class 11 business studies chapter wise case study questions

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Class 11 Business Studies Case Study Questions

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CBSE Class 11 Business Studies Case Study Questions are available on myCBSEguide App . You can also download them from our student dashboard .

For students appearing for grade 11 CBSE exams from the Commerce stream, Business Studies is a fundamental subject. Business Studies is considered to be quite interesting as well as an occupying subject as compared to all other core subjects of the CBSE class 11 commerce stream. To ace this CBSE exam, students are not only required to work hard but they ought to learn to do smart work too.

Among all the other core subjects of the Commerce stream i.e accountancy, economics and business studies, Business Studies is the one that is purely theoretical. It is termed to be comparatively easier and more scoring than the other mandatory subjects of the commerce stream. Many students who opt for the commerce stream after their 10-grade exams desire to learn in-depth about the business organizations and their work, for them the subject is of utmost importance. Business Studies is an essential component of the class 11 commerce stream curriculum.

In order to ace the subject the student needs to have conceptual clarity. CBSE has designed the syllabus for class 11 Business Studies so as to provide students with a basic understanding of the various principles prevalent in the Business organizations as well as their interaction with their corresponding environment.   

Case Study Questions in class 11 (Business Studies)

Case-based questions have always been an integral part of the Business Studies question paper for many years in the past. The case studies have always been considered to be challenging for the students, for such questions demand the application of their knowledge of the fundamental business concepts and principles. Last year i.e-  2021 CBSE introduced a few changes in the Business Studies question paper pattern to enhance and develop analytical and reasoning skills among students.

It was decided that the questions would be based on real-life scenarios encountered by the students.CBSE not only changed the way case-based questions were formulated but also incremented their weightage in the Business Studies question paper. The sole purpose of increasing the weightage of case-based questions in the class 11 curriculum by CBSE was to drift from rote learning to competency and situation-based learning.

What is a case study question? (Business Studies)

In Business Studies, a case study is more like a real-world test of how the implementation works. It is majorly a report of an organization’s implementation of anything, such as a practice,a product, a system, or a service. The questions would be based on the NCERT textbook for class 11 Business Studies. Case-based questions will definitely carry a substantial weightage in the class 11 Business Studies question paper. questions.

A hypothetical text will be provided on the basis of which the student is expected to solve the given case-based question asked in the Business Studies class 11 exam. Initially, the newly introduced case-based questions appeared to be confusing for both the students and the teachers. Perhaps, they were reluctant to experiment with something new but now a lot more clarity is there that has made the question paper quite student-friendly.

Case study questions could be based on any chapter or concept present in the NCERT textbook. Thus, it is expected from the students to thoroughly revise and memorize the key business fundamentals. 

Business Studies syllabus of class 11 CBSE   

The entire Business Studies course is divided into 2 parts:

• Part A, Foundation of Business
• Part B, Finance and Trade

The class 11 Business Studies exam is for a total of 100 marks, 80 marks are for the theory and the remaining 20 for the project. Most of the questions are based on the exercises from the NCERT textbook. It is recommended to rigorously go through the contents of the book. A single textbook has been published by NCERT for Class 11 Business studies. There are a total of 10 chapters in this book divided into 2 parts. 

CBSE Class – 11

Business Studies (Code No. 054)

Theory: 80 Marks Time: 3 Hours Project: 20 Marks

Case Study Passage (Business Studies class)

As part of these questions, the students would be provided with a hypothetical situation or text, based on which analytical questions will have to be answered by them. It is a must for the students to read the passage in depth before attempting the questions. In the coming examination cycle (2022-23), case-based questions have a weightage of around 30%. These questions can be based on each chapter in the NCERT book for Business Studies, grade 11.

Students must prepare well for the case-based questions before appearing for their Business Studies exam as these questions demand complete knowledge of the various concepts in their syllabus. CBSE plans to increase the weightage of such questions in the upcoming years.

