CBSE Class 11th Business Studies Question Paper - TS4 (5 Question Papers)

Business Studies - Class 11th (CBSE) - 5 Question Papers Included for Chapter 4: Business Services

As a Class 11th student, how would you feel when your Business Studies teacher asks you to practice as many question papers as possible for CBSE Class 11 Business Studies Chapter 4 (Business Services)? Your first priority is to search for important questions, MCQs, case study questions, sample papers, and answers.

And voilà! You have landed at the right place. Practice new question papers to cover topics like banking services, insurance, e-banking, bank overdraft, cash credit, and RTGS to improve your conceptual knowledge and score higher in exams.

Here are the quick details:
  • Class: XI
  • Subject: Business Studies
  • Chapter Number: 4
  • Chapter Name: Business Services
Below are the links to the tests:

Test 1

  • Time: 1 hour
  • Maximum Marks: 30
Question 1: ABC Ltd. is a business customer of XYZ Bank. It uses a ______ account for day-to-day transactions, enjoys an overdraft facility, and occasionally applies for bank drafts for payments to suppliers. Which type of bank account is suitable for businesses like ABC Ltd.? [1]
  1. Fixed Deposit Account
  2. Savings Account
  3. Current Account
  4. Recurring Deposit Account
Question 2: Analyse the image of a cheque with “Pay to the order of” and mention the service depicted: [1]
An image showing a cheque
  1. Bank Draft
  2. Bank Overdraft
  3. Fixed Deposit
  4. Cash Credit
Question 3: XYZ Enterprises recently deposited a large sum in a ______ account, as it wanted to earn higher interest on idle funds. The deposit has a maturity period of 2 years, and the funds cannot be withdrawn before that without penalties. Which type of bank account is XYZ Enterprises using? [1]
  1. Savings Account
  2. Current Account
  3. Fixed Deposit Account
  4. Recurring Deposit Account
Question 4: Match the columns: [1]
S. No. Column 1 S. No. Column 2
1. Current Account a. Withdrawal restrictions
2. Savings Account b. Unlimited deposits and withdrawals
3. Fixed Deposit c. Offers an overdraft facility
4. Recurring Deposit d. Regular savings on a monthly basis
  1. 1-c, 2-a, 3-d, 4-b
  2. 1-b, 2-c, 3-a, 4-d
  3. 1-c, 2-b, 3-a, 4-d
  4. 1-d, 2-b, 3-c, 4-a
Question 5: [1]
  • Statement 1: Life insurance provides financial protection to the family of the insured after their death.
  • Statement 2: Marine insurance covers losses during air transport.
  1. Both statements are true.
  2. Statement 1 is true, but Statement 2 is false.
  3. Statement 1 is false, but Statement 2 is true.
  4. Both statements are false.
Question 6: [1]
  • Assertion (A): Fixed deposit accounts offer higher interest rates than savings accounts.
  • Reason (R): Fixed deposit accounts allow unlimited withdrawals without penalties.
  1. Both (A) and (R) are true, and (R) is the correct explanation of (A).
  2. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
  3. (A) is true, but (R) is false.
  4. (A) is false, but (R) is true.
Read the following case and answer Questions 7–10 on the basis of the same.

Banks offer a variety of services, including bank drafts, bank overdrafts, and cash credit. Bank drafts are prepaid negotiable instruments commonly used for secure payments. A bank overdraft allows account holders to withdraw more than the available balance and is often used by businesses. Cash credit is a short-term loan provided by banks against security. With the advent of technology, e-banking services such as NEFT, RTGS, and mobile wallets have simplified transactions.

Question 7: What is a bank draft used for? [1]
  1. Long-term investments
  2. Secure payments
  3. Cash withdrawal
  4. Paying loan instalments
Question 8: Which service allows withdrawal beyond the available account balance? [1]
  1. NEFT
  2. Bank Overdraft
  3. Cash Credit
  4. RTGS
Question 9: What is the security-based loan offered by banks called? [1]
  1. Fixed Deposit
  2. Savings Account
  3. Cash Credit
  4. Bank Overdraft
Question 10: Which digital payment method is used for instant fund transfers between banks? [1]
  1. Bank Draft
  2. Mobile Wallets
  3. NEFT
  4. RTGS
Question 11: “Bank overdraft is a facility that allows customers to withdraw more money than is available in their account, up to an agreed limit.” Explain the importance of a bank overdraft for businesses in managing short-term financial needs. [3]

