pankaj sir commerce academy

BST TEST PAPER

Class 12 - Business Studies
Time Allowed: 3 hours Maximum Marks: 80

General Instructions:

1. This question paper contains 34 questions.

2. Marks are indicated against each question.

3. Answers should be brief and to the point.

4. Answers to the questions carrying 3 marks may be from 50 to 75 words.

5. Answers to the questions carrying 4 marks may be about 150 words.

6. Answers to the questions carrying 6 marks may be about 200 words.

7. Attempt all parts of the questions together.

1. A manager in a conscious manner has to ensure that even where members of a department willingly [1]
cooperate, coordination gives direction to the willing spirit. The characteristic of coordination being
highlighted above is:

a) Coordination is the responsibility of all b) Coordination is a continuous process.

managers.

c) Coordination is a deliberate function. d) Coordination integrates group efforts.

2. What type of instruments are traded in a Money Market? [1]

a) Call money b) Commercial bills

c) All of these d) Treasury bills

3. Name the type of plan which reflects the managerial decision that a certain action must or must not be taken. [1]

a) Rules b) Strategies

c) Policies d) Procedures
4. When the stock market is bullish, a company must go for which of the following? [1]

a) Equal mix of debt and equity b) More debt

c) More equity d) Less equity

5. This is one of the features of standards. Identify it. [1]

a) Unbending b) Flexible

c) Static d) Rigid
6. Achievers ltd strictly follows this principle of management at all levels. Identify this principle from the [1]
following picture.

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 a) Authority and responsibility b) Unity of command

c) Scalar chain d) Order

7. Indentify the participant of primary market from the following ________. [1]

a) All of these b) Mutual funds

c) Individuals d) Banks
8. Vikas is working as a vice-president in Cargo Ltd. He performs a separate and specialised function having many [1]
aspects of human relations. His job is closely linked with organising since after the structure and positions have
been decided, people are required to work in these positions. His function is seen as a generic function of
management. When he performs his duties, his role is slightly limited. The function being performed by Vikas as
the vice president of Cargo Ltd. is ________.

a) Directing b) Planning

c) Organising d) Staffing
9. Which of the following statement is false? [1]
a. Service industries require less working capital.
b. Working capital requirement is higher in firms with shorter processing cycle.
c. A liberal credit policy results in larger working capital requirement.
d. Larger the lead time, larger shall be the amount of working capital required.

a) option (b) b) option (c)

c) option (a) d) option (d)

10. Assertion (A): Delegation is a pre-requisite to the efficient functioning of an organization. [1]
Reasoning (R): It enables a manager to use his time on high priority activities.

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

c) A is true but R is false. d) A is false but R is true.

11. Primary and secondary markets: [1]

a) Control each other b) Compete with each other

c) Function independently d) Complement each other

12. A public issue of equity may reduce the management’s holding in the company and make it vulnerable to [1]
takeover. This factor also influences the choice between debt and equity especially in companies in which the
current holding of management is on a lower side. The factor affecting the choice of capital structure is
________.

a) Risk consideration b) Control

c) Cost of debt d) Cost of equity

13. Statement I: National Commission has a jurisdiction to entertain complaints where value of goods or services [1]

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 paid as consideration exceeds ten crores of rupees.
Statement II: If any of the parties are not satisfied by the order of National Commission can appeal against such
order to the Supreme Court of India within a period of thirty days of such order.

a) Both the Statements I and II are correct. b) Statement II is correct and Statement I is not
correct.

c) Both the Statements I and II are not correct. d) Statement I is correct and Statement II is not
correct.
14. Pawan decided to start a chocolates manufacturing business. He set the target of earning 10% profit on sales in [1]
the first year. As a good businessman, he was concerned about the future of the business, which was uncertain.
He gathered information that the demand for chocolates is increasing day-by-day. He used this information as
the base for future planning and shared it with his team. On the basis of the gathered information, he scheduled a
meeting in the following week to find innovative ways to achieve the objectives. List the first two steps, which
have been followed by Pawan that are related to the process of one of the functions of management.
a. Setting Objectives
b. Developing Premises
c. Identifying alternative courses of action
d. Evaluating alternative courses

a) c and d b) b and c

c) a and b d) a and d
15. Unfavourable financial leverage leads to: [1]

a) EPS is not affected b) Increase in EPS

c) Increase in tax d) Decrease in EPS

16. Statement I: Transportation Packaging refers to further packaging components necessary for storage, [1]
identification or transportation.
Statement II: Packaging greatly helps in identification of the products and in creating product differentiation.

