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CBSE Sample Papers for Class 11 Business Set 3 with Solutions

Students must start practicing the questions from CBSE Sample Papers for Class 11 Business with Solutions Set 3 are designed as per the revised syllabus.

CBSE Sample Papers for Class 11 Business Set 3 with Solutions

Time : 3 Hours
Maximum Marks : 80

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

Question 1.
Rashi has a small farm where she grows vegetables. She wants to expand her business and for that she plans to
acquire the neighbouring land. She also plans to purchase a tractor and other machinery for farming. She will need money to purchase the land and the equipment. Which source of finance is required by Rashi to fulfil the demand? [1](A) Short-term
(B) Medium-term
(C) Long-term
(D) Both (A) and (B)
Answer:
Option (C) is correct.
Explanation: Rashi will need huge funds which she will be able to payback once she starts reaping benefits out of the land. This will take a long time, hence, long-term source of finance is required by her.

Question 2.
In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee? [1](A) Licensing
(B) Contract manufacturing
(C) Joint venture
(D) Public Private partnership
Answer:
Option (A) is correct
Explanation: Licensing is a mode of entry where a domestic manufacturer (licensor) grants permission to a foreign manufacturer (licensee) to use its intellectual property, such as patents, trademarks, copyrights, or trade secrets, in exchange for a fee or. royalty. The licensee can then produce and sell products using the licensed intellectual property in the foreign market. This allows the domestic manufacturer .to expand its market reach without directly investing in foreign operations, while the foreign manufacturer benefits from using established intellectual property to produce and sell goods or services.

Question 3.
Identify the principle of insurance where it is the right of the insurer to stand in the place of the insured after
settlement of a claim as far as the right of insured in respect of recovery from an alternative source is involved. [1](A) Utmost good faith
(B) Indemnity
(C) Insurable interest
(D) Subrogation
Answer:
Option (D) is correct.
Explanation: Subrogation is a principle of insurance where, after the settlement of a claim, the insurer has the right to step into the shoes of the insured and take legal action or seek recovery from a third party who may be responsible for the loss or damage. In other words, the insurer is entitled to recover the amount it has paid to the insured from any alternative source or liable party.

This principle ensures that the insured is not compensated twice for the same loss and that the insurer can pursue recovery from other parties who may be at fault or responsible for the loss. Subrogation helps to maintain the principle of indemnity, which is the main purpose of insurance to restore the insured to the same financial position they were in before the loss occurred.

Question 4.
When a partnership is formed for the accomplishment of a particular project or an activity to be carried on for a specified time period, then it is known as: [1](A) General Partnership
(B) Particular partnership
(C) Partnership at will
(D) Limited Partnership
Answer:
Option (B) is correct
Explanation: A partnership formed for a single transaction or enterprise as distinguished from one organized for carrying on a general business. It dissolves automatically when the purpose for which it was formed is fulfilled or when the time duration expires.

Question 5.
Among which of the following entities is a new and separate business entity formed in accordance with the agreement between the parties: [1](A) Contractual Joint Venture (CJV)
(B) Public Private Partnership (PPP)
(C) Equity-based Joint Venture (EJV)
(D) None of these
Answer:
Option (C) is correct.
Explanation: An equity joint venture agreement is one in which a separate business entity, jointly owned by two or more parties, is formed in accordance with the agreement of the parties. The key operative factor in such case is joint ownership
by two or more parties. The form of business entity may vary – company, partnership firm, trusts, limited liability partnership firms, venture capital funds, etc.

Question 6.

Which out of the following is a feature of the public sector enterprise depicted by the picture above? [1](A) They are self-financed enterprises.
(B) They have a separate entity.
(C) Their revenues are used to finance their expenditure.
(D) The staffs are civil servants and recruited and compensated as per the rules of civil servants.
Answer:
Option (D) is correct.
Explanation: The Indian Railways is a part of departmental undertaking and they are financed from the annual budget of government. They are part of the government only and they have no separate entity. Their revenues are deposited in the government treasury. The staff of Railways are civil servants and they are recruited and compensated as per the rules of civil servants.

Question 7.
SFURTI was launched by the Central Government in which year? [1](A) 2012
(B) 2013
(C) 2014
(D) 2015
Answer:
Option (C) is correct.
Explanation: SFURTI is an initiative started by the Indian government’s Ministry of MSME to promote clusters of rural-based industries in different parts of the country.

