CBSE Class 11 Business Studies Sample Paper 2

Class 11 Business Studies Chapter Sample Question Paper

After providing the first sample paper for Class 11 Business Studies, we decided to develop another set of CBSE Class 11 BST questions exclusively for you. 

On this page, you can take the complete BST test, which covers important MCQs, case-based questions, assertion-reason questions, and descriptive questions. 

These cover forms of business organization, business services, e-business, sources of business finance, internal trade, international business, MSMEs, social responsibility, business ethics, company formation, and public and private enterprises.

Let's start.

Table of Contents

Question Paper Answers

CBSE Class 11 Business Studies Question Paper

Maximum Marks: 80

Time: 3 Hours

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 questions carrying 3 marks may be from 50 to 75 words.
  5. Answers to questions carrying 4 marks may be about 150 words.
  6. Answers to questions carrying 6 marks may be about 200 words.
  7. Attempt all parts of a question together.

Q1. An American firm, “Zebsik Enterprise,” purchased handmade decorative pieces from India, repackaged them, and sold them in its own name to Germany. This represents: (1 Mark)

  1. Entrepot for Zebsik Enterprise, export for India, and import for Germany.
  2. Entrepot for Zebsik Enterprise, import for India, and export for Germany.
  3. Export for Zebsik Enterprise, import for India, and entrepot for Germany.
  4. Entrepot for Germany, export for India, and import for Zebsik Enterprise.

Q2. A company has to apply for the listing of shares on a stock exchange. If permission is not received, the allotment will be void. Therefore, permission shall be received within: (1 Mark)

  1. 7 weeks
  2. 10 weeks
  3. 30 days
  4. 10 days

Q3. Find any two similarities between a joint stock company and cooperative societies. (1 Mark)

  1. Limited Liability & Common Seal
  2. Separate Entity & Formation
  3. Limited Liability & Management Control
  4. Separate Entity & Service Motive

Q4. Mr. Zed, a 39-year-old young man, came to know that he was suffering from heart blockages, which needed to be operated on within the next three months. He purchased an insurance policy worth ₹10 lakh without disclosing his true clinical material facts. He got operated on, but the insurance company refused to pay the dues, stating that he had violated one of the principles of insurance. Identify it. (1 Mark)

  1. Subrogation
  2. Mitigation
  3. Insurable Interest
  4. Utmost Good Faith

Q5. This particular type of bank account is a combination of a savings bank account and a current account with term or special term deposit accounts. (1 Mark)

  1. Multiple Option Deposit Account
  2. Fixed Deposit Account
  3. Recurring Account
  4. Saving Account

Q6. Match the columns and choose the correct alternative: (1 Mark)

Column I Column II
A. B2B Commerce i. A firm's internal processes.
B. B2C Commerce ii. A part of channel through which a firm distributes its products to its customers
C. Intra-B Commerce iii. The business originates from the consumer and ultimate destination is also consumer.
D. C2C Commerce iv. Entails a wide gamut of marketing activities that are carried out online.
  1. A – iv, B – ii, C – i, D – iii
  2. A – iii, B – ii, C – i, D – iv
  3. A – ii, B – i, C – iii, D – iv
  4. A – i, B – ii, C – iii, D – iv

Q7. Read the statements carefully and choose the correct alternative: (1 Mark)

Statement I: There is high investment required for setting up an e-business.

Statement II: E-business is also helpful in personnel recruitment, selection, and training.

  1. Both statements are true.
  2. Both statements are false.
  3. Statement I is true, but Statement II is false.
  4. Statement II is true, but Statement I is false.

Q8. Identify the internal source of finance from the following. (1 Mark)

  1. Trade Credit
  2. Debentures
  3. Equity Shares
  4. Inter Corporate Deposits

Q9. Every day, an ice-cream vendor appears in front of your school. Name the type of retailer referred to here. (1 Mark)

  1. Peddlers and Hawkers
  2. Market Traders
  3. Street Traders
  4. Single Line Stores

Q10. Assertion (A): Bank Credit is a permanent source of finance. (1 Mark)

Reason (R): Though banks have started extending loans for longer periods, generally such loans are used for medium to short periods.

  1. Both A and R are correct, but R is not the correct explanation of A.
  2. Both A and R are false.
  3. A is false, but R is true.
  4. Both A and R are true, and R is the correct explanation of A.

