CENTRAL BOARD OF SECONDARY EDUCATION (CBSE)

XII MODEL EXAM QUESTION PAPER

SESSION :- 2023-24
BUSINESS STUDIES (054)

Maximum Marks :- 80 SET – 5 Time Allowed :- 3 Hrs

GENERAL INSTRUCTIONS : -
Read the following instructions very carefully and strictly follow them :
(i)This question paper contains 34 questions. All questions are compulsory.
(ii) Marks are indicated against each question.
(iii) Answers should be brief and to the point.
(iv) Answers to questions carrying 3 marks may be from 50 to 75 words.
(v) Answers to questions carrying 4 marks may be in about 150 words.
(vi) Answers to questions carrying 6 marks may be in about 200 words.
(vii) Attempt all parts of a question together.

Questions 1 to 20 are Multiple Choice Questions (MCQs), carrying 1 mark each.

(20*1=20)

Q-1) Stele Plastic Makers has decided to include a team of dynamic managers in the company. For
this, they want to judge the pattern of interests of the potential managers. After giving this test
they want to further know how much the candidate is useful for organisation. They decide to
take another test which can measure the existing skills of the candidates. Rakesh, an exceptional
candidate, is given certain document which contains information like job title, pay, allowances,
responsibilities, etc. After the employees join they are given a very good training. The company
does not want to stop at ‘training’ which is a job related process. They want to bring a concept
which is a career related process. Identify the document which is given to Rakesh in the above
case.

(A) Contract of employment

(B) Letter of relieving
(C) Experience letter
(D) Job description

Q-2) Mohan runs a security service providers agency. Considering that psychological testing is a
critical step for judging the potential of the prospective candidates for a career in law
enforcement, he uses various types of psychological tests as part of the selection processes. This is
done to ensure that potential new officers are emotionally and psychologically suited to carry out
the requirements of the job. Identify the type of test that Mohan may use to assess the potential of
the prospective candidates.

(A) Aptitude test

(B) Interest test

(C) Personality test

(D) Intelligence test

Q-3) Feather Loom Ltd. has been doing a great job in the area of clothes designing. Within two
years, the company has reached among the top most performers of the textile industry. The
company has made a lot of profit and decided to distribute its profits to the shareholders who
stood with it during the hard times. Identify and explain the type of decisions mentioned in the
above case.

(A) Investment decision

(B) Budgeting decision

(C) Dividend decision

(D) Financing decision

Q-4) For the following two statements, choose the correct option:

Statement I: Consumer organisations play an important role in educating consumers about their
rights and providing protection to them.

Statement II: A consumer should not ask for a cash memo on purchase of goods or services.

Choose the correct option from options given below:

(A) Statement I is correct and statement II is wrong.

(B) Statement II is correct and statement I is wrong.
(C) Both the statements are correct.
(D) Both the statements are wrong.

Q-5) On the advice of Mudra Advertising Ltd., ‘Rambha Automobiles’ has worked upon managing
public opinion by developing better relations with the masses through sponsoring cultural and
sporting events, maintenance of public parks, etc. Name the department in the organisation
which is generally responsible for performing the above important task of managing public
opinion.
(A) Marketing department

(B) A separate department created in the firm for the purpose

(C) An outside agency

(D) Any of the above

Q-6) ‘Shrishthi Enterprises’ has developed a strong distribution network in India and abroad by
setting up retail outlets and reaching out to the customer through internet selling. Identify the
decision related to the element of marketing mix being discussed above.

(A) Storing and assorting products in order to create time utility

(B) Regarding the channels or using intermediaries
(C) Both (A) and (B)
(D) One regarding branding, packaging and labelling

Q-7) ‘Yamuna Ki Bhujia’ offered its products at competitive prices even while offering customer
services like gift packaging and free home delivery to become a household name.

Identify the factor affecting the element of marketing mix being discussed above.

(A) Marketing methods used

(B) Objectives
(C) Extent of competition in the market
(D) Product cost

Q-8) Name the process of working with and through others to effectively achieve organisational
objectives by efficiently using limited resources in a changing environment.

(A) Management
(B) Planning
(C) Organising
(D) Controlling

Q-9) “The increase in the demand for many Ayurvedic medicines, health products and services in
the past few months, is related to the need for building immunity and an increased awareness for
health care due to the spread of CoronaVirus.” Identify the feature of business environment being
described above.

