ICSE Class 10 Commercial Studies Board Exam Question Paper 2019 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) Marketing and Sales [2 Marks]

Answer:

Teacher's Note:
a) Understand that marketing is a broader concept that includes planning, pricing, promoting, and distributing products, whereas sales is just a subset focused on transferring ownership of goods.
b) Students often confuse the timing; remember that marketing starts much before production while sales begins only after the goods are produced.

(b) Central Bank and Commercial Bank [2 Marks]

Answer:

Teacher's Note:
a) The Central Bank is the apex financial institution of the country, while commercial banks operate for profit by accepting deposits and granting loans to the public.
b) Clearly state the monopoly of currency note issue and monetary policy formulation as unique features of the Central Bank.

(c) Product and Service [2 Marks]

Answer:

Teacher's Note:
a) Tangibility is the primary differentiating factor between goods (products) and services.
b) Ensure you mention that services are inseparable from their providers and are consumed at the point of production.

(d) Debit Card and Credit Card [2 Marks]

Answer:

Teacher's Note:
a) A debit card uses your own money currently available in your bank account, whereas a credit card is essentially a short-term loan provided by the issuing institution.
b) Highlight the creditworthiness verification required for credit cards versus the automatic issuance with bank accounts for debit cards.

(e) Shares and Debentures [2 Marks]

Answer:

Teacher's Note:
a) Shareholders receive dividends which fluctuate based on profits, while debenture holders receive a fixed rate of interest regardless of profits.
b) Remember that shares give voting rights in company management, whereas debentures do not.

Question 2.

(a) Mention any two objectives of Pricing. [2 Marks]

Answer:
1. To increase the sales volume of the firm.
2. To maximize profit of the firm.

Teacher's Note:
a) Pricing objectives guide how a company values its products in the market to meet financial and marketing goals.
b) Other valid objectives include achieving quality leadership or removing competitors from the market.

(b) Explain 'Sales Budget'. [2 Marks]

Answer:
A sales budget is an estimate of sales for a future accounting period, often divided into fiscal quarter estimates. It helps management forecast revenues and coordinate business operations effectively based on past trends, plant capacity, and market conditions.

Teacher's Note:
a) A sales budget serves as the foundation for all other functional budgets in an organization.
b) Mention that factors like past sales figures, seasonal fluctuations, and orders in hand are kept in mind while preparing it.

(c) What is 'Social Advertising Media'? [2 Marks]

Answer:
Social advertising media is a form of Internet advertising that utilizes social networking websites as a marketing tool where marketers pay the platform to display promotional content, display ads, or promoted tweets. Popular platforms include YouTube, Facebook, and Twitter.

Teacher's Note:
a) The core aim of social advertising is to produce shareable content that spreads organically across user networks.
b) Differentiate between organic social media posts and paid social advertising media.

(d) What is 'Discounting of bills of exchange'? [2 Marks]

Answer:
Discounting of bills of exchange is a process where the holder of a bill sells it to a bank for cash before its due date at a nominal discount rate. The bank deducts a small interest fee and pays the balance amount to the drawer, becoming the owner of the bill.

Teacher's Note:
a) This facility provides immediate liquidity to businesses without waiting for the credit period to expire.
b) Clearly state that the bank pays cash equal to the face value less discount for the unexpired period.

(e) What do you mean by On-the-job training and Off-the-job training? [2 Marks]

Answer:
On-the-job training is training given to an employee while performing actual tasks at the workplace under supervision. Off-the-job training is training conducted away from the actual work location in a stress-free environment dedicated solely to learning.

Teacher's Note:
a) On-the-job training is practical and cost-effective, while off-the-job training allows deep concentration without work pressure.
b) Give examples such as apprenticeship for on-the-job and classroom lectures or seminars for off-the-job training.

Question 3.

(a) What is meant by 'Deferred Revenue Expenditure'? [2 Marks]

Answer:
Deferred Revenue Expenditure is revenue in nature expenditure incurred during an accounting period which is heavy in amount and whose benefits are derived over multiple future accounting periods, such as massive advertising expenditure for launching a new product.