Q11. Rahi Ltd. is a company dealing in organic products. The company requires funds for the short term in order to meet additional demand during the festival season. The financial manager of the company suggested that the company could borrow funds from Rare Limited. Rare Limited deals in FMCG products. Identify the suitable source for raising funds to be used by the financial manager in the above case. (1 Mark)

  1. Inter Corporate Deposits
  2. Trade Credit
  3. Cash Credit
  4. Bank Overdraft

Q12. A patent grants exclusive rights to the inventor for a period of ____ during which anybody else who wishes to use the patented subject matter needs to seek permission from the patentee by paying a certain cost for the commercial use of such an invention. (1 Mark)

  1. 2 years
  2. 5 years
  3. 10 years
  4. 20 years

Q13. Mohan invested ₹5,00,000 in the debentures of Venus Ltd. The return on his investment is called _____. (1 Mark)

  1. Profit
  2. Dividend
  3. Interest
  4. Shares

Q14. Jasbir is running an artificial jewellery business on the basis of advertisements only. She has not opened any shop and delivers goods to her customers through courier. Identify the type of retail trade that Jasbir is running. (1 Mark)

  1. Export Trade
  2. Chain Stores
  3. Mail Order Houses
  4. Single Line Stores

Q15. It is a guarantee issued by the importer's bank that it will honour payment up to a certain amount of export bills to the bank of the exporter. Identify the document. (1 Mark)

  1. Letter of Indemnity
  2. Indent or Order
  3. Letter of Credit
  4. Bill of Exchange

Q16. Which of the following documents is not required for obtaining an export licence? (1 Mark)

  1. IEC Number
  2. Letter of Credit
  3. Registration-cum-Membership Certificate
  4. Sight Draft

Q17. GST is the single comprehensive ____________ tax on the supply of goods and services. (1 Mark)

  1. Direct
  2. Indirect
  3. Personal
  4. Impersonal

Q18. Which of the following documents is not required in connection with an import transaction? (1 Mark)

  1. Bill of Lading
  2. Shipping Bill
  3. Certificate of Origin
  4. Shipment Advice

Q19. Which of the following statements is FALSE for the MSME sector in India? (1 Mark)

  1. The MSME sector is the second-largest employer of human resources after agriculture.
  2. MSME is considered to be less labour-intensive and more capital-intensive.
  3. MSME in our country supplies an enormous variety of products, which include mass-consumption goods, etc.
  4. MSME is considered to be more labour-intensive and less capital-intensive.

Q20. The basic objective of the Start-up India scheme is: (1 Mark)

  1. To trigger an entrepreneurial culture and inculcate entrepreneurial values.
  2. To create awareness about the charms of being an entrepreneur.
  3. To create a strong ecosystem for nurturing innovation and start-ups in the country.
  4. To encourage more dynamic start-ups by motivating educated youth towards entrepreneurship as a viable career.

Q21. Mohan, after completing his MBA from a reputed college, returned to India. He hired a cab (taxi) from the airport to his house at a fare of ₹3,000, as no cab was ready to go by the meter. On the way, he got an idea to start a kind of cab facility in which all the cabs of his business would run on meters, and the total amount of fare would be known to the passenger before boarding his company's cab. He analysed the idea for its operational viability and was also able to arrange the funds required to start the business, as the idea seemed to be profitable. Hence, Mohan decided to start a company with the name “Cab Convenience”.

In the above paragraph, Mohan has performed a few steps of one of the stages of company formation. Explain the next three steps to be performed by Mohan to complete this stage of formation. (3 Marks)

Q22. Explain any three functions of commercial banks. (3 Marks)

OR

Explain any three types of digital modes of payment.

Q23. Life Insurance Corporation of India is the largest insurance company in India. It is headquartered in Mumbai. It was founded in the year 1956, when the Parliament of India passed the Life Insurance Corporation of India Act, which nationalised the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state-owned Life Insurance Corporation. (3 Marks)

  1. Life Insurance Corporation is classified as which form of public sector enterprise?
  2. State any two features that highlight Life Insurance Corporation of India as the particular form of public sector enterprise identified in part (a).