Question 8.
Manish is a student pursuing final year B.Tech. from IIT Kharagpur. His father Mr. Sambal Singh who owned a
small general store in Jaipur had a heart attack and became completely paralysed. There was no other source of (income for the family, so, Manish left his studies and decided to take charge of his father’s general store. While checking the books of accounts, he found that his father had taken a loan of ₹2 lakhs from Bank of Baroda to be repaid this year only, but the business is running into losses due to his father’s illness. Hence, his mother advised him to close the business and to look for a job outside. [1]The form of business organisation formed by Sambal Singh is:
(A) Joint Stock Company
(B) Partnership
(C) Sole Proprietorship
(D) Co-operative Society
Answer:
Option (C) is correct
Explanation: A sole proprietorship is an unincorporated business that is owned by one individual with no legal distinction between the business and owner. In this form of business, the owner and the business are taken as one and the same person.

Question 9.
Global enterprises have certain disadvantages. Which of the following is incorrect in the light of this statement?
(A) Gives rise to the growth of monopolies. [1](B) Always concentrate on selling items desirable for developing countries.
(C) Leads to concentration of power in few hands.
(D) Concentrates more on selling consumer goods and luxury items.
Answer:
Option (B) is correct
Explanation: It states that global enterprises always concentrate on selling items desirable for developing countries. However, global enterprises may not necessarily always focus on selling items specifically targeted for developing countries. Their product offerings and market strategies can vary depending on the specific market conditions, consumer demands, and business objectives.

Question 10.
Read the following statements: Assertion (A) and Reason(R). Choose the correct alternative from those given below: [1]Assertion (A): The process of taking funds from commercial banks is complex.
Reason(R): The banks make detailed investigation of the company’s affairs, credit rating and financial affairs. The interest charged by the banks depends on numerous factors like the nature of loan, time period etc.
Alternatives:
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true but Reason (R) is False
(D) Assertion (A) is False but Reason (R) is True
Answer:
Option (A) is correct
Explanation: It states that the process of taking funds from commercial banks is complex. This is true because borrowing funds from commercial banks involves various procedures, documentation, and evaluation processes. Banks conduct detailed investigations of the company’s affairs, credit rating, and financial situation before granting loans. This investigation helps banks assess the creditworthiness and risk associated with lending to the company. The interest charged by banks also depends on several factors like the nature of the loan and the time period.

Question 11.
Permitting another party in a foreign country to produce and sell goods under the owner’s trademarks, patents or copyrights in lieu of some fee is known as ………………….. . [1](A) Licensing
(B) Foreign Investment
(C) Export
(D) None of the above
Answer:
Option (A) is correct.
Explanation: Licensing is a contractual arrangement in which one firm grants access to its patents, trade secrets or technology to another firm in a foreign country for a fee.

Question 12.
Apollo pharmacy has retail outlets which function 24 hours a day. The stores are spread across the country and
have centralised purchasing. The sales are decentralised across the difference states and stores. Which type of business outlet is highlighted above? [1](A) Chain Store
(B) Departmental store
(C) Both (A) and (B)
(D) None of the above
Answer:
Option (A) is correct
Explanation: Chain stores or multiple shops are networks of retail shops, which are owned by the single business enterprise. Under this type of arrangement, a number of shops with similar appearance are established in localities, spread over different parts of the country.

Question 13.
Statement I: Wholesalers purchase in bulk quantity and sell in small lots to the retailers.
Statement II: The wholesalers perform several marketing functions. They provide considerable support to the consumers.
Choose the correct option from the following: [1](A) Statement I is true and II is false
(B) Statement II is true and I is false
(C) Both the statements are true
(D) Both the statements are false
Answer:
Option (A) is correct
Explanation: The wholesalers do not provide support to the consumers rather they provide support to the retailers and the manufacturers.

Question 14.
Aarav Ltd. wants to expand their company. They need new land and machinery for the same. As the financial director of the company, which source you will recommend them? [1](A) Debentures
(B) Inter-corporate deposits
(C) Loans from commercial banks
(D) Equity shares
Answer:
Option (D) is correct
Explanation: The expansion project takes a lot of time and the revenue generation takes time. The funds have to be taken from a long-term source of finance which do not require fixed interest payment. Equity is the best option.