Teacher's Note:
a) Such expenditure is written off in installments over the years it provides benefits.
b) Do not confuse it with capital expenditure; it is essentially a revenue expense written off across multiple years.

(b) What do you understand by 'Semi-variable Costs'? [2 Marks]

Answer:
Semi-variable costs are expenses whose behavior is partly fixed and partly variable. They remain fixed up to a certain level of production volume and vary directly with output beyond that threshold.

Teacher's Note:
a) Examples include electricity bills carrying a fixed meter charge plus variable usage charges, or supervisory wages.
b) Mention the distinct behavioral shift after a specific capacity level is crossed.

(c) How do warehouses help in price stabilization? [2 Marks]

Answer:
Warehouses stabilize prices by balancing demand and supply. They store excess goods during periods of bumper production to prevent price crashes, and release them during scarcity to prevent exorbitant price hikes.

Teacher's Note:
a) Warehousing creates time utility by bridging the gap between production and consumption.
b) Emphasize how balancing market supply protects both producers and consumers from drastic price fluctuations.

(d) Why is a 'Master Budget' also known as a Summary Budget? [2 Marks]

Answer:
A master budget is known as a summary budget because it consolidates all individual functional budgets (such as sales, production, cash) into one comprehensive overview, indicating overall expected earnings and expenses for the entire organization.

Teacher's Note:
a) It serves as the ultimate financial blueprint approved by top management.
b) Highlight its summary nature encapsulating the targets of all operational departments.

(e) Explain the term 'Logistics'. [2 Marks]

Answer:
Logistics refers to the process of strategically managing, coordinating, and moving resources including people, materials, inventory, and equipment from the point of origin to storage or their desired destination.

Teacher's Note:
a) Logistics forms a crucial part of the supply chain management system.
b) Ensure keywords like coordination, movement, and storage are included in the definition.

Question 4.

(a) What is 'National Electronic Fund Transfer'? [2 Marks]

Answer:
National Electronic Funds Transfer (NEFT) is a nation-wide retail payment system enabling individuals and corporations to electronically transfer funds from any bank branch to any other participating bank branch in batches with no minimum or maximum value limits.

Teacher's Note:
a) NEFT transactions are settled in batches rather than on a gross real-time basis.
b) Distinguish it from RTGS, which has a minimum limit of Rs. 2 lakh.

(b) State any two precautions while using an 'ATM'. [2 Marks]

Answer:
1. Perform the transaction yourself and never share your PIN with anyone.
2. Shield the keypad with your hand while typing your password and press the Cancel button after the transaction is complete.

Teacher's Note:
a) Security of ATM transactions depends heavily on keeping the PIN confidential.
b) Always check for skimming devices or suspicious elements around the card slot.

(c) What do you understand by 'Health Insurance'? [2 Marks]

Answer:
Health insurance is a type of insurance coverage that indemnifies or pays for medical, surgical, and hospital expenses incurred by the insured individual, either through direct settlement or reimbursement.

Teacher's Note:
a) It protects individuals and families from financial ruin due to unexpected medical emergencies.
b) Mention both reimbursement and cashless hospitalization models.

(d) What do you mean by Internet and Cyber Fraud? [2 Marks]

Answer:
Internet fraud is deceit committed using internet services or software to defraud victims, such as credit card scams and phishing. Cyber fraud encompasses online deception for unlawful financial gain, data break-ins, identity theft, and cyberbullying.

Teacher's Note:
a) Both terms relate to malicious digital activities targeting financial assets or personal data.
b) Give concrete examples like online credit card theft or fake auction scams.

(e) Explain any features of Environment (Protection) Act, 1986. [2 Marks]

Answer:
1. Empowers the Central Government to take all necessary measures for protecting and improving the quality of the environment.
2. Lays down standards for the emission or discharge of environmental pollutants from various sources.

Teacher's Note:
a) This act is an umbrella legislation designed to provide a framework for central coordination of environmental protection.
b) Mention powers of inspection, handling of hazardous substances, and establishment of environmental laboratories.

SECTION - B (40 Marks)

(Attempt any four questions from this Section)

Question 5.

