ICSE Class 10 Commercial Studies Board Exam Question Paper 2025 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 [16 Marks]
Choose the correct answers to the questions from the given options.
(Do not copy the questions, write the correct answers only.)

(i) Which of the following is an example of Off-the-Job Training? [1 Mark]
(a) Job rotation
(b) Mentoring
(c) Apprenticeship
(d) Classroom training

Answer: (d) Classroom training

Classroom training takes place away from the actual work environment.

Teacher's Note:
a) Understand the difference between on-the-job methods (like apprenticeship, coaching) and off-the-job methods (like classroom training, lectures, vestibule training).
b) Off-the-job training focuses more on theoretical concepts away from workplace distractions.

(ii) Rishav prepared a detailed plan of operations for a specific future period. Identify the process. [1 Mark]
(a) Forecasting
(b) Marketing
(c) Budgeting
(d) Selecting

Answer: (c) Budgeting

Budgeting is the process of planning financial and operational activities for a specific future period.

Teacher's Note:
a) Budgeting involves setting numerical targets and allocating resources efficiently.
b) Do not confuse forecasting (estimating future trends) with budgeting (making a detailed financial plan).

(iii) Sharma and Company is planning to spend Rs. 5,00,000 on advertising. Under which type of expense can it be classified? [1 Mark]
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital receipts
(d) Deferred Revenue expenditure

Answer: (d) Deferred Revenue expenditure

Heavy advertising expenditure incurred to get long-term benefits over multiple years is classified as deferred revenue expenditure.

Teacher's Note:
a) Deferred revenue expenditures are written off over a period of years.
b) Normal routine advertising is revenue expenditure, but massive promotional campaigns creating long-term brand equity fall under this special category.

(iv) Observe the picture and identify the type of Consumer Exploitation. [1 Mark]
[Figure: A hand holding a magnifying glass over an apple, indicating food adulteration]
(a) Overcharging
(b) Under weighting
(c) Adulteration
(d) Fair pricing

Answer: (c) Adulteration

Mixing inferior or harmful substances into food products is adulteration.

Teacher's Note:
a) Adulteration poses severe health risks to consumers.
b) Carefully observe pictorial cues in exam questions relating to consumer protection.

(v) Assertion (A): Preference shares are a hybrid form of financing.
Reason (R): Preference shares have characteristics of both equity shares and debentures. [1 Mark]
(a) Both (A) and (R) are true and (R) is the correct explanation of (A).
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A).
(c) (A) is true and (R) is false.
(d) Both (A) and (R) are false.

Answer: (a) Both (A) and (R) are true and (R) is the correct explanation of (A).

Preference shares share ownership features like equity and fixed dividend returns like debentures.

Teacher's Note:
a) Always check if the reason explains the statement using the word 'because'.
b) Hybrid securities combine features of both ownership capital and borrowed capital.

(vi) Which of the following is Not true with reference to the Reserve Bank of India? [1 Mark]
(a) It is the sole custodian of foreign exchange reserves.
(b) It extends loans to the general public.
(c) It makes and receives payment on behalf of the government.
(d) It has the monopoly of issuing currency notes.

Answer: (b) It extends loans to the general public.

Commercial banks deal with the general public, whereas the Central Bank acts as a bankers bank.

Teacher's Note:
a) RBI does not open savings accounts or grant personal loans to retail citizens.
b) Central bank functions focus on monetary policy and regulation of commercial banks.

(vii) Which type of selection test helps to measure an applicant's level of knowledge and skill in a particular occupation? [1 Mark]
(a) Aptitude test
(b) Interest test
(c) Trade test
(d) Dexterity test

Answer: (c) Trade test

Trade tests evaluate existing professional proficiency and practical capabilities.

Teacher's Note:
a) Aptitude tests measure potential to learn, whereas trade tests measure actual current skill.
b) Memorize definitions of different psychological and professional tests used in staffing.