a) Statement I is correct and Statement II is not b) Statement II is correct and Statement I is not
correct. correct.

c) Both the Statements I and II are not correct. d) Both the Statements I and II are correct.
17. Sanya Fashion Ltd. hired Deepak Sharma, an ace fashion designer to develop a new product line. He charged [1]
₹50 lakh for consultation. The company spent another ₹1.5 crore in formulating the marketing campaign for
launching their new product line. Their products were not liked by the consumers and the company could
generate a revenue of ₹15 lakh only from this product line. Thus, the cost incurred is not justifying the benefits
derived from the plans. Which limitation of planning is reflected in the above para?

a) Planning involves huge costs b) Planning leads to rigidity

c) Planning is time consuming d) Planning reduces creativity

18. Match the columns. [1]

Column I Column II

(a) The force that binds all other functions of management. (i) Planning

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 (b) Doing the right task, completing activities and achieving goals. (ii) Coordinating

(c) Doing the task correctly with minimum cost. (iii) Efficiency

(d) Setting goals. (iv) Effectiveness

Identify the correct option.

a) (a) - (iv), (b) - (ii), (c) - (iii), (d) - (i) b) (a) - (i), (b) - (ii), (c) - (iv), (d) - (iii)

c) (a) - (ii), (b) - (iii), (c) - (iv), (d) - (i) d) (a) - (i), (b) - (iv), (c) - (iii), (d) - (ii)
19. Firms manager their operations with varied degrees of efficiency. Operating efficiencies may reduce the level of [1]
raw materials, finished goods and debtors resulting in lower requirement of working capital. Operating
efficiency is reflected in ________.
a. a higher inventory turnover ratio and a higher trade receivables turnover ratio.
b. a lower inventory turnover ratio and a lower trade receivables turnover ratio.
c. a higher inventory turnover ratio and lower trade receivables turnover ratio.
d. a lower inventory turnover ratio and a higher trade receivables turnover ratio.

a) Option (d) b) Option (a)

c) Option (c) d) Option (b)

20. Standards are set in: [1]

a) Both qualitative and quantitative terms b) None of these

c) Qualitative terms d) Quantitative terms

21. Das is the Managing Director of Gamut Ltd., manufacturing different varieties of cheese. He has an efficient [3]
team working under him consisting of Rajat - the Production manager, Vinay - the Marketing manager and Adit
- the Finance manager. They understand and interpret the policies made by Das, ensure that their departments
have adequate manpower, assign them the necessary duties and motivate them to achieve the desired objectives.
State one more function other than those mentioned above, that this team may perform at the level they are
working.
22. The performance of an organisation depends upon how a supervisor instructs and guides the subordinates at [3]
operative level. Explain.
OR
Explain any three measures to overcome the barriers to improve communications effectiveness.
23. To avoid the problem of shortage and surplus of funds, what is required in financial management? Name the [3]
concept and explain its three points of importance.
24. Chhavi purchased a medicine. She did not read carefully the instructions on the pack of the medicine. On using [3]
it her health deteriorated further instead of improvement. She did not obtain a cash memo from the medical
store. What options are available to Chhavi under Consumer Protection Act?
OR
Give the meaning of Consumer as per Consumer Protection Act, 2019. Also state when can a consumer complain
directly in the State Commission and National Commission? If the consumer is not satisfied with the decision of
State Commission and National Commission where can he/ she appeal?
25. Give the meaning of ‘strategy’ and ‘rule’ as types of plans. [4]
OR