(A) Specific and general forces. (C) Interrelatedness

(B) Relativity (D) None of the above
Q-10) Name the function of management which helps in the formulation of future plans, in the
light of the problems that were identified and thus, helps in better planning in the future period.

(A) Planning (C) Organising

(B) Directing . (D) Controlling

Q-11) ‘Even where members of a department willingly cooperate and work, a manager has to
coordinate the efforts of different people in a conscious manner.’ Identify the characteristic of
coordination discussed above.

(A) Coordination ensures unity of action.

(B) Coordination is a deliberate function.
(C) Coordination is a continuous process.
(D) Coordination is an all-pervasive function.

Q-12) “What distinguishes a successful manager from a less successful one is the ability to put the
principles into practice.” Which aspect of the nature of management is highlighted in the above
statement?

(A) Management as a science

(B) Management as an art
(C) Management as a profession
(D) Management is an intangible force

Q-13) Identify the dimension of the business environment illustrated by the picture given below
in which wages are falling out whereas profits are increasing.
(A) Social environment
(B) Technological environment
(C) Political environment
(D) Economic environment

Q-14) ____________ is the process by which the manager brings order out of chaos, removes
conflict among people over allotted work or responsibility-sharing and creates an environment
suitable for teamwork.

(A) Planning (B) Organising

(C) Staffing (D) Controlling

Q-15) Match the concept of marketing in Column I with their respective definition in column II :-

Column I Column II

A. Product concept (i) relates to maintaining high quality of the product

B. Selling concept (ii) relates to satisfying customer needs

C. Marketing concept (iii) relates to aggressively persuading the buyer to purchase

the product

(A) (i), (ii), (iii) (C) (ii), (i), (iii)

(B) (iii), (ii), (i) (D) (i), (iii), (ii)

Q-16) ____________ ensures that the heads of separate business units in the organisation are
responsible for profit or loss of their unit and have authority over it.

(A) Span of management (C) Divisional structure

(B) Functional structure . (D) Hierarchy of authority

Q-17) ABC Ltd. Has Debt Equity ratio of 3:1 whereas XYZ Ltd. Has Debt Equity ratio of 1:1. Name
the advantage ABC Ltd. Will have over XYZ Ltd., when the rate of interest is lower than the rate
of return on investment of the company.

(A) Trading on equity

(B) Low risk
(C) Low cost of equity
(D) Greater flexibility
Q-18) ………………. Is used extensively for all types of organisations and mainly for taking charge
of different activities in any enterprise.

(A) Planning
(B) Management
(C) Coordination
(D) Staffing

Q-19) For optimal procurement of funds, a finance manager identifies different available sources
and compares those items in terms of cost and associated risks. Identify concept highlighted in
the above lines.

(A) Financial management

(B) Financial Decisions
(C) Working Capital
(D) None of these

Q-20) Which of the following statement is false for financial market?

(A) Financial markets facilitate difficulty in the purchase and sale of financial assets
(B) Financial markets provide valuable information about securities being traded in the market
(C) They provide liquidity to financial assets
(D) None of these

Q-21) Mukta had been working as an assistant manager with Jelly & Jelly Enterprises for the last 15
years. She was very popular amongst her colleagues because of her commitment and dedication towards
work. When the manager senior to her retired, all her colleagues thought that now Mukta would be
promoted. But to everyone’s surprise, The vacant post was filled by an outsider, Neelam. Mukta felt
demoralised and her performance started declining. She would absent herself often and could not meet
her targets. Neelam was a good leader who would not only instruct her subordinates but would also
guide and inspire them. She notice Mukta’s behaviour and felt that her performance could be improved.
She started involving Mukta in the decision-making issues related to the organisation and made her a
part of a high-level joint-management committee. Mukta was now punctual in office and her
performance started improving. Identify and explain the function of management being performed by
Neelam.

Q-22) Identify the level of management whose basic task is to integrate diverse elements and coordinate
the activities of different departments according to the overall objectives of the organisation. State any
four functions of the level of management identified.
Q-23) The Return on Investment (ROI) of a company ranges between 10 and 12% for the past three
years. To finance its future fixed capital needs, it has the following options for borrowing debt:

Option ‘A’: Rate of interest 9%

Option ‘B’: Rate of interest 13%

Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reason in support of your answer. Also,
state the concept being used in taking the decision.