(viii) Which of the following are true for a Trading Account?
I. This account contains personal and real accounts only.
II. This account contains opening balance of stock on the debit side.
III. It is prepared after the Profit and Loss Account.
IV. The result of this account is the Gross Profit or the Gross Loss. [1 Mark]
(a) I and II are true.
(b) II and III are true.
(c) III and IV are true.
(d) II and IV are true.

Answer: (d) II and IV are true.

Trading account contains nominal accounts related to trading and reveals gross results.

Teacher's Note:
a) Trading account is prepared before Profit and Loss account, and contains nominal accounts (expenses and incomes).
b) Statement I and III are factually incorrect.

(ix) Marketing aims to build the reputation of the enterprise over time. [1 Mark]
(a) True
(b) False

Answer: (a) True

Brand building and reputation management are core long-term goals of marketing.

Teacher's Note:
a) Marketing is not just about immediate sales but creating lasting brand equity.
b) True/False statements in commercial studies test conceptual clarity.

(x) Expenses incurred by the firm to purchase a second-hand machine and make it ready for use, are treated as: [1 Mark]
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Capital Receipts
(d) Revenue Receipts

Answer: (a) Capital Expenditure

All expenses incurred to put a fixed asset into working condition are capitalized.

Teacher's Note:
a) Carriage, installation, and trial run costs of a new or second-hand asset form part of its capital cost.
b) Do not treat installation charges as routine revenue expenses.

(xi) Assertion (A): The Central Bank is the sole custodian of foreign currency reserves.
Reason (R): The Central Bank has the monopoly of note issue. [1 Mark]
(a) Both (A) and (R) are true and (R) is the correct explanation of (A).
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A).
(c) (A) is true and (R) is false.
(d) Both (A) and (R) are false.

Answer: (b) Both (A) and (R) are true but (R) is not the correct explanation of (A).

Both statements are independent core functions of the central bank.

Teacher's Note:
a) Monopoly of note issue does not explain why it holds foreign exchange reserves.
b) Read assertion-reason questions carefully to test logical connections.

(xii) Mohit goes to the bank with a credit instrument which is due three months later. The bank charges some commission and pays less than the face value of the instrument.
Identify the kind of loan granted by the commercial bank. [1 Mark]
(a) Term loan
(b) Cash credit
(c) Discounting of bills of exchange
(d) Overdraft

Answer: (c) Discounting of bills of exchange

Banks encash bills before maturity by deducting a small discount charge.

Teacher's Note:
a) Bill discounting provides immediate liquidity to businesses.
b) Differentiate between overdraft facilities and bill discounting mechanisms.

(xiii) Which of the following Acts established the Central Pollution Control Board at the national level? [1 Mark]
(a) Consumer Protection Act, 2019
(b) Environment Protection Act, 1986
(c) Companies Act, 1956
(d) Banking regulations Act, 1949

Answer: (b) Environment Protection Act, 1986

The overarching environmental legislation set up the national control board framework.

Teacher's Note:
a) Note the specific enactment years for major industrial and consumer acts.
b) CPCB functions under the environmental regulatory framework.

(xiv) Observe the picture and identify what type of Insurance can be claimed. [1 Mark]
[Figure: A cargo ship sinking in the sea]
(a) Health
(b) Fire
(c) Life
(d) Marine

Answer: (d) Marine

Shipwreck and cargo losses at sea are indemnified under marine insurance.

Teacher's Note:
a) Marine insurance covers hull, cargo, and freight perils.
b) Visual questions test practical association of insurance branches.

(xv) A social security scheme has the following characteristics:
1. Any citizen of India, resident or non-resident, can become a member.
2. It has a Tier I account which is mandatory and Tier II which is optional.
Identify the scheme. [1 Mark]
(a) Provident Fund
(b) Gratuity
(c) National Pension Scheme
(d) Maternity benefits

Answer: (c) National Pension Scheme

NPS is structured into Tier I (pension account) and Tier II (voluntary savings account).