Question 15.
GST has been implemented in India with the idea of ‘One Nation and One Tax’. When was it implemented? [1](A) Jan 1,2016
(B) Jan 1,2017
(C) July 1,2016
(D) July 1,2017
Answer:
Option (D) is correct

Question 16.
Statement I: Small industries are more labour intensive and less capital intensive.
Statement II: MSMEs are the second largest employer of human resources after agriculture.
Choose the correct option from the following: [1](A) Statement I is true and II is false
(B) Statement II is true and I is false
(C) Both the statements are true
(D) Both the statements are false
Answer:
Option (C) is correct

Question 17.
Faulad Steel Ltd. is a multi-product company, manufacturing steel pipes in wide range for wide spectrum of application. Recently the company received a big order from an MNC for which it requires additional funds. The finance manager reported that the company is not in a position to bear extra burden of explicit cost and equity sharehplders insisted not to issue more shares as it can affect their control consideration. Now, the company has only one option, i.e., ploughing back of profit.
In the above case, which of the following sources of finance is most suitable?
(A) Shares
(B) Debentures
(C) Retained earnings
(D) Bank loans
Answer:
Option (C) is correct
Explanation: A company generally does not distribute all its earnings amongst the shareholders as dividends. A portion of the net earnings may be retained in the business for use in the future. This is known as retained earnings. It is a source of internal financing or self-financing or ‘ploughing back of profits.

Question 18.
Match the items given in column I with their meaning given in column II.

Column I Column II
1. e-trading (i) It includes publication of online catalogue of goods, advertisements.
2. e-delivery (ii) It involves securities trading, i.e., online buying and selling of shares and other financial instruments.
3. e-bidding (iii) It includes electronic delivery of computer software, photographs, and videos to the user’s computer.
4. e-communication (iv) It includes e-tendering whereby one may submit tender quotations online.

(A) 1. (ii), 2. (iii), 3. (iv), 4. (i)
(B) 1. (iii), 2. (i), 3. (iv), 4. (ii)
(D) 1. (ii), 2. (i), 3. (iv), 4. (iii)
(C) 1. (iv), 2. (iii), 3. (ii), 4. (i)
Answer:
Option (A) is correct

Column I Column II
1. e-trading (ii) It involves securities trading, i.e., online buying and selling of shares and other financial instruments.
2. e-delivery (iii) It includes electronic delivery of computer software, photographs, and videos to the user’s computer.
3. e-bidding (iv) It includes e-tendering whereby one may submit tender quotations online.
4. e-communication (i) It includes publication of online catalogue of goods, advertisements.

Question 19.
Which of the following statements is false? [1](A) Verticals Third Party Service Provider specialize in a number of processes including both non- core and core activities
(B) Horizontals Third Party Service Provider specialize in a number of processes including both non-core and core activities
(C) Horizontals Third Party Service Provider specialize in only one or two processes
(D) All the statements are true
Answer:
Option (C) is correct
Explanation: Horizontal third party service Provider specialise not in only one or two processes but includes a number of processes including both core and non-core activities.

Question 20.
Organizations that raise funds through public deposits offer ………………. rates of interest than bank deposits. [1](A) Lower
(B) Higher
(C) Nil
(D) None of the above
Answer:
Option (B) is correct.
Explanation: Organizations that raise funds through public deposits typically offer higher rates of interest compared to bank deposits. This is because these organizations, which may include non-banking financial companies (NBFCs) or other financial institutions, often target individuals or investors seeking higher returns on their investments. To attract deposits from the public, they offer relatively higher interest rates as an incentive. This allows them to gather the necessary funds for their operations or lending activities while providing individuals with the opportunity to earn a higher rate of interest on their deposits.

Question 21.
‘Non availability of finance to buy input and plant and machinery deprives many new entrepreneurs from availing opportunities. [3]Identify the government Institution established to cater to this need of entrepreneurs. And also mention any two functions of this institution.
Answer:
1. This Institution is NSIC.
There are two functions of NSIC are as follows:
(a) It supplies imported machines and raw material to SSI on hire purchase scheme.
(b) Provides help in upgradation of technology.
(c) It exports the product of small units.