OR

Stela Steel Ltd. Is thinking of raising finance to further its projects overseas. For this the company is
observing the other companies’ raising of finance. Their debt and equity ratios are being thoroughly
studied by the financial experts of the company. Identify and explain the factor affecting the choice of
capital structure.

Q-24) “Controlling is an indispensable function of management. Without controlling the best of plans
can go away “. Do you agree? Explain any three reasons in support of your answer.

OR

“It is generally believed that measurement of performance should be done after the task is completed.”
Identify and explain the step in the process of the function of management being discussed above and
the next step followed by the same in the process.

Q-25) Explain any four factors that can affect the working capital requirements of a company.

OR

Explain any four factors that affect the choice of capital structure of a company.

Q-26) ‘In an interview with a leading news channel, Mr. Rakesh Kwatra, CEO of ‘Get My Job’ has
suggested that the companies which want more and more people to apply for jobs in their organisation
should make the process of applying for jobs easier and candidate friendly.’

Name and explain the next two steps which follow the above mentioned step, in the process of the
function of Management being discussed above.

Q-27) Explain the following rights of consumers provided by Consumer Protection Act, 2019:

(i) Right to safety

(ii) Right to consumer education

Q-28) Identify and explain the two sources of recruitment which cannot be used when the existing staff
is either insufficient or does not fulfil the eligibility criteria of the jobs to be filled.

OR

Identify and explain the elements of directing mentioned below:

(i) Astha, a manager, has the ability to influence others to bring about a change in their
behaviour.
(ii) Neeraj, a managing director, declares share in the profits to the manager for their
contribution to increase profits of the company.

Q-29) Pramod is a supervisor at ‘Shyam Breads and Biscuits Factory’. The factory produces 20,000
packets of bread and biscuits every day. As a supervisor, Pramod ensures that work goes on smoothly and
there is no interruption in production. He is a good leader who gives orders only after consulting his
subordinates and working out the policies with the acceptance of the group. Identify and explain the
leadership style being adopted by Pramod.

Q-30) Dheeraj wants to start a business of selling N-95 masks after the outbreak of the global pandemic
of COVID-19. Due to uncertain market conditions he wants to make a low investment in fixed capital.
Suggest how the decisions related to the choice of technique, and financing alternatives, can help
Dheeraj in ensuring a low investment in Fixed capital requirements.

Q-31) Kamal, Khan and David are partners in a firm engaged in the distribution of dairy products in
Madhya Pradesh. Kamal is a holder of Senior Secondary School Certificate from Central Board of
Secondary Education with Business Studies as one of his elective subjects. Khan had done his post-
graduation in Hindi literature and David in Dairy Farming. One day there was a serious discussion
between Khan and David regarding the nature of ‘Management as a Science’. Khan argued that
Management was not a science whereas David was of the opinion that Management was a science.
Kamal intervened and corrected both Khan and David about the nature of Management as a Science
with the help of his knowledge of Business Studies. Explain, how Kamal would have been able to satisfy
both Khan and David.

Q-32) “Planning is worth the huge costs involved?” Do you agree? Explain any five reasons in support of
your answer.

OR
“If the project is important then more alternatives should be generated and thoroughly discussed
amongst the members of the organisation.” Identify and explain the step in the process of planning
being discussed above. Also, explain the remaining steps which will have to be carried out to complete
the process.

Q-33) ‘Advertising’ and ‘Personal selling’ both are communication tools used by the marketers to
promote their products. Yet they differ in their approach. Differentiate between the two by giving any
six points.

OR

“The elements of marketing mix are popularly known as 4 P’s of marketing.” Briefly explain these
elements.

Q-34) An important difference between S&M Ltd. And most other companies is that instead of
operating as one large Corporation, it operates as 180 smaller companies each focused on a specific
product and area, implying selective dispersal of authority, recognising the decision-makers’ need for
autonomy as decision-making authority is pushed down the chain of command. It enables the company
to maintain short lines of communication with customers and employees, and accelerate the
development of talent. Identify the philosophy that is being followed by S&M Ltd. Through which it is
dividing the decision-making responsibilities among the hierarchical levels. State any five points of
importance of the philosophy identified.

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