Question 12: ABC Ltd. has an agreement with its bank to withdraw an amount beyond the funds available in its account for emergency cash-flow management. This facility has helped the company pay its suppliers on time during a short-term financial crunch. Identify the banking service availed of by ABC Ltd. and explain its significance in maintaining operational efficiency. [3]

Question 13: Discuss how e-banking services have transformed traditional banking methods. [4]

Question 14: Compare the features of life insurance and health insurance. [4]

Question 15: XYZ Insurance Co. provides a range of services, including life, health, fire, and marine insurance. Recently, the company insured a factory against fire damage. The client had to provide full disclosure of the factory’s conditions before the policy was issued. In case of a claim, XYZ Insurance evaluates the cause of the fire to ensure that it aligns with the agreed terms. Identify and explain three principles of insurance that are evident in the case study, and analyse how they protect both the insurer and the insured. [6]

Answers

1. Option (C) is correct.

Explanation: Current accounts are designed for businesses that require frequent and unlimited transactions. They also offer additional services, such as overdraft facilities and the issuance of bank drafts.

2. Option (A) is correct.

Explanation: The phrase “Pay to the order of” on a cheque indicates that it is a bank draft, which is a prepaid negotiable instrument used for secure payments.

3. Option (C) is correct.

Explanation: Fixed deposit accounts lock funds for a specific period, offer a higher interest rate, and impose penalties for early withdrawals.

4. Option (C) is correct.

Explanation:
  • Current Account: Offers an overdraft facility.
  • Savings Account: Allows unlimited deposits and withdrawals.
  • Fixed Deposit: Has withdrawal restrictions.
  • Recurring Deposit: Involves regular monthly savings.
5. Option (B) is correct.

Explanation: Life insurance provides financial protection after death, while marine insurance covers losses during water transport, not air transport.

6. Option (C) is correct.

Explanation: Fixed deposits indeed offer higher interest rates, but they do not allow unlimited withdrawals without penalties.

7. Option (B) is correct.

Explanation: Bank drafts are used for secure payments, as they are prepaid and ensure that funds are available.

8. Option (B) is correct.

Explanation: A bank overdraft enables account holders to withdraw more than the available balance, up to a pre-agreed limit.

9. Option (C) is correct.

Explanation: Cash credit is a short-term loan provided by banks against collateral or security.

10. Option (D) is correct.

Explanation: RTGS (Real-Time Gross Settlement) is a digital payment method used for instant and large fund transfers between banks.

11. Bank overdrafts help businesses maintain liquidity during short-term cash-flow challenges. They ensure timely payments to suppliers, prevent disruptions in operations, and help businesses avoid penalties or loss of reputation.

12. The banking service availed of by ABC Ltd. is Bank Overdraft.

The significance of a bank overdraft in maintaining operational efficiency is that the overdraft facility enables ABC Ltd. to address temporary cash-flow shortages, ensuring that suppliers are paid on time, which sustains trust and smooth business operations.

13. E-banking services such as NEFT, RTGS, mobile wallets, and internet banking have made banking convenient and accessible 24/7. Customers can transfer funds instantly, check account balances, and manage transactions without visiting a branch, reducing operational costs and saving time.

14. The following is a comparison of the features of life insurance and health insurance:
Feature Life Insurance Health Insurance
Objective Financial protection for dependants after death. Coverage for medical expenses.
Policy Term Long-term or whole-life policies. Annual or short-term policies.
Payout Lump-sum payment upon death or maturity. Reimbursement of medical costs or cashless claims.
Benefits Covers life risk. Provides health-related financial security.
15. Principles Identified:
  • Utmost Good Faith:
    • Both parties must disclose all relevant information. The client’s disclosure of the factory’s conditions ensures an accurate risk assessment and prevents disputes later.
  • Causa Proxima (Proximate Cause):
    • The insurer evaluates the cause of the fire to ensure that it aligns with the terms, ensuring that claims are fair and valid.
  • Indemnity:
    • The insurer compensates only for the actual loss, preventing profit from claims and ensuring fairness for both parties.
Analysis: These principles ensure trust, prevent fraud, and provide equitable protection. They safeguard the insured against unforeseen losses while enabling the insurer to manage risks effectively.

The End

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A List of Notes:
Chapter 1  |  Chapter 2  |  Chapter 3  |  Chapter 4  |  Chapter 5  |  Chapter 6  |  Chapter 7  |  Chapter 8  |  Chapter 9  |  Chapter 10  |  Chapter 11  |  Chapter 12

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