OR

With exponential growth seen in domestic transportation and the need for additional metro rail infrastructure, the government has decided to offer more metro networks to private parties for operations and management. In Delhi, 30 metro stations needed to be revived and upgraded in the coming years to support double-digit growth in the sector. This would require huge private investment, as public funds are limited for infrastructure development. In February 2017, the Central Government announced that metro rail infrastructure would be built by state-owned enterprises, local and international, in Delhi, Mumbai, Bangalore, and Hyderabad with private developers.

Identify the type of enterprise discussed in the above paragraph. Also, state its two features.

Q24. Following is the capital structure of ABZ Ltd., composed of different sources of finance. (3 Marks)

Source of Finance Amount
8% Debentures ₹ 50,000
10% preference share capital ₹ 1,00,000
Equity share capital ₹ 1,00,000

Profits of the company for the year 2017–18 are ₹50,000.

  1. From the above sources of finance, identify the source of finance that provides tax benefits to the organisation.
  2. State any two preferential rights available to preference shareholders over equity shareholders.

Q25. With reference to the following items, identify and explain the types of intellectual properties. (4 Marks)

  1. Darjeeling Tea
  2. Registered Brand Name

Q26. “The fundamental reason behind international business is that every country cannot produce equally well or cheaply all that it needs; hence, international business is required.” Explain any four rationales for the same. (4 Marks)

OR

“International trade is not only beneficial to countries, but it also works for the well-being of the industries and trade of these countries.” Explain the rationale for the same.

Q27. Harsh runs an online store dealing in all kinds of household items, which he procures from different dealers. His friend Lakshay runs a store through which he sells all kinds of organic products, such as spices, pickles, jams, etc. These products are produced in his automated manufacturing unit in Kerala. (4 Marks)

  1. Identify the two concepts undertaken by Harsh and Lakshay, respectively.
  2. Differentiate between the concepts identified in part (a) on the basis of:
    • Shape
    • Transaction risk
    • Nature of human capital

Q28. Explain any four arguments for social responsibility. (4 Marks)

OR

Explain any four elements of business ethics.

Q29. Mohit and Sumit are friends. They have to attend the birthday party of a common friend. Mohit goes to “Poshak Kids Wear,” which deals exclusively in kids' wear, with his parents to get a new dress for the party, whereas Sumit purchases his dress from “Reliance Mart,” and his mother purchases groceries from the same store. (4 Marks)

  1. Identify the types of stores that Mohit and Sumit visited.
  2. Explain any one feature of each store identified in part (a).

Q30. The banking system in India dates back to 1750 B.C., and there is evidence of loans from the Vedic period. From the writings of many foreign travellers during the Mughal period, we came to know about the use of various instruments in the great commercial centres of that time. During the Mughal period, historians found evidence of loans known as “dastawez” of two types: one was payable on demand, and the other was payable after a stipulated time. The most important class of credit instruments of exchange evolved in India at that time. Their use was most widespread in the twelfth century and has continued till today. These instruments were famous in many trade centres of that time, such as Mathura, Kaveripatta, and Broach. (4 Marks)

  1. Identify the instruments of exchange prominent in the great ancient commercial centres of India.
  2. Also state the commercial importance of the trade centres mentioned in the paragraph.

Q31. A, B, C, and D are partners in a firm with unlimited liability. But after 1991, B and C decided that they did not want to bear unlimited risk. With the consent of all the partners, they made amendments to the partnership deed and changed their liability clause, under which the members are now responsible for losses only to the extent of the capital invested by them. (6 Marks)

  1. Identify the types of partnership formed before and after 1991.
  2. State any two differences between the types of partnership identified in part (a).
  3. Also explain any three advantages of the partnership form of business organisation.

OR

The private sector comprises various types of business organisations. However, there is a form of business organisation that restricts the right to transfer ownership in one of its types, while the other type of the same business organisation allows its owners to transfer their ownership rights.

  1. Identify the types of the form of business organisation highlighted in the above paragraph.
  2. State any five differences between the types identified in part (a).

