Class 12 Business Studies Sample Paper 7 with Solutions (MCQs, Case-Based & Descriptive Questions)

Free CBSE Class 12 Business Studies Sample Paper (Solved)

With our free CBSE Class 12 Business Studies sample paper, you can strengthen your conceptual understanding and exam preparation skills.

Our expert BST teachers have designed this practice worksheet to cover important CBSE Class 12 topics, including Nature and Significance of Management, Principles of Management, Business Environment, Planning, Organising, Financial Management, Financial Markets, Consumer Protection, and Marketing-related concepts.

This sample paper helps students improve answer-writing ability, revise key chapters, understand case-based questions, and evaluate their preparation level before exams.

Before you proceed further, below are the quick details:

• Class: 12
• Subject: Business Studies
• Sample Paper Number: 7
• Time Allowed: 3 Hours
• Maximum Marks: 80
• Sample Paper Status (Solved/Unsolved): Solved

Table of Contents

Questions

Answers

The worksheet begins from here.

Questions

General Instructions:

• This question paper contains 34 questions. All questions are compulsory.
• This question paper is divided into four sections – A, B, C and D.
• Section A consists of Question numbers 1 to 20, carrying 1 mark each.
• Section B consists of Question numbers 21 to 24, Short Answer Type-I questions, carrying 3 marks each (50 to 75 words).
• Section C consists of Question numbers 25 to 30, Short Answer Type-II questions, carrying 4 marks each (about 150 words).
• Section D consists of Question numbers 31 to 34, Long Answer Type questions, carrying 6 marks each (about 200 words).
• There is no overall choice. However, an internal choice has been provided in 2 questions of one mark, 2 questions of three marks, 2 questions of four marks and 2 questions of six marks.
• Attempt all parts of a question together.
• The paper contains 8 pages. Kindly check before attempting it.

SECTION – A (Q.1 – Q.20 carry 1 mark each)

Q1. The market where existing (already issued) securities are bought and sold among investors is known as the:

1. Primary Market
2. Secondary Market
3. Money Market
4. New Issue Market

Q2. Which of the following is NOT a function of the Finance function of a business?

1. Estimation of capital requirements
2. Determination of capital composition
3. Deciding the price of raw material purchased in the market
4. Disposal of surplus

Q3. While purchasing a packet of tea, Simran looked for a mark on the packaging that certifies that the product conforms to government-prescribed quality standards, before making her purchase.

Which responsibility of a consumer is Simran exercising?

1. Filing a complaint for a genuine grievance
2. Buying only standardised goods
3. Asserting herself to ensure a fair deal
4. Being honest in her dealings

Q4. Statement I: In a formal organisation structure, relationships among employees are deliberately created by the management.

Statement II: Informal organisation emerges spontaneously on account of the social and psychological needs of the members.

Choose the correct option:

1. Statement I is true and Statement II is false
2. Statement I is false and Statement II is true
3. Both Statement I and Statement II are true
4. Both Statement I and Statement II are false

Q5. Assertion (A): Business environment is described as relative in nature.

Reason (R): The same environmental factor may have a different impact on different firms operating even within the same industry.

Choose the correct option:

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

OR

In July 2024, the Government of India reduced the customs duty on gold and silver from 15% to 6%. As a result, the demand for jewellery in the domestic market increased sharply.

Which dimension of business environment is highlighted in the above case?

1. Social environment
2. Economic environment
3. Technological environment
4. Legal environment

Q6. Which of the following is a single-use plan?

1. Policy
2. Rule
3. Budget
4. Method

Q7. Which of the following statements regarding Fayol's principle of ‘Unity of Command’ is TRUE?

1. An employee should receive orders from one superior only
2. An employee may receive orders from more than one superior at the same time
3. Unity of command applies only to top-level managers
4. Unity of command means all employees must follow the same working hours

Q8. Match List I (Levels of Management) with List II (Nature of Work Performed) and choose the correct option:

List I (Levels of Management)	List II (Nature of Work Performed)
(A) Top Management	(i) Framing overall organisational goals and long-term policies
(B) Middle Management	(ii) Interpreting the policies framed by top management and ensuring departments work in coordination
(C) Operational / Supervisory Management	(iii) Directly overseeing and guiding the efforts of workers to ensure quality and quantity of output

Choose the correct option:

1. A-(ii), B-(i), C-(iii)
2. A-(i), B-(ii), C-(iii)
3. A-(iii), B-(ii), C-(i)
4. A-(i), B-(iii), C-(ii)

Q9. The principle of management, ‘Subordination of Individual Interest to General Interest’, was given by ______.

1. F.W. Taylor
2. Henri Fayol
3. Elton Mayo
4. Peter Drucker

Q10. Rakesh bought a mobile phone worth ₹25,000 from an online platform. The phone stopped working within a week, and the seller refused to replace or refund it. Given that the value of goods paid as consideration is ₹25,000, which authority under the Consumer Protection Act, 2019 should Rakesh approach?

