Roll No.: ……………….

Periodic Test - III

Class XII (2022 – 2023)
Business Studies
SET B
Time: 3 hrs. __________ M.M.: 80
General Instructions:
i. This Question paper contains five sections – A, B, C & D.
ii. Section – A contains Questions 1 to 20 carrying 1 mark each.
iii. Section – B contains Questions 21 to 24 carrying 3 marks each. Answer to these Questions may
be in about 50 to 75 words.
iv. Section – C contains Questions 25 to 30 carrying 4 marks each. Answer to these Questions may
be in about 120 words.
v. Section – D contains Questions 31 to 34 carrying 6 marks each. Answer to these Questions may
be in about 200 words.

Section A (1 Mark)
1. Identify the correct sequence of steps to be followed in an organising process. (1)
(a) Departmentalisation, Establishing reporting relationships, Assignment of duties,
Identification and division of work
(b) Identification and division of work, Departmentalisation, Assignment of duties, Establishing
reporting relationships
(c) Identification and division of work, Assignment of duties, Departmentalisation, Establishing
reporting relationships
(d) Identification and division of work, Establishing reporting relationships,
Departmentalisation, Assignment of duties

2. "One of the incentives is concerned with jobs that include greater variety of work content and
require higher level of knowledge." Identify the incentive highlighted in the given statement.
(a) Job enrichment (1)
(b) Job security
(c) Career advancement opportunity
(d) Employee recognition programme

3. The trend of health and fitness has created a demand for products like gyms, bottled mineral
water and food supplements, etc. These are examples of (1)
(a) Economic environment
(b) Legal environment
(c) Political environment
(d) Social environment

4. For the following two statements choose the correct option: (1)
Statement I: Accountability can be delegated
Statement II: Responsibility can be delegated completely
 Choose the correct option from the options given below:
(a) Statement I is correct and II is wrong
(b) Statement II is correct and I is wrong
(c) Both the statements are correct
(d) Both the statements are incorrect

5. While scrutinizing the production records, it is found that in a particular batch the rejection rate
was 5% against the set standard of 2%. The management found out that this was due to negligence
of quality control staff. This action is part of which step in the controlling process? (1)
(a) Measurement of actual performance.
(b) Comparing actual performance with standards.
(c) Analysing deviations
(d) Taking corrective action.

6. ______ is a number assigned to each transaction by the stock exchange and is printed on the
contract note. (1)
(a) Client code number
(b) Unique order code
(c) Permanent account number
(d) Depository participant number

7. Rakhi Dua is employed at the middle level management of Punjab Food Suppliers. Working in
her department she noticed that they are asked to implement the plans prepared by the top
management without making any change. Many a times, even though wishing to do so, she
cannot make any change in them. As a result of it, the initiative and creativity of the managers at
the middle level management, gets killed. Not only this, several times, even opportunities of
advantage slip out of hand. Rakhi is very unhappy with this state of affairs of the company, and
she is thinking of shifting to some other company at the earliest. Identify the limitation of
planning in the above event. (1)
(a) It fails to cope with sudden changes (b) It involves huge cost
(c) It requires critical thinking (d) It reduces creativity

8. “Sudden announcement of demonetisation by our Prime Minister" is an example of this feature

of business environment. (1)
(a) Relativity
(b) Inter-relatedness
(c) Specific and general forces
(d) Uncertainty

9. In X Ltd., the purchase department purchased 10 tonnes of raw material for the production
department. However, the production department needed just 7 tonnes. Due to this reason, goods
were over produced and were not accepted by Sales department. As a result, some goods
remained unsold. Which aspect of management is lacking? (1)
(a) Planning (b) Cooperation
(c) Coordination (d) Controlling

10. Which of the following headings does not highlight the importance of business environment?
(a) Tapping useful resources (1)
(b) Coping with rapid changes
 (c) Improving performance
(d) Promoting innovative ideas

11. _____ is about the quantum of finance to be raised from various long-term sources. (1)
(a) Investment Decision
(b) Financing Decision
(c) Dividend Decision
(d) Capital Budgeting Decision

12. _____________is a process which begins with a physiological or psychological need or

deficiency which triggers behavior or a drive that is aimed at a goal or incentive. (1)
(a) Supervision
(b) Motivation
(c) Leadership
(d) Communication