(a) State any five expectations of employers from a business enterprise. [5 Marks]

Answer:
1. Employees should be dependable and maintain strict business secrecy.
2. Employees should strive to achieve the sales targets set by the firm.
3. Employees should work efficiently to help generate profits for the firm.
4. Employers expect quick learning and adaptability from their workforce.
5. Employers expect constructive feedback regarding products or services supplied by the firm.

Teacher's Note:
a) Employers view employees as crucial human assets whose dedication directly affects enterprise productivity.
b) List clear, professional workplace expectations such as loyalty, target achievement, and feedback.

(b) Briefly discuss any five advantages of E-commerce over traditional methods of transactions. [5 Marks]

Answer:
1. Anytime, Anywhere Services: Internet technology provides 24/7 global availability across the world.
2. Cost Effective: E-commerce transactions significantly reduce operational, marketing, and communication costs.
3. No Need for Middlemen: Direct contact between buyers and sellers eliminates intermediary commissions.
4. World Level Expansion: Businesses can expand globally without geographical barriers.
5. Multiple Models of Business: Facilitates seamless interaction across B2B, B2C, and C2C models.

Teacher's Note:
a) E-commerce has revolutionized trade by removing physical storefront limitations.
b) Ensure all five points highlight distinct digital advantages over brick-and-mortar trade.

Question 6.

(a) What is an Advertising Agency? Explain any two of its functions. [5 Marks]

Answer:
An advertising agency is an independent service organization that plans, prepares, and places advertisements in various media for clients to promote their products and services for a profit.
Functions:
(i) Media Selection: Selecting the most appropriate, cost-effective advertising media (television, internet, print) to reach the target audience.
(ii) Sales Promotion: Designing and executing special promotional campaigns and incentives for dealers and consumers to boost sales.

Teacher's Note:
a) Advertising agencies provide specialized creative and advisory expertise to businesses.
b) Clearly explain both the definition and the two chosen functional roles with examples.

(b) Explain any five rights enjoyed by consumers as per The Consumer Protection Act, 1986. [5 Marks]

Answer:
1. Right to Safety: Protection against goods and services that are hazardous to health and life.
2. Right to be Informed: Access to adequate information regarding quality, quantity, purity, standard, and date of manufacture to prevent unfair trade practices.
3. Right to Choose: Freedom to choose from a variety of goods and services at competitive prices without coercion.
4. Right to be Heard: Assurance that consumer interests and complaints will receive due consideration in appropriate forums.
5. Right to Seek Redressal: Right to get compensation against unfair trade practices, exploitation, or shoddy goods, including replacement or refund.

Teacher's Note:
a) These rights form the bedrock of consumer protection in India under the 1986 Act.
b) State the exact names of the rights as specified in Section 6 of the Act for full credit.

Question 7.

(a) What is a Capital Market? Explain any two of its functions. [5 Marks]

Answer:
The capital market is a financial market where long-term debt and equity securities (shares, debentures, bonds) are bought and sold by governments and corporate entities.
Functions:
(i) Mobilization of Savings: Channels idle monetary savings from individuals and households into productive investment channels.
(ii) Capital Formation: Directly aids in net capital addition by directing mobilized funds into industrial, agricultural, and infrastructural development.

Teacher's Note:
a) Capital market is divided into primary and secondary markets.
b) Emphasize its long-term financial nature distinct from the money market.

(b) Explain any five objectives of Industrial Relations. [5 Marks]

Answer:
1. To safeguard the interests of both labor and management through mutual understanding and goodwill.
2. To avoid industrial conflicts, strikes, and lockouts, fostering industrial peace and progress.
3. To raise productivity levels by reducing absenteeism and labor turnover.
4. To promote industrial democracy through workers' participation in management and profit-sharing.
5. To improve the economic conditions and living standards of workers by ensuring fair wages and safe working conditions.

Teacher's Note:
a) Harmonious industrial relations are vital for national economic development.
b) Highlight collaboration, conflict minimization, and productivity enhancement as key goals.

Question 8.

(a) Explain the 'Clearing House Function' of the Central Bank. [5 Marks]

Answer:
The Central Bank acts as a clearing house for commercial banks by maintaining their cash balances. Mutual claims and cheques drawn on one another by different banks are offset at the clearing house, and settlement is made simply by transferring balance amounts through debit and credit entries. For instance, if Bank A owes Bank B Rs. 4,000 and Bank B owes Bank A Rs. 3,000, Bank A pays only the net balance of Rs. 1,000 to Bank B, saving considerable time, cash handling, and inconvenience.

