ANSWERS
Self-Assessment Paper-1
Business Studies
1. Option (B) is correct.
Explanation: The scenario mentions that the
company's executives understand that CSR
can promote respect for their company in the
marketplace, resulting in higher sales and enhancing
employee loyalty. These outcomes are associated
with the social objective of CSR.
By engaging in CSR initiatives, the company is not
only addressing social and environmental concerns
but also improving its reputation and relationships
with customers and employees. This social aspect
of CSR can positively impact the company's market
position and increase its goodwill.
2. Option (D) is correct.
Explanation: Limited resources, unlimited liability,
and limited managerial ability are all factors that can
restrict the growth potential of sole proprietorships.
3. Option (B) is correct
4. Option (A) is correct.
Explanation: Registered post is an Indian Postal
Department service, similar to an ordinary post,
providing additional facilities like safe delivery, the
signature of the recipient at the time of delivery,
extra cover (insurance) and proof of delivery.
5. Option (D) is correct.
Explanation: The shipping bill is the main
document on the basis of which customs office
grants permission for the export. The shipping bill
contains particulars of the goods being exported,
the name of the vessel, the port at which goods
are to be discharged, country of final destination,
exporter’s name and address, etc.
6. Option (A) is correct.
Explanation: Retailers who do not have any fixed
place to carry out their business activities are known
as itinerant traders. They have to move from one
place to another along with their goods in search of
consumers.
7. Option (B) is correct.
Explanation: NABARD established by the
government in 1982 to give action and to promote
the rural industries.
8. Option (A) is correct.
Explanation: Bank Overdraft is a facility provided
by banks to their customers who hold current
accounts. It allows the account holder to withdraw
more money from the account than the actual
balance available, up to a certain limit agreed upon
with the bank. In other words, it allows customers
to have a negative balance in their current account
temporarily.
In Rajan's case, when he needed money more than
the balance in his account, he can arrange with the
bank for an overdraft facility. This means the bank
will allow him to withdraw an amount exceeding the
balance in his account, up to the agreed overdraft
limit. This can be a helpful facility for customers
who face temporary cash flow issues or unexpected
expenses.
9. Option (D) is correct.
Explanation: Large storage facilities to store the
materials is not an issue typically faced by small
businesses. Small businesses may not have the need
for extensive storage facilities if their production
scale and volume are relatively smaller compared to
larger enterprises.
10. Option (A) is correct.
Explanation: Businesses are responsible for a lot
of social problems. Hence, it is the duty of the
businesses to take care and deal with the social
problems as a part of their social responsibility.
11. Option (B) is correct.
Explanation: Business enterprises have started
realising the fact that social interest and business
interest are not contradictory. Instead, these are
complementary to each other. The feeling that
business can grow only through exploitation of
society has given way to the belief that long-term
benefit of business lies in serving the society well. So
also, a useful institution like business is recognised
as an essential element of a modern civilised society.
12. Option (A) is correct.
Explanation: Top management has a crucial role in
guiding the entire organisation towards ethically
upright behaviour. To achieve results, the Chief
Executive Officer (CEO) and other higher-level
managers need to be openly and strongly committed
to ethical conduct. They must give continuous
leadership for developing and upholding the values
of the organisation.
13. Option (D) is correct.
Explanation: Under e-bidding one can bid for the
goods and services online. It also provides the
facility for e-tendering under which quotation
can be submitted online. E-trading involves
trading of securities like shares and other financial
instruments. The securities are bought and sold
online.
2 Oswaal CBSE Sample Question Papers, BUSINESS STUDIES, Class-XI
14. Option (C) is correct.
15. Option (C) is correct.
Explanation: Post offices in India offer various
financial services to the public, including recurring
deposits (A), savings accounts (B), and time deposits
(D). These services allow individuals to save and
invest their money with the post office.
However, post offices in India do not provide loans
to customers. Unlike banks and some other financial
institutions, post offices do not offer lending services
or provide loans to individuals or businesses.