13. Demat account is opened with (1)

(a) RBI
(b) SEBI
(c) CBI
(d) Depository participant

14. When is a trade confirmation slip issued to the investor? (1)

(a) On settlement of the order
(b) On placing an order
(c) On execution of the order
(d) None of the above

15. Financial planning arrives at: (1)

(a) minimising the external borrowing by resorting to equity issues
(b) entering that the firm always have significantly more funds than required so that there is no
paucity of funds
(c) ensuring that the firm faces neither a shortage nor a glut of unusable funds
(d) doing only what is possible with the funds that the firms has at its disposal

16. Trading on Equity takes place when: (1)

(a) ROI is less than rate of interest on debt.
(b) ROI is more than the rate of interest on debt.
(c) ROI is less than the ROE.
(d) ROI is more than the ROE.

17. When Ram Singh applied for the post of Computer teacher in a school in Bhubaneswar, he was
asked to prepare a PowerPoint presentation on a particular topic during the selection procedure.
Identify the type of selection test being mentioned in the above lines. (1)
(a) Trade test (b) Intelligence test
(c) Personality test (d) Interest test

18. Match the following activities with their respective levels of management. (1)
I. Introducing a new product line and A. Top level management
 deciding the capital structure of the
company.
II. Recruitment of casual labourers. B. Middle level management
III. Devise a suitable advertising C. Supervisory or Operational level
campaign to sell a new product/ management
service a company is launching.
(a) I- A, II- B, III- C (b) I- B, II- C, III- A
(c) I- A, II- C, III- B (d) I- B, II- A, III- C

19. Which of the following is not a component of economic environment of business? (1)
(a) Interest rates
(b) Inflation rates
(c) Literacy rates
(d) Rates of savings and investments.

20. "The application of principles of management has to be changed as per requirements."

Which characteristic of management principles is highlighted above? (1)
(a) Flexible
(b) Contingent
(c) Behavioral
(d) General guidelines

Section B (3 Marks)
21. 'To promote orderly and healthy growth of securities market and protection of investors,
Securities and Exchange Board of India was set up.' With reference to this statement, explain the
objectives of Securities and Exchange Board of India. (3)
OR
Explain any three functions of stock exchange.
22. Hema is one of the most successful managers of her company, 'Kobe Ltd.' She uses her
creativity and initiative in handling challenging situations at work. The knowledge gained by her
during her student days at a renowned management institute as well as through her observation
and experience over the years is applied by Hema in a skillful manner in the context of the
realities of a given situation. She often reads books and other literature in various fields of
management to keep her knowledge updated. (1+2)
(i) An aspect of the nature of management is being highlighted in the above description. Identify
the aspect.
(ii) Explain any two features of the aspect identified in part-(i).
23. “Planning and controlling are inseparable twins”. How? (3)
OR
Explain “Management by exception” with respect to Analyzing deviations, a step in the process
of controlling. Give a suitable example.
24. In a steel plant training is given to the new employees on sophisticated machines which are not
being operated at the workplace. These machines are kept away. Actual work environment is
created inside the classroom and the trainees are guided properly there itself. Identify and
explain the type of training involved. Also categorise whether it is ‘on the job’ training or ‘off
the job training’. (2+1)

Section C (4 Marks)
25. Taylor's prescription for efficiency depends to a large extent on personnel competencies. To
increase efficiency, workers should be given the required training. Efficient employees will
produce more and earn more. Efficiency also requires the search for one best method of doing
the job. The best method chosen must lead to the determination of a fair day's work. There must
be a compensation system that differentiates those who are able to accomplish/exceed the fair
day's work. This system must be based on the premise that efficiency is the result of the joint
efforts of the managers and the workers. Thus, rather than quarreling over the share in the
resultant surplus, the workers and managers should work in harmony for maximizing the output
rather than restricting it. Identify and explain the principles / techniques of scientific
management as given by Taylor discussed above. (4)
26. Ashish, the Marketing Head, Raman, the Assistant Manager and Jyoti, the Human Resource
Manager of ‘Senor Enterprises Ltd/ decided to leave the company. The Chief Executive Officer
of the company called Jyoti, the Human Resource Manager and requested her to fill up the
vacancies before leaving the organization. Informing that her subordinate Miss Alka Pandit was
very competent and trustworthy, Jyoti suggested that if she could be moved up in the hierarchy,
she would do the needful. The Chief Executive Officer agreed for the same. Miss Alka Pandit
contacted ‘Keith Recruiters’ who advertised for the post of marketing head for ‘Senor
Enterprises Ltd. They were able to recruit a suitable candidate for the company. Raman’s
vacancy was filled up by screening the database of unsolicited applications lying in the office.
(2+2)