Teacher's Note:
a) NPS is regulated by PFRDA for systematic retirement planning.
b) Memorize the structure of statutory social security schemes.

(xvi) The accountant of Gupta & Co. Ltd. has to pass an entry for Carriage Inwards. Where would he post the entry? [1 Mark]
(a) Debit side of Profit and Loss Account
(b) Debit side of Trading Account
(c) Credit side of Trading Account
(d) Liabilities side of Balance sheet

Answer: (b) Debit side of Trading Account

Carriage inwards is a direct expense related to purchase of goods.

Teacher's Note:
a) Direct expenses appear in the Trading account, while indirect expenses appear in the Profit and Loss account.
b) Carriage inwards is added to purchase cost.

Question 2
Write any two differences between:

(i) Capital Expenditure and Revenue Expenditure [2 Marks]

Answer:

Teacher's Note:
a) State distinct points covering definition and earning capacity.
b) Give one example for clarity if space permits.

(ii) Trading Account and Profit and Loss Account [2 Marks]

Answer:

Teacher's Note:
a) Focus on the final objective and nature of expenses recorded.
b) Ensure tabular presentation is clear.

(iii) Product and Service [2 Marks]

Answer:

Teacher's Note:
a) Highlight tangibility as the fundamental dividing line.
b) Provide clear real-world commercial examples.

(iv) Direct Cost and Indirect Cost [2 Marks]

Answer:

Teacher's Note:
a) Traceability is the primary criterion for classification.
b) Direct material and wages are classic direct costs.

Question 3

(i) Mohan intentionally burns the old stock of damaged clothes in his warehouse. Then, he claims the insurance.
(a) Which type of insurance would he claim? [1 Mark]
(b) Give one reason to state why the claim will not be settled. [1 Mark]

Answer:
(a) Fire insurance.
(b) The claim will not be settled because of violation of the Principle of Utmost Good Faith and fraud (arson), as the loss was caused intentionally by the insured.

Teacher's Note:
a) Insurance contracts are contracts of utmost good faith (uberrimae fidei).
b) Fraudulent destruction of property invalidates any insurance claim.

(ii) What is Selection? [2 Marks]

Answer:
Selection is the process of choosing the most suitable candidates from a pool of applicants for a particular job. It involves evaluating candidates based on their qualifications, skills, experience, and suitability through various tests and interviews.

Teacher's Note:
a) Distinguish recruitment (positive process of inviting applications) from selection (negative/choosing process of eliminating unsuitable candidates).
b) Mention evaluation of credentials and interviews.

(iii) Explain Application Blank. [2 Marks]

Answer:
An Application Blank is a structured form filled out by job applicants, providing details about their personal information, educational qualifications, work experience, skills, and references. It helps employers in shortlisting candidates for further selection processes.

Teacher's Note:
a) It serves as a standardized record for initial candidate screening.
b) Mention key particulars gathered through the blank.

(iv) Write in brief about a Sales Budget. [2 Marks]

Answer:
A Sales Budget is a financial plan that estimates the expected sales revenue for a specific period. It is based on past sales data, market trends, and business objectives. It helps businesses in setting sales targets, allocating resources, and planning marketing strategies efficiently.

Teacher's Note:
a) Sales budget forms the foundation for all other functional budgets.
b) Emphasize revenue estimation and target setting.

Question 4

(i) Briefly explain the Principle of Indemnity. [2 Marks]

Answer:
The Principle of Indemnity states that an insured person will be compensated for the actual financial loss suffered but not allowed to make a profit from the insurance claim. This principle ensures that insurance restores the insured to the same financial position before the loss occurred.

Teacher's Note:
a) Applicable to property and fire/marine insurance, not life insurance.
b) Emphasize restoration of original financial position without enrichment.

(ii) Who are Internal Stakeholders? Give two examples. [2 Marks]

Answer:
Internal stakeholders are individuals or groups directly involved in the operations of an organisation and have a vested interest in its success.
Examples:
1. Employees
2. Shareholders / Directors

Teacher's Note:
a) Internal stakeholders operate within the organizational boundary.
b) Contrast with external stakeholders like customers, suppliers, and government.

