct materials to estimate raw material requirements, schedule purchases, and control inventory.
(iii) Cash Budget : A summary statement of expected cash inflows and outflows over a future period, helpful in maintaining liquidity.
(iv) Production Budget : Contains estimates of total production volume product-wise and time-wise to ensure sufficient stock for sales.
(v) Master Budget : A summary of all functional budgets, compiled and approved by the Budget Committee before implementation.

Teacher's Note:
a) Budgets are essential quantitative plans for future business operations.
b) Ensure all five budgets are defined and explained accurately.

(b) Describe the role of Trade Union in a business concern. [5 Marks]

Answer:
1. Protection : Resist retrenchment, safeguard workers against exploitation by employers, and serve as a check on arbitrary actions.
2. Representation : Represent the working class in national and international forums like the Indian Labour Conference and ILO.
3. Sense of Belongingness : Generate self-respect and self-reliance, helping workers gain social respect.
4. Participation : Work for a better say of workers in management decisions that affect their interests.
5. Education : Make workers conscious of their rights and duties, and arrange education for workers and their families.

Teacher's Note:
a) Trade unions protect worker welfare and maintain harmonious industrial relations.
b) Highlight constructive roles such as education and representation along with protection.

Question 9.

(a) Explain any five advantages of air transport over water transport. [5 Marks]

Answer:
1. Natural gift : The sky is a natural highway requiring no huge capital investment for constructing tracks.
2. Highest speed : It is the fastest mode of transport, ideal for perishable goods and urgent travel.
3. Suitable during calamities : Can easily reach areas affected by floods, earthquakes, or landslides where other transport fails.
4. Efficient service : Provides regular and efficient service with flexibility to alter routes during emergencies.
5. Shortest route : Can fly straight over deserts, high seas, forests, and mountains without geographical hindrances.

Teacher's Note:
a) Air transport excels in speed and accessibility to remote regions.
b) List distinct points comparing air transport specifically with water transport.

(b) What do you mean by Group Life Insurance? Explain three main features of Group Life Insurance. [5 Marks]

Answer:
Group Life Insurance is a scheme providing insurance cover on the lives of several persons under one policy, provided to employees without individual evidence of insurability.
Main features:
1. Master Contract : It is a contract between the insurance company and the employer; the policy issued is called a master contract.
2. Flat Rate Premium : Premium is payable at a flat rate without regard to individual age or salary.
3. Service-linked Coverage : Provides risk coverage to employees only as long as they remain in the service of that employer.

Teacher's Note:
a) Group insurance reduces administrative costs for insurance companies.
b) Answer both parts: the definition and the three features.

Question 10.
The Trial Balance given below was prepared by Pratim Pal on 31st December 2000. Prepare a Trading Account and a Profit and Loss Account for the year ending 31st December 2000 and Balance Sheet as on 31st December 2000.
Trial Balance

Closing stock was valued at Rs. 3,140/- on 31st December 2000.

Answer:

Trading and Profit and Loss Account for the year ending 31st Dec. 2000

Balance Sheet as on 31st Dec. 2000

Teacher's Note:
a) Ensure all direct expenses are debited to the Trading Account and indirect expenses to the Profit and Loss Account.
b) Verify that the Balance Sheet totals match on both sides (Rs. 17,510).