1. District Commission
2. State Commission
3. National Commission
4. Supreme Court

Q11. Neha, the finance manager of a garment company, is deciding what proportion of funds should be raised through equity shares and what proportion through debentures, keeping in mind the cost of raising funds and the risk involved.

Which financial decision is Neha undertaking?

1. Investment decision
2. Financing decision
3. Dividend decision
4. Working capital decision

Q12. A newly incorporated company, Solaris Energy Ltd., raises funds for the very first time by issuing shares to the general public through an Initial Public Offer (IPO).

This transaction takes place in the:

1. Secondary Market
2. Money Market
3. Primary Market
4. Stock Exchange

Q13. Which of the following is NOT a limitation of planning?

1. Planning may not work in a dynamic environment
2. Planning reduces creativity
3. Planning provides direction and reduces overlapping and wasteful activities
4. Planning involves huge costs

OR

Adti, the branch manager, spent considerable time preparing a detailed plan for the launch of a new product. However, before the plan could be implemented, the government suddenly changed the import duty structure, making several assumptions in her plan invalid.

Which limitation of planning is highlighted in the above case?

1. Planning leads to rigidity
2. Planning may not work in a dynamic environment
3. Planning reduces creativity
4. Planning is a time-consuming process

Q14. ______ is the process of grouping activities into departments on the basis of similarity of functions such as production, marketing and finance.

1. Delegation
2. Departmentation
3. Decentralisation
4. Divisionalisation

Q15. Assertion (A): Understanding the business environment helps a firm identify opportunities and gain the first-mover advantage.

Reason (R): An opportunity that is grabbed at the right time can bring in substantial first-mover advantage, whereas a delay may result in the opportunity being lost to competitors.

Choose the correct option:

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

Q16. Meena filed a complaint against a builder for delay in possession of her flat. The Commission, after hearing both parties, directed the builder to pay compensation for the loss and injury suffered by Meena on account of the builder’s negligence.

Which relief available to consumers under the Consumer Protection Act, 2019 is illustrated above?

1. To remove the defects from the goods
2. To discontinue the unfair trade practice
3. To pay compensation for the loss or injury suffered
4. To withdraw hazardous goods from sale

Q17. The process of estimating the amount of capital required by a business and determining its composition is known as:

1. Capital budgeting
2. Financial planning
3. Working capital management
4. Capital rationing

Q18. Mr. Verma wants to invest his surplus funds for a very short period, not exceeding one year, in a safe and highly liquid instrument.

Which segment of the financial market should Mr. Verma approach?

1. Capital Market
2. Money Market
3. Primary Market
4. Foreign Exchange Market

Q19. Which of the following statements about a ‘Divisional Structure’ of organisation is CORRECT?

1. It is formed on the basis of functions such as production, finance and marketing
2. It groups jobs on the basis of product lines, and each division functions as a profit centre
3. It restricts the development of managerial talent
4. It is more suitable for a small organisation manufacturing a single product line

Q20. Ramesh runs a small factory manufacturing furniture. He produces 100 chairs a day at a cost of ₹800 per chair, which is well within his target cost. However, due to a shortage of raw material in the market, he could not deliver the order on the promised date.

Ramesh can be described as:

1. Efficient but not effective
2. Effective but not efficient
3. Both efficient and effective
4. Neither efficient nor effective

SECTION – B (Q.21 – Q.24 are Short Answer Type-I questions, carrying 3 marks each)

Q21. “Formal organisation structure may create rigidity; however, it provides the framework necessary for effective functioning of an organisation.” Critically analyse the statement by explaining any three points of importance of formal organisation.

OR

Rina, the Managing Director of a garment company, retains authority for major policy decisions but has delegated day-to-day operational decision-making to her department heads across branches.

1. Identify the concept described above.
2. State any two points of importance of this concept.

Q22. “A financial market not only facilitates the exchange of funds but also performs several other important functions for the economy as a whole.” In light of the given statement, explain any three functions of financial markets.

Q23. “Management is often regarded as both a Science and an Art, and it is also increasingly recognised as a Profession. Do you agree with this statement? Give any three reasons to justify your answer.

OR

Two friends, Arjun and Kabir, both hold an MBA degree and work as managers in different companies. Arjun follows established management principles systematically while performing his duties, whereas Kabir applies his personal skill, creativity and experience to handle unique situations at work.

Based on the above, identify and briefly explain the two aspects of management being referred to in the case of Arjun and Kabir.

Q24. Analyse any three features of business environment that make it essential for every business enterprise to understand its environment before making key decisions.

SECTION – C (Q.25 – Q.30 are Short Answer Type-II questions, carrying 4 marks each)

Q25. Anjali purchased a washing machine from an electronics showroom. Within a month, the machine developed a manufacturing defect. When she approached the shopkeeper, he refused to repair or replace it. Anjali then filed a complaint before the appropriate consumer forum along with the bill and warranty card, and after due hearing, the Commission ordered the shopkeeper to replace the machine and pay compensation for the mental agony caused to Anjali.