Question 22.
State any three limitations of a government company. [3]OR
Which institution issues bonds? How are they different from debentures? [3]Answer:

  1. Since the Government is the only shareholder in some of the Companies, the provisions of the Companies Act does not have much relevance.
  2. It evades constitutional responsibility, which a company financed by the government should have.
  3. It is not answerable directly to the Parliament.
  4. The government being the sole shareholder, the management and administration rests in the hands of the government.
  5. The main purpose of a government company, registered like other companies, is defeated. (Any three)

OR

Bonds are issued as long-term financial instruments by the Central Government, State Government or any specialised financial institution.

Differences between debentures and bonds:

  1. 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.
  2. A debenture may be redeemed in instalments while a bond is redeemed in lump sum.

Question 23.
Mr. Anand recently got retired from his 60 years of service from Indian Oil, he received a good amount of money from pension and other savings.
He is thinking to invest his savings in the financial security which provides higher returns and high liquidity control over business affairs. [3](i) Which will be the most suitable security for him?
(ii) State three reasons stating why this security will be the best option?
Answer:
(i) Equity Shares

(ii) It is the best option because :

  1. Equity shareholders do not get fixed rate of dividend as in the case of preference shares but they enjoy higher dividends during large profits to the companies. Higher dividends appreciate the market value of equity shares in the market, maximising the shareholders wealth.
  2. Marketability of equity share on the stock exchanges make them lucrative source of investment.
  3. Equity shares provide the voting rights to the shareholders through which they can exercise control over management. [Any two]

Question 24.
Write a note on NABARD. [3]OR
Why is mobility of factors of production generally less among the countries than within the country? [3]Answer:
NABARD was set up in 1982 as an apex body to coordinate the activities of all institutions involved in rural credit.
The main functions of NABARD are

  1. To grant long-term loans to the State Government for subscribing to the share capital of cooperative societies.
  2. To take the responsibility of inspecting cooperative banks, Regional Rural Banks (RRBs) and primary cooperative societies.

OR

  1. Because of legal restrictions on their movement across the nations.
  2. Variations in socio-cultural environment of different nations restricts the mobility of labour as it if found difficult to adjust in other country’s sociocultural conditions.
  3. Geographic influences and economic conditions also come in a big way in the movement of factors of production across countries.

Question 25.
Briefly explain the following types of partners : [4](i) Dormant Partner
(ii) Active Partner
OR
Explain briefly the following agreements of WTO : [4](i) Agreement on agriculture (AOA)
(ii) Agreement on TRIPS
Answer:
(i) Dormant Partner: A partner who does not participate in the active business of a company or partnership, but is entitled to a share of the profits, and subject to a share in losses. This partner is also called sleeping partner or silent partner.

(ii) Active Partner: A partner who contributes capital and also actively participates in the management and affairs of the business is called an active partner. He shares the profits and losses of the business and his liability is unlimited.
OR
(i) Agreement on Agriculture (AOA): This agreement ensures free and fair trade in agriculture. The developed countries have agreed to lower down the custom duties on their imports and reducing subsidies in the export of agricultural goods.

(ii) Agreement on TRIPS: The agreement sets out the minimum standard of protection to be adopted by the parties in respect of seven intellectual properties viz, copy rights, trademarks, geographical indication, industrial design, laying out of integrated circuits and trade secrets.

Question 26.
What do you understand by financial institutions ? Write their merits. [4]OR
Main objective of Public-Private Partnership (PPP) is to combine the skills, expertise and experience of both the public and private sector.” What is a PPP? In the light of this statement, specify its 3 main advantages. [4]Answer:
Financial institutions have been established all over the country to provide financial assistance to business organisations. These institutions have been established by the central as well as state governments to fulfil the medium as well as long term requirements of the business. Besides providing financial assistance, these institutions also conduct market surveys and provide technical assistance and managerial services to their clients.

Merits:

  1. They provide long-term finance, not provided by commercial banks.
  2. They provide funds during periods of depression when other sources are not available.

OR
Public-Private Partnership refers to the involvement of private sector in the Government projects aimed at public benefit in the form of management expertise and monetary contribution.