16. Option (C) is correct.
Explanation: In case of Life Insurance, the subject
matter of life insurance is human life. This statement
is true because life insurance policies are designed
to provide financial protection to the beneficiaries
in the event of the insured person's death. The life
of the insured person is the subject matter of the life
insurance contract. In life insurance, the insurable
interest must be present at the time of the contract.
This statement is also true. Insurable interest refers
to a financial interest that a person has in another
person's life. In life insurance, the policyholder
must have an insurable interest in the insured
person's life at the time the insurance contract is
entered into. This ensures that the policy is based
on a legitimate financial interest and prevents the
possibility of speculative insurance contracts.
17. Option (A) is correct.
Explanation: Red-tapism refers to excessive
bureaucratic procedures and paperwork that often
lead to delays and inefficiencies in decision-making
processes. In the given scenario, Sarvesh is working
in the State Electricity Board, which is a public
sector organization. Public sector organizations
are often associated with a more bureaucratic and
slow decision-making process due to various factors
such as organizational structure, government
regulations, and hierarchical systems.
The delay in getting the electricity connection, as
mentioned in the scenario, indicates a bureaucratic
and slow process, which is characteristic of red-
tapism. This delay contrasts with Mr. Gajendra's
experience with Kotak Mahindra Bank, a private
sector organization, where he received a home loan
quickly and efficiently.
18. Option (A) is correct
19. Option (C) is correct.
Explanation: The deposits that are raised by
organisations directly from the public are known as
public deposits. Rates of interest offered on public
deposits are usually higher than that offered on
bank deposits. Any person who is interested in
depositing money in an organisation can do so by
filling up a prescribed form.
20. Option (B) is correct.
Explanation: Business ethics refer to the socially
determined moral principles which should govern
business activities. A few examples of business ethics
are: charging fair prices from customers, using fair
weights for measurement of commodities, giving fair
treatment to workers and earning reasonable profits.
A businessperson behaves ethically when her or his
actions are upright and serve the interests of society.
21. No, insurance compensation cannot be treated as
the income of HUF. It is an individual asset. On the
death of Mr. Ram, this money should be handed
over to his son, as this will be a compensation for
the loss of his father. [3]
22. This statement indicates that the following
systems are necessary for successful e-business
implementation:
(i) Proper computerised system: There should
be a proper computerised system consisting of
computer hardware and matching computer
software.
(ii) Effective telecommunication: Effective
telecommunication should be used as a channel
of communicating with others.
(iii) Well-designed websites: Websites meant for
e-business should be designed in such a way
that it is effective in providing information to
customers and serves as a means of product
promotion. [1×3=3]
OR
The two applications of e-business are:
(i) B2B: Business to Business commerce involves
business transactions between business
organisations. All business firms buy (or sell)
raw materials, machines and other inputs and
services to carry out their business processes.
In doing so, firms have to maintain a good
relationship with their distributors, suppliers
and vendors. In this context, B2B e-commerce
enables businesspersons to strengthen their
communication and distribution networks,
facilitating the smooth transfer of information,
technological know-how and money.
(ii) B2C: Business-to-Customers involves
transactions between a business firm and its
customers. B2C e-commerce transactions not
only include activities such as sale or purchase
of goods and services but also other marketing
activities through the online mode. It basically
involves pre-sale activities (such as promoting
products through advertisements) and pre-sale
services (such as providing product information
and cash-on-delivery services) besides post-
sale services (such as customer care services).
e-commerce enables business firms to conduct
these activities faster and at much lower costs.
 [1 12 +1 12 =3]
23. (a) Retained earnings will be most suitable for
them.
(b) The merits of retained earnings are:
 Retained earnings is a permanent source of
funds available to an organisation;
 It does not involve any explicit cost in the

form of interest, dividend or floatation cost.
[1+2=3]
24. Three advantages of issuing debentures are:
(i) The issue of debentures is suitable in the situation
when the sales and earnings are relatively stable.
(ii) As debentures do not carry voting rights
financing through debentures does not dilute
control of equity shareholders on management.
(iii) Debentures are fixed charged funds and do not
participate in profits of the company.  [1×3=3]
Commonly Made Error
Students end up writing very briefly for 3- or
4-marks questions.