(iii) Identify the last step of the final accounts, which is prepared after Profit and Loss Account. Explain in brief. [2 Marks]

Answer:
The Balance Sheet is the final step, prepared after the Profit and Loss Account. It provides a statement of financial position, showing the company's assets, liabilities, and capital at a specific date. It helps in assessing the financial stability and liquidity of the business.

Teacher's Note:
a) Balance sheet equates assets with liabilities plus capital.
b) Mention that it reflects financial health on a particular date.

(iv) Write in brief about E-tailing. [2 Marks]

Answer:
E-tailing, or electronic retailing, refers to the process of selling goods and services online through digital platforms. It includes e-commerce websites like Amazon and Flipkart, where customers can browse, select, and purchase products via the internet. E-tailing provides convenience, wider product choices, and home delivery options for consumers.

Teacher's Note:
a) Highlights digital commerce and virtual storefronts.
b) Mention consumer convenience and internet connectivity.

SECTION B (40 Marks)

(Attempt any four questions from this Section)

Question 5

(i) Pricing is not an end by itself but a means to achieve marketing objectives of the firm.
Discuss any five objectives of Pricing. [5 Marks]

Answer:
1. Profit Maximisation: Setting prices to generate the highest possible profit by balancing production costs, demand, and market conditions.
2. Market Penetration: Using lower initial prices to attract customers, increase sales volume, and establish a strong market presence.
3. Survival: Keeping prices competitive during economic downturns or high competition to ensure business continuity.
4. Customer Perceived Value: Aligning prices with the value customers associate with the product, ensuring satisfaction and long-term loyalty.
5. Competitive Pricing: Adjusting prices based on competitor strategies to maintain market position and attract price-sensitive consumers.

Teacher's Note:
a) Pricing strategy directly affects total revenue and market share.
b) Explain each objective clearly with its strategic intent.

(ii) Write short notes on:

(a) Equity shares [2½ Marks]

Answer:
Equity shares represent ownership in a company and are a primary source of long-term capital. Shareholders who hold equity shares are known as equity shareholders and have voting rights in important company decisions. These shares do not offer a fixed return, as dividends depend on the company's profitability. Equity shareholders bear the highest risk because they are paid only after all debts and liabilities are settled in case of liquidation. However, they also have the potential for high returns if the company performs well.

Teacher's Note:
a) Highlight voting rights and residual claim on assets/profits.
b) Emphasize the risk-reward tradeoff for equity investors.

(b) Mitigation of Loss as a Principle of Insurance [2½ Marks]

Answer:
The principle of Mitigation of Loss states that the insured must take all reasonable steps to minimise damage or loss to insured property. This principle prevents carelessness by ensuring that policyholders do not act irresponsibly, assuming that their losses will be covered by insurance. For example, if a fire breaks out in a factory, the owner must attempt to control it and prevent further damage instead of relying entirely on the insurance company for compensation.

Teacher's Note:
a) The insured must behave as if uninsured during a peril.
b) Emphasize proactive loss prevention.

Question 6

(i) 'Trade Unions provide workers with collective bargaining power, enabling them to negotiate for better benefits.'
Explain any five functions of a Trade Union. [5 Marks]

Answer:
1. Collective Bargaining: One of the primary functions of a trade union is to negotiate with employers on behalf of workers to secure better wages, improved working conditions, and other employment benefits.
2. Protection of Workers' Rights: Trade unions work to ensure job security and safeguard workers from unfair treatment, discrimination, or wrongful termination. They also advocate for workplace safety and ensure that labour laws are followed.
3. Improving Working Conditions: Trade unions act as mediators to resolve disputes related to wages, working hours, disciplinary actions, and other employment matters, helping to maintain industrial peace.
4. Providing Legal Assistance: Trade unions provide legal support to workers in case of disputes related to employment laws, wrongful dismissal, or workplace harassment. They help employees understand their rights and represent them in legal proceedings when necessary.
5. Welfare and Social Security: Many trade unions engage in welfare activities such as providing healthcare benefits, pensions, housing facilities, and education support for workers and their families. These initiatives help improve the overall well-being and job satisfaction of employees.