Advantages offered by PPP are:

  1. The PPP approach enables the Government to overcome its budgetary and financial constraints.
  2. Leads to faster implementation of infrastructural projects with high degree of efficiency.
  3. Benefits of combined expertise of private and public sector. Public-Private Partnership’s (PPP). (Any two)

Question 27.
Indian Oil Corporation has taken initiative in providing clean drinking water, running child and maternity health centres, construction of school buildings, libraries and providing financial help to deserving students from poor and needy family through scholarship.
(i) Why do you think IOC needs to take such initiatives?
(ii) Identify two values upheld by IOC by discharging such activities. [4]Answer:
(i) Indian Oil Corporation has taken initiative in providing clean drinking water, running child and maternity health centres, construction of school buildings, libraries and providing financial help to deserving students from poor and needy family through scholarship as it is fulfilling its social responsibilities like:
(a) To play a fair role in civic affairs.
(b) To provide and promote general amenities and help in creating better living conditions in general.
(c) To preserve and promote social and culture values.
(d) To undertake socially desirable projects relevant for the community as a whole.
(e) To take steps for developing backward areas. (Any two)

(ii) Two values upheld by IOC by discharging such activities –
(a) Maintenance of society.
(b) Holding business responsible for social problems.

Question 28.
Briefly explain the following: [4](a) Trade credit
(b) Inter-corporate deposit
Answer:
(a) Trade Credit: It is the credit facility allowed by a business organisation to its customers of reasonable financial standing on account of purchases of supplies made by the customers without immediate payment.

(b) Inter Corporate Deposit (ICD): Inter Corporate Deposits are unsecured short-term deposits made by a company with another company. ICD market is used for short-term cash management of a large corporate. As per the RBI guidelines, the minimum period of ICDs is 7 days which can be extended to one year.

Question 29.
Name the services which are related to the following cases: [4](i) The services which help in removing hindrance of knowledge.
(ii) The services which help in removing hindrance of place.
(iii) The services which help in removing hindrance of time.
(iv) The services which help in removing hindrance of risk.
Answer:
The services which are related to the following cases:
(i) Advertisement Segment
(ii) Transport Segment
(iii) Warehousing Segment
(iv) Insurance Segment

Question 30.
“Earning of profit cannot be the objective of business any more than eating is the objective of living. A person cannot survive for a long-time and cannot lead a healthy life only by eating. A person has to perform other activities also such as social activities, religious, patriotic activities. Similarly, a business with the sole objective of earning profit cannot survive for a long-time to capture a big share in market to create the goodwill, to have durable profits; businessman must have social and individual objectives of business.”
(i) In the context of above discussion, state any four social and individual objectives of business.
(ii) State any two reasons other than mentioned in the paragraph why profit is a requirement of business. [4]Answer:
(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.

Personal or individual objectives:
(a) Providing good working conditions.
(b) Payment of competitive, 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.

(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.

Question 31.
(i) Briefly explain the following: [3 + 3 = 6](a) Mate’s Receipt (b) Shipping Bill
(ii) State any three differences between international trade and international business. [6]OR
(i) Explain the following:
(a) Commercial Invoice (c) Certificate of Origin
(ii) State any two points of difference between Bill of Lading and Bill of Entry.
Answer:
(i) (a) Mate’s Receipt: This receipt is given by the commanding officer of the ship to the exporter after the cargo is loaded on the ship. The mate’s receipt indicates the name of the vessel, berth, date of shipment, description of packages, marks and numbers, condition of the cargo at the time of receipt on board the ship, etc. The shipping company does not issue the bill of lading unless it receives the mate’s receipt.

(b) Shipping Bill: The shipping bill is the ‘ main document on the basis of which the 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

(ii) The difference is:

International Trade International Business
International trade refers to the exchange of goods and services across the interna¬tional boundaries of countries. International business not only includes movement of capital, of goods and services, but also of capital, personnel, technology and intellectual property like patents, trademarks, know-how and copyrights.
International trade means movements of goods only. Business transaction that takes place between two or more countries is known as international business.
International trade is a narrow term. International business is much broader than international trade.

OR
(i) (a) Commercial invoice: This document contains the details of goods supplied by the exporter. The common contents of this document are name of buyers and sellers, quantity and price of product, date of sailing, marks made on packing, etc. This document is necessary for taking clearance from the Excise Commissioner, Custom Authority, Export Inspection Agency, etc.
(b) Airway bill: This document is the same as bill of Jading with the only difference that it is issued by the airway company and not by the shipping company when goods are transported through airways, then instead of Bill of Lading the exporter gets Airway Bill.
(c) Certificate of origin: This certificate is issued by the Chamber of Commerce or by Export Promotion Council or by a government department. This document certifies that the goods to be exported are originally from the home country only or exporter’s country only.