Answering Tips
Students should focus on the type of question
they are answering and should write
appropriate length of answer.
Writing short and crisp sentences is acceptable
but students should remember to give elaborate
explanations depending on the marks allotted.
OR
Bonds are issued as long-term financial instruments
by the Central Government, State Government or
any specialised financial institution.
These are some fine differences between
debentures and bonds:
(i) A debenture may be issued by creating charge
on the company’s assets or without this charge.
A bond can be issued only by creating charge
on the assets.
(ii) A debenture may be redeemed in instalments
while a bond is redeemed in lump sum
[1+2=3]
25. (i) 
Business risks arise due to uncertainties:
Uncertainty refers to the lack of knowledge
about what is going to happen in future.
Uncertainty creates risks for business because
the outcomes of these future events are not
known. Examples: Natural calamities, change
in demand and prices, changes in government
policies and prices, improvement in technology,
etc.
(ii) Risk is an essential part of every business:
Every business has some risk. No business can
avoid risk. The amount of risk may vary from
business to business. Risk can be minimised,
but cannot be eliminated  [2×2=4]
OR
(a) An economic activity: Business is
considered to be an economic activity
because it is undertaken with the objective
of earning money or livelihood and not
because of love, affection, sympathy or any
Answers 3
other sentimental reason.
(b) 
Uncertainty of return: Uncertainty of
return refers to the lack of knowledge
relating to the amount of profit that the
business is going to earn during a given
period.  [2×2=4]
26. Types of Pollution :
(i) Air Pollution : Air Pollution occurs when air
contains harmful substances such as gases,
fumes, dust and odour in harmful amount
which causes damage to living organisms.
(ii) Water pollution : It may be defined as presence
of chemicals, industrial waste and other
contaminants in such amount that lowers
the water quality, which is harmful to living
organisms or impairs the beneficial use of
water.
(iii) Land pollution : It is caused by dumping of
toxic wastes on land which damages the quality
of land, making it unfit for agriculture or
plantation.
(iv) Noise Pollution : It may be defined as
unpleasant, unwanted and disagreeable
sounds which causes damage or harm to living
organisms. It may be machines, factories,
vehicles etc.  [1×4=4]
OR
Yes, small business units can survive in a competitive
market. Factors which make way for the scope of
small business enterprises are as follows:
(i) Limited resources: Individuals with entrepre-
neurial spirit but with limited economic means
and resources always have an option of starting
a small business.
(ii) Flexibility: Small firms are usually owner-
operated and this allows them to expand
orreduce the scale of operation, try new
products, new ideas without requiring lengthy
approval procedures.
(iii) Personal touch: Small enterprises are more
likely to succeed in areas requiring personal
touch in handling customers.
27. (i) The type of enterprise is Global enterprise/
MNCs.
(ii) The four features of Global enterprises with
lines quoted are:
(a) Line – ‘Its business operation of production,
marketing, etc. in many countries.’
Feature → International operation – An
MNC operates in more than one country.
It has its branch factories, offices in several
counties. It operates through a network of
branches and subsidiaries in host country.
(b) Line – It headquarter is located in USA
which exercises control over its branches
and subsidiaries in various countries.
Feature → Centralised control – The
branches of MNCs spread in different
4 Oswaal CBSE Sample Question Papers, BUSINESS STUDIES, Class-XI
countries are controlled and managed from
the headquarters located in their home
country. All the branches operate within
the broad policy framework of the parent
company. There is no interference in day-
to-day operations.
(c) Line – ‘The company employs trained and
professional managers.’
Feature → Professional Management →
An MNC employs professional experts,
trained, specialised human resources and
keep updating their knowledge and skills
by imparting training from time to time to
handle the advancements in technology.
(d) Line – ‘To face better quality’
Feature → Advanced Technologies →
These enterprises possess technological
superiorities in their methods of production
so that they can conform to international
standards and quality specifications with
their innovative techniques of production
that help them to come out of a place in
global markets. (Any three)  [1+3=4]
Commonly Made Error
Students often don’t quote the lines when it is
specifically mentioned in the question. They
simply write any features mentioned in the
book.