Q32. Excel Ltd. has received an order to export 2,000 sewing machines to Swift Import Ltd. of Spain. Explain briefly the first six steps that Excel Ltd. would need to go through for executing the export order. (6 Marks)

Q33. Deepak Beverages Ltd. is planning to expand its operations. Therefore, the Board of Directors planned to issue shares worth ₹10,00,000. However, it is facing some short-term financial difficulty and, therefore, does not have sufficient funds to meet the cost of issuing shares. The company invited deposits from the general public for 6 months at a 15% p.a. rate of interest and issued a deposit receipt as an acknowledgement by the company. In this way, the company was able to meet its short-term financial need. (6 Marks)

  1. Identify and specify the type of fund that Deepak Beverages Ltd. raised in the above case.
  2. Also state any three merits and two demerits of the specified fund identified in part (a).

Q34. Umesh established “Niger” in 2021 in the USA. The powers, rules, and regulations of “Niger” were decided according to USA norms. Niger established its trade projects in different parts of the world to increase its market territory, which led to greater revenue and higher efficiency. (6 Marks)

  1. How will “Niger” be categorised as a private sector enterprise?
  2. State any five features of this private sector enterprise.

OR

BHEL was founded in the year 1964 by the Government of India. It is the largest power plant equipment manufacturer in the country, with a 74% market share in the power sector. It has a network of 17 manufacturing units, 2 repair units, 4 regional offices, 8 service centres, and infrastructure allowing it to execute more than 150 projects at sites across India and abroad. It was granted the prestigious Maharatna status in 2013 by the Government of India. Maharatna status allows the Board of this company enhanced financial and operational autonomy.

In the context of the above case:

  1. How will BHEL be classified as a form of public sector enterprise?
  2. State any four features of the form of public sector enterprise identified in part (a).
  3. Briefly state “Operational Autonomy” as a merit of the type of public sector enterprise identified in part (a).

Answers

Q1.

Answer: (a) Entrepot for Zebsik Enterprise, export for India & import for Germany.

Q2.

Answer: (b) 10 weeks

Q3.

Answer: (c) Limited Liability & Management Control

Q4.

Answer: (d) Utmost Good Faith

Q5.

Answer: (a) Multiple Option Deposit Account

Q6.

Answer: (a) A – iv, B – ii, C – i, D – iii

Q7.

Answer: (d) Statement II is true, Statement I is false.

Q8.

Answer: (c) Equity

Q9.

Answer: (a) Peddlers and Hawkers

Q10.

Answer: (c) A is false, but R is true.

Q11.

Answer: (a) Inter Corporate Deposits

Q12.

Answer: (d) 20 years

Q13.

Answer: (c) Interest

Q14.

Answer: (c) Mail Order Houses

Q15.

Answer: (c) Letter of Credit

Q16.

Answer: (d) Sight Draft

Q17.

Answer: (b) Indirect

Q18.

Answer: (b) Shipping Bill

Q19.

Answer: (b) MSME is considered to be less labour intensive and more capital intensive.

Q20.

Answer: (c) To carve a strong ecosystem for nurturing innovation & start-ups in the country.

Q21.

Answer: The next three stages of the Promotion step are:

  1. Fixing of signatories to the Memorandum of Association
  2. Appointment of Professional
  3. Preparation of necessary documents

Q22.

Answer: Functions of Commercial Banks:

  1. Acceptance of Deposits
  2. Lending of Funds
  3. Cheque Facility

(or any other relevant point)

OR

Digital Modes of Payment:

  1. Debit Card
  2. Electronic Fund Transfer
  3. Mobile Wallets

(or any other relevant point)

Q23.

Answer:

  1. Statutory Corporation
  2. Features of Statutory Corporations:
    1. Set up under an Act of Parliament
    2. Wholly owned by the State

(or any other relevant point)

OR

Public Private Partnership

Features:

  1. Contract with the private party to design and build a public facility.
  2. Facility is financed and owned by the public sector.

(or any other relevant point)

Q24.

Answer:

  1. Debentures
  2. Preferential rights of Preference Shares:
    1. Receiving a fixed rate of dividend out of the net profits of the company before any dividend is declared for equity shareholders.
    2. Receiving their capital after the claims of the company’s creditors have been settled.

Q25.

Answer:

  1. Geographical Indication: It is primarily an indication which identifies agricultural, natural or manufactured products originating from a definite geographical territory.
  2. Trade Mark: It is any word, name or symbol that lets us identify the goods made by an individual, company or organisation, etc.

Q26.