(ii) Difference between Bill of Lading and Bill of Entry

Basis of Difference Bill of Lading Bill of Entry
1. Meaning Bill of lading is a receipt of shipment of goods. It is an application form supplied by the customs office to the importer.
2. Relationship It is related to export transaction. It is related to import transaction.

Question 32.
Identify the form of a business in which members have agreed to share the profits of business carried on by all or any of them acting for all and explain any four features of this form of organisation.
OR
Explain the following benefits of a partnership firm:
(a) Ease of formation
(b) Balanced decision making
(c) More funds for operations
Answer:
The form of business organisation is partnership.
Partnership means association of two or more persons who can pool in required resources like capital, knowledge, expertise, skill, etc. in such a way, that together they can form a cohesive team leading their business towards achievement of their common goals successfully.

Following are the features of a partnership firms-

  1. Formation: The partnership form of organisation is governed by the Indian Partnership Act 1932. It comes into existence through a legal agreement stating the terms and conditions of forming partnership.
  2. Liability: The partners of a firm have unlimited liability. They are jointly and individually liable for repayment of debts; personal assets may be used for repaying debts in case the business assets are insufficient.
  3. Risk bearing: The partners bear the risks of losses in the agreed ratio as a team. However, they also share profit as a reward for bearing risk as per the agreement.
  4. Decision-Making and control: The partners share amongst themselves the responsibility of decision making and control of day-to-day activities through their joint efforts.

OR
(a) 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.

(b) 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, cohsequently decisions are likely to be more balanced.

(c) More funds: In a partnership, the capital is contributed by a number of partners, so large amount of funds are available as compared to sole proprietorship.

Question 33.
(i) If reasonable care is not taken by the insured to minimize the loss or damage to the insured property then the claim from the insurance company may be lost. [3 + 3 = 6](a) Identify the principle discussed and explain it.
(b) Explain two more principles of insurance.
(ii) This facility ensures the sender of the mail that in case the mail is not delivered to the addresses, it comes back to the sender.
(a) Name and explain such kind of facility provided by Post office.
(b) Explain any two more facilities provided by Post Office.
Answer:
(i) (a) Mitigation: It is the duty of the insured to take reasonable steps to minimise the loss or dam-age to the insured property.
(b) (i) Subrogation: The right of the insurer – to stand in the place of the insured, after settlement of a claim.
(ii) Cause Proxima: Provide compensation only for such losses as are caused by the perils which are stated in the policy.

(ii) (a) Registered Post: It 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
(b) (i) Speed Post: The service offers ‘one rate’ delivery pricing in all the places of India, with faster and secure delivery (normally 2 – 3 days, within India). It also provides an excellent delivery network across the different parts of the world (including the remote areas).

(ii) Parcel: Package delivery or parcel delivery is the delivery of shipping containers, parcels, or high value mail as single shipments. The service is provided by most postal systems, express mail, private courier companies, and less than truckload shipping carriers.

Question 34.
Jaya, Rohit and Raman are three friends who have completed a vocational course in entrepreneurship after their school education. Finding the job market tough, they were contemplating the idea of setting up a small business using ‘the skills they had learnt in their course. They came across a notification given by the District Industries Centre located near the Industrial Estate in VKIA Jaipur, Rajasthan regarding a seminar on Government assistance for a small business. They attended the seminar and got useful information about Government assistance to SSIs. Jaya decided to open a micro enterprise as a fruit processing in her village. Rohit planned to start business of providing courier services in Jaipur city. Raman planned to start a small shoe manufacturing factory in backward area of Odisha.
(i) What tire limit of investment in plant and machinery for Jaya’s small business and in case of service enterprises according to MSMED Act.
(ii) Why promotion of Small-Scale Industries is considered as a powerful instrument for development?
Answer:
(A) Jaya is running micro enterprise of manufacturing nature in which the investment limit in plant and machinery can’t exceed ₹1 crore.
Service Enterprise has following investment limit if it is:
(a) Micro enterprise: Doesn’t exceed ₹1 crore.
(b) Small enterprise: Not more than ₹10 crore
(c) Medium enterprise: Not more than ₹50 crore

(B) SSIs are promoted by the Government as a powerful instrument for rural development as SSIs.
(a) Generate employment for rural artisans and seasonal employment for agricultural labour.
(b) Prevent migration of rural population to urban areas.
(c) Accelerate rural industrialisation.
(d) Contribute to socio-economic development of rural areas. (Any three)


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