1. Identify the consumer right under which Anjali can seek protection against defective goods.
2. Identify the consumer right that Anjali exercised by filing the complaint.
3. State any two responsibilities that a consumer should fulfil while making a purchase, based on the case.

Q26. Due to the rapid growth of e-commerce and digital payment systems in India, many small retailers have started selling their products online, while traditional retailers who failed to adapt are losing their customer base.

1. Identify the dimension of business environment highlighted in the case.
2. State any two other dimensions of business environment, other than the one identified above.

OR

Due to increasing awareness about environmental sustainability, consumers are increasingly preferring eco-friendly and biodegradable packaging. Many FMCG companies have begun replacing plastic packaging with recyclable materials to remain competitive.

Identify the dimension of business environment highlighted above and define it.

Q27. Mr. Suresh, the production manager, set a goal of manufacturing 10,000 units in a month. He laid down the specific procedure for the production process, framed rules for machine operation, and prepared a budget for raw material expenses.

Identify and explain any two types of plans referred to in the above case.

Q28. A hospital administrator ensures optimum use of medical staff and equipment (efficiency), while also ensuring that patients receive timely and quality treatment (effectiveness). Based on the above, explain the relationship between efficiency and effectiveness in management.

OR

Sunrise Ltd. is a company where employees from different departments work together to achieve the common goal of increasing annual turnover. The company motivates its employees through incentives, ensures optimum utilisation of scarce resources, and adapts quickly to changes in customer preferences.

Identify and explain any four features of management highlighted in the above case.

Q29. “A firm with a high proportion of debt in its capital structure enjoys the benefit of trading on equity, but it is also exposed to higher financial risk.” Critically analyse this statement with reference to financial leverage.

Q30. Priya wants to invest in the stock market. Her broker explains that the exchange where she can buy and sell listed securities acts as a mechanism for a continuous and ready market for securities, provides liquidity, ensures safety of transactions, and helps in the correct pricing of securities.

Identify the institution referred to above and explain any three of its functions, other than the ones already stated in the case.

SECTION – D (Q.31 – Q.34 are Long Answer Type questions, carrying 6 marks each)

Q31. “An organisation structure that is too rigid can limit the growth of a company, while the absence of any structure can create confusion and duplication of work.” In light of this statement, explain any six points of importance of organising as a management function.

Q32. Nova Ltd. and Zenith Ltd. are two companies, each having a total capital investment of ₹40,00,000.

Nova Ltd. has raised ₹15,00,000 through 10% Debentures and the remaining amount through Equity Shares. Zenith Ltd. has raised the entire ₹40,00,000 through Equity Shares only.

Both companies earned an EBIT (Earnings Before Interest and Tax) of ₹8,00,000 during the year. The rate of tax is 30% and the face value of each equity share is ₹10.

1. Calculate the Earnings Per Share (EPS) for both companies.
2. Identify which company is enjoying the benefit of Trading on Equity, and give a reason for your answer.

Q33. At Bright Textiles Ltd., the production manager used a scientific method to determine the correct sequence and time required for each operation of stitching a garment. He also broke down the work into specialised tasks and assigned workers according to their aptitude, providing training on the best method of performing each task. Additionally, wage rates were fixed on the basis of a differential piece-rate system to reward efficient workers.

Identify and explain any two techniques of scientific management illustrated in the above case. Also state one principle of scientific management reflected in the case.

OR

In ABC Ltd., the management studies the movements of workers while performing a task in order to eliminate wasteful motions and determine the best way of doing the job.

In XYZ Ltd., the management divides the entire work at the shop floor level into four specialised functions—planning, production, personnel and inspection—with a separate expert heading each function.

Identify and explain the techniques of scientific management used by ABC Ltd. and XYZ Ltd. respectively. Also state one more technique of scientific management other than the two identified above.

Q34. Explain any six reliefs available to a consumer under the Consumer Protection Act, 2019, if a complaint filed by him is proved.

OR

Mr. Sanjay purchased a second-hand car from a car dealer, who assured him that the odometer reading (kilometres driven) shown was genuine. Later, Mr. Sanjay discovered that the odometer had been tampered with to show a lower reading than the actual distance travelled, and that spare parts used for repair were of inferior quality, without his being informed of this fact.

1. Identify the unfair trade practices adopted by the dealer, quoting lines from the above case.
2. Suggest any three ways in which Mr. Sanjay, as a consumer, can protect himself in future while buying such products.

Answers (Coming Soon)

The End

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More Sample Papers:

Sample Paper 1  |  Sample Paper 2  |  Sample Paper 3  |  Sample Paper 4  |  Sample Paper 5  |  Sample Paper 6 | Sample 7  | Sample 8 (Solved) | Click for more sample papers

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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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Click here to access more Business Studies Class 12 educational content (worksheets, case studies, MCQs, sample papers, and more).