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 Explain any three limitations of planning function of management.
26. How does controlling helps in judging accuracy of standards and ensuring order and discipline? [4]
OR
Explain the following as steps in the process of controlling:
i. Analysing Deviations; and
ii. Taking Corrective Action
27. There are about 100 people working in Neerja Papad Udyog Private Limited. There has been going on a [4]
dispute between the management and workers over the division of profit. Recently Mrs Gurpreet Kaur has taken
over the charge as the managing director of the company. Soon after taking over the charge she made a deep
study of the present status of the company. She held a number of meetings of all the employees, each after a little
interval. In the meetings she advised the employees, We should run after not the profit but production.
Management and employees are the two wheels of the carriage of organisations. This carriage will run
effectively and efficiently only when both the wheels work properly. We both compliment each other or we both
are in need of each other. The organisation will grow and its goodwill in the market will increase only when we
both are happy.
She also assured the workers that all of them would get as much remuneration as is necessary to maintain a
reasonable standard of living. Besides, she also added that a fixed percentage of the company’s profits would be
divided with the workers.
What Mrs. Kaur said had a favourable impact on the employees. The company's problem which had continued
since long disappeared or was resolved in on time.
Identify and explain the concepts of Fayol and Taylor described in the paragraph above by quoting the relevant
lines.
28. Name the type of written communication in which two departmental heads communicate with each other. Why [4]
is this type of communication required?
29. The SEBI has imposed a penalty of Rs.7,269.5 crore on Pearls Agrotech Corporation Limited (PACL) and its [4]
four directors — Tarlochan Singh, Sukhdev Singh, Gurmeet Singh and Subrata Bhattacharya who had mobilised
funds from the general public through illegal collective investment schemes in the name of purchase and
development of agriculture land. While imposing the penalty, the biggest in its history, Securities and Exchange
Board of India (SEBI) said the company deserved "maximum penalty" for duping the common man. Its
Prevention of Fraudulent and Unfair Trade Practices Regulations provides for "severe to severe penalties" for
dealing with such violations. As per SEBI norms, it can impose a penalty of Rs.25 crore or three times of the
profit made by indulging in fraudulent and unfair trade practices and in the present case, the regulator has
imposed a fine equivalent to three times of the illicit gains.
In context of the above case:
a. State the objectives of setting up SEBI.
b. Identify the type of function performed by SEBI by quoting lines from the paragraph.
30. State any five reliefs available to a consumer under the Consumer Protection Act, 2019 when consumer court is [4]
satisfied about the genuineness of the complaint.
31. What is meant by Selection? Explain any five steps involved in the process of selection of employees. [6]
OR
Moga Industries Ltd. approached a well-established university in the city of Madurai to recruit qualified personnel
for various technical and professional jobs. They selected Tanya, Ritu, Garima, and Chetan for various vacancies in

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 the organization. After the selection and placement, 'Moga Industries Ltd.’ felt the need to increase the skills and
abilities, and the development of a positive attitude of the employees to perform their specific jobs better. The
company also realized that learning new skills would improve the job performance of the employees. Hence, the
company decided to take action for the same.
i. Name the step of the staffing process regarding which the company decided to take action.
ii. State the benefits of the action to Moga Industries Ltd.
32. Explain, with examples, the various dimensions of business environment. [6]
OR
Identify the dimensions of business environment in the following cases:
i. Hand-woven carpets are banned in some European countries as they think there can be involvement of child
labour in the manufacturing of these carpets. Products produced through the involvement of child labour are
banned in these countries.
ii. With the winning of a new party in a particular country an automobile company has decided to take back its plan
of opening 15 plants in that country.
iii. In the month of October a greeting card manufacturing company has decided to increase its scale of production of
New Year Greeting Cards.
iv. A chocolate making company has decided to make more sweetened chocolates for people living in a particular
country.
v. A super bike producing company has decided to withdraw its earlier proposal of opening 10 new plants in a
country as it finds the per capita income of that country too low to purchase its bikes in large numbers.
vi. Advertising of a particular brand is taken back as it is expected to hurt the sentiments of a particular section of
society. The company takes this decision on a conscientious level.
33. How does informal organisation support the formal organisation? [6]
34. Medi Instruments Ltd. is a company dealing in the distribution of medical instruments. The company recently [6]
imported 15000 units of sugar testing machines to test the sugar levels without taking blood samples. For
deciding the marketing strategy, the Chief Executive Officer of the company called a meeting of the marketing
heads of different zones. In the meeting, Sanjay, the North Zone Marketing Head, suggested that since the
machines were sophisticated they need to visit hospitals personally to explain its working to the hospital staff
who would be using the machines. He also suggested that additional trained people may be recruited for the
same. Hitesh another Zonal Head, added that since a lot of money had been spent on the import of the machines,
the company was short of funds to pay the additional staff, as suggested by Sanjay. Revansh, a newly appointed
Zonal Head of South Zone, suggested that since the size of the order was not large a detailed study of the factors
determining the choice of channels of distribution was required before making the right choice.
i. Identify the factors influencing the choice of channels of distribution which were discussed in the meeting.
ii. Also, explain briefly the other consideration to be taken care of in each factor identified in part.

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