Answering Tip
In case of a case study always mention the
features given in the case. When the lines
are asked, do quote the lines for better
understanding.
28. (a) 
Peddlers and hawkers: These are the oldest
form of retailers. They deal in non-standardised
and low value goods like fruits, vegetables, ice-
creams, toys, fabrics, etc., which they carry on
bicycle, hand cart, cycle rickshaw or on their
head. They are small traders who move from
one place to another to sell their products.
(b) Cheap jacks: They are small retailers who
deal in consumer items. They have shops in
business localities on a temporary basis. They
change their business place from one locality to
another on the basis of potentiality of the area.
 [2×2=4]
29. (a) 
Discretionary responsibility: This
responsibility is completely voluntary in
nature. It means that a business enterprise
Basis Business
(i) Nature of work Providing goods and service-es Rendering of personalised Performing work as per service-
to satisfy human wants. services.
may choose to open a charitable school or
hospital for the poor, grant aid to people
affected by natural calamities, provide
employment opportunities to the physically
challenged and so on.
(b) Ethical responsibility: This includes the
behaviour of the firm that is expected by society
but not codified in law. For example, respecting
the religious sentiments and dignity of people
while advertising for a product.
(c) Legal responsibility: Every business has a
responsibility to operate within the laws of the
land. Since these laws are meant for the good of
the society, a law-abiding enterprise is a socially
responsible enterprise as well.
(d) Economic responsibility: A business enterprise
is basically an economic entity and, therefore,
its primary social responsibility is economic i.e.,
produce goods and services that society wants
and sell them at a profit. There is little discretion
in performing this responsibility.
 [1×4=4]
30. Mail order houses are the retail outlets that sell their
merchandise through mail. There is generally no
direct personal contact between the buyers and the
sellers in this type of trading.
Three features of Mail Order house are:
 Limited Capital Requirement: They do not
require heavy expenditure on building and
other infrastructural facilities. They can be
started with low amount of capital.
 Wide Reach: Under this system the goods can
be sent to all places which have a postal reach.
 Convenience: The goods are delivered at the
doorsteps of the consumers which ensures
convenience for them. This results in great
convenience in buying the products.  [1+3=4]
31. (i) (a) Analytical industry: This industry
includes activities which are involved in
analysing and separating basic materials
into a number of products, for example,
processing crude oil to produce petrol,
diesel, etc.
(b) Synthetic industry: In this industry, two or
more materials are mixed together to create
a new product. For example, producing
soap, biscuits, etc.
(c) 
Processing industry: In this industry, raw
materials are processed to produce finished
goods through a series of manufacturing
operations. For example, sugar from
sugarcane, textile products, etc.  [1×3=3]
(ii) Difference between business, profession and
employment
Profession Employment
es contract or rules of services.
 Answers 5

(ii) Reward In the form of profits earned.
(iii) Risk Is subject to maximum risk.
 [1×3=3]
(i) (a) 
Primary industry: A type of industry
that includes all those activities which
are concerned with the extraction
and production of natural resources,
reproduction and development of living
organisms, plants etc.
(b) 
Secondary industry: A type of industry
that is concerned with using the materials
In the terms of professional Employees earn wages or salaries.
fee.
Fee is generally regular and No or little risk as wages or
certain, hence limited risk. salaries are fixed.
OR
which have already been extracted at the
primary stage to produce goods for final
consumption.
(c) 
Tertiary industry: A type of industry that is
concerned with providing support services
to primary and secondary industries as well
as activities assisting trade e.g., transport,
communication, etc.  [1×3=3]

(ii) Basis Industry Commerce Trade

Meaning It means production of It means distribution It means sale, transfer

goods & services of goods and services or exchange goods and
produced by industry
Utility creation It creates form utility by
changing the form of
materials into finished
goods.
Capital It requires huge fixed and It requires limited fixed It requires comparatively
working capital
 [1×3=3]
32. According to L.H. Haney, “Partnership is the relation
between persons competent to make contracts
who have agreed to carry on a lawful business in
common with a view to private gain”.