Teacher's Note:
a) This function leverages the Central Bank's role as bankers' bank.
b) Provide the numerical illustration given in standard texts to explain the settling of net differences clearly.

(b) Explain any five disadvantages of Air Transport. [5 Marks]

Answer:
1. High Costs: Operational and ticket costs are extremely high, making it unaffordable for lower-income groups.
2. Restrictions on Cargo: Strict regulations prohibit carrying hazardous items, liquids, or sharp objects.
3. Huge Capital Investments: Requires massive capital expenditure for aerodromes, control towers, and aircraft acquisition.
4. Weather Dependent: Highly unreliable during adverse weather conditions like fog, heavy snow, or storms leading to flight cancellations.
5. Small Carrying Capacity: Aircraft have limited cargo capacity compared to railways or ships, making them unsuitable for bulky, cheap goods.

Teacher's Note:
a) While air transport is the fastest, its economic and operational limitations restrict bulk utility.
b) List distinct drawbacks such as high cost, weather vulnerability, and limited payload capacity.

Question 9.

(a) Explain the following Principles of Insurance: (i) Doctrine of Subrogation (ii) Mitigation of Loss [5 Marks]

Answer:
(i) Doctrine of Subrogation: It states that once an insurer compensates the insured for a loss caused by a wrongful act of a third party, all the rights of recovery against that third party pass on to the insurer.
(ii) Mitigation of Loss: It requires the insured individual to take all possible reasonable steps to minimize and mitigate loss or damage to the insured property during an accident or mishap, as if uninsured.

Teacher's Note:
a) Subrogation prevents the insured from collecting twice for the same loss.
b) Mitigation ensures policyholders do not act carelessly simply because they have insurance coverage.

(b) Explain briefly any five functions of 'Central Pollution Control Board'. [5 Marks]

Answer:
1. Advise the Central Government on matters concerning the prevention and control of water and air pollution.
2. Plan and execute nation-wide programs for the prevention, control, or abatement of water and air pollution.
3. Coordinate activities of State Pollution Control Boards and resolve disputes among them.
4. Provide technical assistance, guidance, and sponsor research regarding pollution control.
5. Organize comprehensive mass awareness programs through mass media regarding environmental pollution.

Teacher's Note:
a) CPCB is the apex national body for environmental pollution control in India.
b) Mention advisory, coordination, training, and research functions clearly.

Question 10.

The following is the Trial Balance of ABC Industries as on 31st December 2015. [10 Marks]

[Figure: Trial Balance table of ABC Industries with Dr. and Cr. columns totaling Rs. 1,18,000.00 each, and closing stock valued at Rs. 9,000]

Answer:

Trading and Profit and Loss Account of ABC Industries for the year ended 31st December 2015

Balance Sheet of ABC Industries as on 31st December 2015

Working Notes:
1. Net Sales = Sales (Rs. 83,000) - Sales Returns (Rs. 250) = Rs. 82,750.
2. Net Purchases = Purchases (Rs. 30,000) - Purchases Returns (Rs. 1,000) = Rs. 29,000.
3. Gross Profit = Total Credit Side of Trading (Rs. 82,750 + Rs. 9,000 = Rs. 91,750) - Total Debit Side (Rs. 5,000 + Rs. 29,000 + Rs. 1,500 = Rs. 35,500) = Rs. 56,250.
4. Net Profit = Total Income (Rs. 56,250 + Rs. 2,000 = Rs. 58,250) - Total Expenses (Rs. 4,000 + Rs. 500 + Rs. 7,000 + Rs. 750 + Rs. 1,000 + Rs. 2,000 = Rs. 15,250) = Rs. 43,000.

Teacher's Note:
a) Ensure closing stock is credited in the Trading Account and shown as a current asset in the Balance Sheet.
b) Drawings are deducted from Capital and Net Profit is added to Capital to arrive at the final liability total of Rs. 74,000, which tallies perfectly with total assets.