Teacher's Note:
a) Trade unions bridge the bargaining power gap between individual workers and employers.
b) Detail economic, protective, and welfare functions.

(ii) Briefly explain:

(a) Inventory Module of ERP [2½ Marks]

Answer:
The Inventory Module in ERP (Enterprise Resource Planning) helps businesses manage stock levels, track inventory movements, and optimise supply chain operations. It ensures real-time visibility of stock, reduces wastage, and improves order management.

Teacher's Note:
a) ERP integrates various business functions into a centralized system.
b) Inventory module prevents stockouts and overstocking.

(b) ATM [2½ Marks]

Answer:
An ATM (Automated Teller Machine) is an electronic banking machine that allows customers to perform financial transactions such as cash withdrawals, deposits, balance enquiries, and fund transfers without needing a bank representative. It operates using a debit or credit card and a secure PIN.

Teacher's Note:
a) ATMs provide 24/7 banking convenience.
b) Mention security aspects like PIN and card usage.

Question 7

(i) Mention three merits and two demerits of Air Transport. [5 Marks]

Answer:
Merits:
1. Fastest Mode of Transport: Air transport is the quickest way to travel long distances, making it ideal for urgent deliveries and emergencies.
2. Global Reach: It connects remote areas and international destinations efficiently, facilitating global trade and tourism.
3. Less Infrastructure Dependency: Unlike roads or railways, air transport does not require extensive infrastructure guideline along the route.
Demerits:
1. High Cost: Air travel and cargo transportation are expensive due to fuel costs, maintenance, and operational expenses.
2. Weather Dependency: Flights can be delayed or cancelled due to adverse weather conditions, affecting schedules and reliability.

Teacher's Note:
a) Balance speed and cost advantages against weather and economic limitations.
b) Ensure exactly three merits and two demerits are listed.

(ii) (a) Mr. Roy invented a product which uses less harmful chemicals. He paid Sen & Co. (RS sign used) 500000/- to promote the product. Sen & Co. used the product for their own gain without promoting it. [3 Marks]
1. What fraudulent practice was committed?
2. What action can Mr. Roy take?

Answer:
1. The fraudulent practice committed by Sen & Co. is a breach of contract and misappropriation of funds.
2. Mr. Roy can take legal action by filing a case for fraud and breach of contract against Sen & Co. He can also demand a refund or compensation for financial losses and file a complaint with the consumer protection authorities or approach a civil court to claim damages.

Teacher's Note:
a) Identify breach of fiduciary duty and contract.
b) Suggest legal remedies available under commercial and consumer law.

(b) Write a short note on Bonded Warehouse. [2 Marks]

Answer:
A bonded warehouse is a storage facility authorised by the government where imported goods are kept until the importer pays the required customs duties. These warehouses are usually located near ports and are operated by customs authorities or private entities under strict regulations. Goods stored in a bonded warehouse can be sold, repackaged, or re-exported without paying duties until they enter the domestic market. This facility helps businesses manage cash flow by deferring tax payments until the goods are sold.

Teacher's Note:
a) Bonded warehouses facilitate international trade and duty deferment.
b) Mention customs control and storage flexibility.