Answer: Benefits of International Trade to Nations:

  1. Earning of foreign exchange
  2. More efficient use of resources
  3. Improving growth prospects
  4. Increased standard of living

(or any other relevant point)

OR

Benefits of International Trade to Firms:

  1. Prospects for higher profits
  2. Increased capacity utilisation
  3. Prospects for growth
  4. Improved business vision

(or any other relevant point)

Q27.

Answer:

  1. Traditional Business and E-business
  2. Differences between Traditional Business and E-business:
    • Shape of organisational structure: Traditional Business – Vertical/Tall; E-business – Horizontal/Flat
    • Transaction risk: Traditional Business – Low; E-business – High
    • Nature of Human Capital: Traditional Business – Semi-skilled and even unskilled; E-business – Technically and professionally qualified

Q28.

Answer: Arguments for Social Responsibility:

  1. Justification of existence and growth
  2. Long-term interest of the firm
  3. Avoidance of government regulation
  4. Maintenance of the society

(or any other relevant point)

OR

Elements of Business Ethics:

  1. Top management commitment
  2. Publication of Code
  3. Establishment of compliance mechanisms
  4. Involving employees at each level
  5. Measuring results

(Any four points)

Q29.

Answer:

  1. Types of Retailers:
    1. Speciality Stores
    2. Departmental Stores
  2. Features:
    • Speciality Stores: Located in a central place where a large number of customers can be attracted.
    • Departmental Stores: It provides all facilities such as restaurant, trade and information, etc.

(or any other suitable points)

Q30.

Answer:

  1. The instruments of exchange prominent in the great ancient commercial centres of India are:
    • Darshani Hundi
    • Muddati Hundi
  2. The commercial importance of the trade centres mentioned in the paragraph is:
    1. Mathura: Emporium of trade, and many routes from South India touched Mathura.
    2. Kaveripatta: Centre of trade for perfumes, cosmetics and wool, etc., and also for shipbuilding.
    3. Broach: Situated on the bank of river Narmada and linked with all important marts by roadways.

Q31.

Answer:

  1. General Partnership and Limited Partnership
  2. Differences between General Partnership and Limited Partnership:
    • Liability: General Partnership – Unlimited and joint; Limited Partnership – At least one partner is limited, rest unlimited.
    • Registration: General Partnership – Optional; Limited Partnership – Compulsory.
  3. Advantages of Partnership form of business:
    1. Ease of formation & closure
    2. Balanced decision making
    3. More funds

(any other relevant point)

OR

  1. Private Company & Public Company
  2. Differences between Private Company and Public Company:
    • Members: Private Company – Minimum 2, Maximum 50; Public Company – Minimum 7, Maximum unlimited.
    • Directors: Private Company – 2; Public Company – 3.
    • Paid-up Capital: Private Company – ₹1 lakh; Public Company – ₹5 lakh.
    • Index of Members: Private Company – Not compulsory; Public Company – Compulsory.
    • Transfer of Shares: Private Company – Restriction; Public Company – No restriction.

Q32.

Answer: The first six steps of the export procedure are:

  1. Receipt of enquiry and sending quotation
  2. Receipt of order or indent
  3. Assessing importer’s creditworthiness and securing guarantee for payments
  4. Obtaining export licence
  5. Obtaining pre-shipment finance
  6. Production or procurement of goods

Q33.

Answer:

  1. Public Deposits

  2. Merits:

    1. The procedure of obtaining deposit is simple.
    2. No dilution in the control of the company.
    3. It does not create any charge on the assets of the business.

    (or any other relevant points)

    Demerits:

    1. Not suitable for new organisations.
    2. Unreliable source of finance.

(or any other suitable points)

Q34.

Answer:

  1. Global Enterprises
  2. Features:
    1. Huge capital resources
    2. Foreign collaboration
    3. Advanced Technology
    4. Product innovations
    5. Marketing strategies

(or any other relevant points)

OR

  1. Government Company
  2. Features:
    1. Company can enter into a contract and can acquire property in its name.
    2. Company can file a suit in a court of law against any third party and be sued.
    3. The management of the company is regulated by the provisions of the Companies Act.
    4. The government company obtains its funds from government shareholding and other private shareholders.
  3. Operational Autonomy: Government Company enjoys autonomy in all management decisions and takes actions according to business prudence.

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
👉
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