i) Name and explain any two types of internal/external sources of recruitment used by ‘Senor
Enterprises Ltd.’ to fill up the above stated vacancies.
ii) Also state any one merit of each of the above identified source of recruitment.
27. “A capital budgeting decision is capable of changing the fortunes of a business”. Do you agree?
Give reasons for your answer. (4)
OR
Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in
order to cater to international market. For this purpose the company needs additional Rs.
80,00,000 for replacing machines with modern machinery of higher production capacity. The
company wishes to raise the required funds by issuing debentures. The debt can be issued at an
estimated cost of 10%. The EBIT for the previous year of the company was Rs. 8,00,000 and
total capital investment was Rs. 1,00,00,000. Suggest whether issue of debenture would be
considered a rational decision by the company.
Give reason to justify your answer.
28. Explain briefly any four of the following Principles of management given by Fayol: (4)
(i) Scaler Chain
(ii) Stability of Personnel
(iii) Remuneration of employees
(iv) Subordination of individual interest to general interest
(v) Discipline
OR
Explain any four points highlighting the significance of principles of management.

29. It is heartening that the implementation of compliance requirements of the Companies Act 2013
has progressed substantially with NIFTY 500 companies. Data shows a significant increase in
women’s participation in the top management of Indian Companies from 5% few years ago to 13%
now. Even companies which are not in NIFTY 500 have undertaken drives to increase women’s
participation across different areas of work. The government had also announced that it would
support such companies. Identify and explain the dimensions of business environment discussed
above which brought about the change. (4)

30. State any four protective functions of SEBI. (4)

Section D (6 Marks)
31. The activities and employees in ‘Elegance Pvt. Ltd.’, a footwear manufacturing company, can
be broadly grouped into five departments namely; production, purchase, marketing, accounts
and personnel. Over the years the company has grown and expanded its operations manifolds.
The company now intends to diversify into leather bags segment. So its management has
decided to restructure its operations. They plan to create separate product divisions for each
product line wherein the functioning of each division will be further divided into five
departments namely; production, purchase, marketing, accounts and personnel.
In context of the above case: (1+5)
How is the company’s future organisational structures likely to be different from the existing
one? State any five points of differences between the two types of organisational structures.

32. Two years ago, Meenakshi completed her degree in food technology. She worked for some time
in a company manufacturing chutneys, pickles and murabbas. She was not happy in the
company and decided to have her own organic food processing unit for the same. She set the
objectives and the targets and formulated action plan to achieve the same. One of her objective
was to earn 10% profit on the amount invested in the first year. It was decided that raw materials
like fruits, vegetables, spices etc. will be purchased on three months credit from farmers
cultivating organic crops only. She also decided to follow the steps required for marketing of the
products through her own outlets. She appointed Sohan as Production Manager who decides the
exact manner in which the production activities are to be carried out. Sohan also prepared a
statement showing the number of workers that will be required in the factory throughout the
year. Meenakshi informed Sohan about her sales target for different products, area wise for the
forthcoming quarter. While working on the production table a penalty of 7100 per day for not
wearing the cap, gloves and apron was announced. (6)
Quoting lines from the above para identify and explain the different types of plans discussed.
OR
 After the following logical steps in the process of planning, explain the steps required to
complete the process:
(a) Setting objectives;
(b) Developing premises;
(c) Identifying alternative courses of action.
(d) Evaluating alternative courses of action
33. Jaideep recently joined as the Managing Director of Tivori Ltd., an apparel designing company.
He observed that the company had a number of experienced fashion designers on its payroll.
They regularly offered useful suggestions which were neither appreciated nor rewarded by the
company. Instead, the company outsourced its services to some renowned fashion designers and
paid them a good compensation for their services. Because of this, the employees felt
disheartened and stopped giving useful suggestions. (1+1+2+2)
(a) Identify the communication barrier discussed above.
(b) State the category of this communication barrier.
(c) Explain any two communication barriers of the same category.
(d) State any two measures to overcome the communication barriers.

34. Explain briefly any six factors affecting the fixed capital requirements of a business. (6)
OR
Explain briefly any six factors affecting the working capital requirements of a business.