Partnership is considered by some to be a relatively
unpopular form of business ownership, because the
partners of a firm have unlimited liability. Personal
assets may be used for repaying debts in case the
business assets are insufficient.
Merits:
(i) Ease of formation and closure: A partnership
firm can be formed easily by putting an
agreement between the partners. There is no
compulsion with respect to registration of the
firm. Closure of the firm too is an easy task.
(ii) Balanced decision making: The partners
can oversee different functions according to
their areas of expertise. Because an individual
is not forced to handle different activities,
consequently decisions are likely to be more
balanced.
(iii) More funds: In a partnership, the capital is
contributed by a number of partners, so large
amount of funds is available as compared to
sole proprietorship.  (Any two)
Limitations -:
(i) Unlimited liability: Partners are liable to repay
debts even from their personal resources in case
services.
It creates time and place It creates possession utility
utility by transporting through the process of
and warehousing the raw exchange.
material and finished goods.
capital but huge working more of working capital
capital. and less fixed capital.
the business assets are not sufficient to meet the
debts, so there is unlimited liability.
(ii) Limited resources: There is a restriction on the
number of partners, and hence contribution in
terms of capital investment is limited.
(iii) Possibility of conflicts: Partnership is run by
a group of persons wherein decision-making
authority is shared. Difference of opinion on
some issues may lead to disputes between
partners.  (Any two) [2+2+2=6]
OR
(a) 
Consumers’ co-operative societies:
These societies are formed to protect the
interests of the consumers. Basically, its
members are the customers who want to
get better quality products at reasonable
prices. The main aim of the society is to
achieve economy of sales by eliminating
middlemen. Goods are purchased in large
quantities directly from the wholesalers
and are sold to the members.
(b) 
Producers’ co-operative societies: These
societies are formed to protect the interests
of small producers. Such a society consists of
the small producers who find it difficult to
obtain inputs like raw material, equipment,
etc. to sell their output. These societies are
formed to achieve two objectives -
6 Oswaal CBSE Sample Question Papers, BUSINESS STUDIES, Class-XI
(i) To supply inputs to the members and also
to purchase their output for sale.
(ii) 
To protect small producers from big
capitalists in order to increase the
bargaining power of the small firm
(c) Farmers’ co-operative societies: These
societies are formed to protect the interests
of the farmers. The members are those
farmers who want to carry on farming
activities jointly. The basic purpose of
forming these societies is to obtain benefits
of large-scale farming thereby increasing
the productivity. These societies provide
better quality seeds, fertilisers, manures and
other equipment for use in the cultivation
of crops. These societies help the farmers in
solving the problems of doing farming on
fragmented holdings.  [2×3=6]
33. (i) (a) A government company obtains its funds
from government shareholding.
(b) Merit:It has a separate legal entity.
 Demerit: The management and the
administration rests in the hands of the
government.
(ii) (a) It is a departmental undertaking. These are
established as departments of ministries.
(b) Merit: Revenue earned by the enterprise
goes directly to the government treasury
which serves as a source of revenue for the
government.
Limitation: The employees or heads of the
departments of such undertakings are not
allowed to take independent decisions,
without the approval of the ministry
concerned
34. (i) Social objectives:
(a)Supply of desired quality of products
(b)Avoidance of unfair trade practices
(c)Employment generation
(d)Social service or community service.
[ 12 ×4=2]
Personal or individual objectives:
(a) Providing good working conditions,
(b) Payment of competitive and satisfactory
wages and salaries
(c) To provide various financial and non-
financial incentives in order to motivate the
workers
(d) To provide opportunities for personal
growth and development of employees.
[ 12 ×4=2]
(ii) Profit is required in the business for:
(a) Expansion and growth: When profit is
large, a part of it can always be reinvested
for expansion or diversification of
production and other operations.
(b) An index of performance: Profits indicate
whether a business is being managed
efficiently or not. Higher profits indicate the
efficiency of management and lower profits
indicate inefficiency of management. The
success of a business can be judged by its
ability to earn profit. [4+2=6]
nnn