Question 8

(i) Explain any five features of the Consumer Protection Act. [5 Marks]

Answer:
1. Establishment of Consumer Protection Councils: The Act provides for Consumer Protection Councils at the central, state, and district levels to promote and protect consumer rights.
2. Consumer Dispute Redressal Mechanism: It establishes a three-tier redressal system with the District Consumer Disputes Redressal Commission (DCDRC), State Consumer Disputes Redressal Commission (SCDRC), and National Consumer Disputes Redressal Commission (NCDR C) for resolving consumer complaints.
3. Product Liability: The Act introduces the concept of product liability, making manufacturers, sellers, and service providers accountable for defective products or services that cause harm to consumers.
4. E-Commerce and Unfair Trade Practices: The Act covers e-commerce transactions, ensuring that online consumers are protected from fraudulent activities, misleading advertisements, and unfair trade practices.
5. Alternative Dispute Resolution (ADR): The Act promotes mediation as an alternative method for resolving consumer disputes efficiently, reducing the burden on consumer courts.

Teacher's Note:
a) Focus on CPA 2019 provisions.
b) Mention the three-tier quasi-judicial machinery clearly.

(ii) Briefly explain:

(a) Right to Choose/Right to be Assured [2½ Marks]

Answer:
The Right to Choose ensures that consumers have access to a variety of products and services at competitive prices. The Right to Be Assured guarantees that consumers receive products of standard quality without false claims or deceptive advertising.

Teacher's Note:
a) Part of the six consumer rights under the Act.
b) Ensure both components (choice and assurance of quality/competitive pricing) are explained.

(b) Industrial Relations [2½ Marks]

Answer:
Industrial relations refer to the relationship between employers, employees, trade unions, and the government. It aims to ensure a harmonious working environment by addressing issues like wages, working conditions, and dispute resolution.

Teacher's Note:
a) Focus on harmony between labor and management.
b) Mention the tripartite role involving government intervention.

Question 9

(i) Discuss the Utility Budgets. [5 Marks]

Answer:
A budget is a financial plan that helps businesses allocate resources, control expenses, and achieve financial goals. The utility of budgets in an organisation includes:
1. Financial Planning and Control: Budgets help in setting financial goals and ensure that spending aligns with income and business objectives.
2. Cost Management: By setting spending limits, budgets prevent unnecessary expenses and help in cost reduction.
3. Resource Allocation: Budgets ensure the efficient distribution of resources across different departments and projects to maximise productivity.
4. Performance Evaluation: Budgets serve as a benchmark for measuring actual performance against planned figures, helping businesses take corrective actions if needed.
5. Decision-Making: Budgeting provides financial insights that help management make informed decisions on investments, expansion, and operations.

Teacher's Note:
a) Budgets serve as both planning and control tools.
b) Detail how planning, cost control, and performance evaluation benefit firms.

(ii) This group of people offer raw materials, finished products or various services to a business organisation.
(a) Identify this group of stakeholders. [1 Mark]
(b) Give four expectations they may have from the business organisation. [4 Marks]

Answer:
(a) Suppliers.
(b) Four expectations suppliers may have from a business organization:
1. Timely Payments: Suppliers expect prompt payment for the goods or services they provide.
2. Long-term Business Relationship: They seek a stable and reliable business partnership.
3. Fair Pricing and Contracts: Suppliers expect reasonable pricing and transparent contract terms.
4. Consistent Orders: Regular and bulk orders ensure their business stability and growth.

Teacher's Note:
a) Suppliers are external stakeholders vital for supply chain continuity.
b) List realistic commercial expectations like prompt payment and fair contracts.

Question 10
The following Trial Balance was extracted from the books of Mr. Joseph as on 31^st March, 2024. You are required to prepare the Trading Account and the Profit and Loss Account for the year ended 31^st March, 2024. Also, prepare a Balance Sheet as on 31^st March, 2024. [10 Marks]

Closing Stock was valued at Rs. 20,000 on 31^st March, 2024.

Answer:

(a) Trading Account for the year ended 31st March 2024

(b) Profit and Loss Account for the year ended 31st March 2024

(c) Balance Sheet as of 31st March 2024

Teacher's Note:
a) Ensure correct classification of items into Trading account (direct expenses), P&L account (indirect expenses), and Balance Sheet (assets and liabilities).
b) Double-check arithmetic calculations for Gross Profit, Net Profit, and Balance Sheet tallies.