Sample case-based Questions in Business Studies

Business Studies as a subject provides a way of perceiving and interacting with the business ecosystem. It is a core subject of the commerce stream that is purely theoretical and relevantly easier than the other compulsory subjects of the stream. Class 11 Business Studies syllabus is closely related to trade and commerce. The subject cannot be ignored as it is the foundation of many concepts and theories which are studied at an advanced level in class 12.

The case-based questions asked in the CBSE Business Studies question paper for class 11 are of two types:

As per the latest circular issued by CBSE on Assessment and Evaluation practices of the board for the session 2022-23, CBSE has clearly mentioned that competency-based questions including case studies will be different from subjective questions.  

The questions can also be categorized on their difficulty level:

• Direct: such questions can be easily solved. Their answer is visible in the given passage itself.
• Indirect/ Analytical: such questions are confusing and tricky. These can be solved by the application of the theory or principle that is highlighted in the provided text. 

How To Prepare For Case-based Questions? (Business Studies grade 11)

Students need to prepare well for the case-based questions before appearing for their class 11 Business Studies exam. Here are some tips which will help the student to solve the case-based questions at ease:

• Read the provided text carefully
• Try to comprehend the situation and focus on the question asked
• Analyze and carefully answer the question asked
• In general, the passage given would be lengthy in Business Studies case-based questions but their solutions are comparatively short and simple
• One can significantly save time if they follow a reversal pattern, that is going through the questions before reading the comprehensive case study passage.
• Answer in a concise manner
• One should concentrate on solidifying key fundamental principles/theories
• Go through the NCERT textbook in depth. The language used is crisp and simple.
• While providing solutions to the case-based question, pick the keyword/keyline based on which you are driving insights.

 In order to excel in the Business Studies class 11 exam, one needs to ignore the shortcut techniques and get to read the NCERT textbook rigorously. Case studies can be easily solved if your key fundamentals are strong and clear. The best part of having these questions is that the asked question itself projects a hint of its answer. These simple points if kept in mind will definitely help the students to fetch good marks in case study questions, class 11 Business Studies. 

Case study question examples in Business Studies

Here a re some given case study questions for CBSE class 11 Business Studies. If you wish to get more case study questions and other study material, download the myCBSEguide app now. You can also access it through our student dashboard.

Business Studies Case Study 1

Read the hypothetical text given and answer the following questions:

Manish, Rahul and Madhav live in the same locality. They used to meet and discuss their ideas. After discussing the recent fire breakout in their area, they decided to take fire insurance for their house or work area. Manish gets his house insured against fire for ₹1 lakh and during the policy period, his house gets damaged due to fire and the actual loss amounts to ₹2.5 lakh. The insurance company acquired the burning material and approved his claim. Rahul gets his godown insured against fire for ₹1 lakh but does not take enough precautions to minimize the chances of fire like installing fire extinguishers in the factory. During the policy, a fire takes place in his godown and he does not take any preventive steps like throwing water and calling the employees from the fire fighting department to control the fire. He suffered a loss of ₹1,20,000. Madhav took a fire insurance policy of ₹20 lakh for his factory at an annual payment of ₹24,000. In order to reduce the annual premium, he did not disclose that highly explosive chemicals are being manufactured in his factory. Due to a fire, his factory gets severely damaged. The insurance company refused to make payment for the claim as it became aware of the highly explosive chemicals.

How much can Manish claim from the insurance company?

• None of the above

How much compensation can Rahul get from the insurance company?

Which principle is violated in the case of Rahul?

• Insurable Interest
• Utmost Good Faith

How much amount is the insurance company liable to pay to Madhav if he files a case against it?

• Insufficient information

Which principle of Insurance is violated by Madhav?

• Insurable interest
• Subrogation
• Proximate Cause

The insurance company acquired the burnt material and approved his claim. Which principle of Insurance is highlighted in the given statement.

• (a) Mitigation
• (a) Utmost Good Faith
• (d) Subrogation

Business Studies Case Study 2

 Sarthak Electronics Ltd. has a loss of Rs 15,00,000 to pay. They are short of funds so they are trying to find means to arrange funds. Their manager suggested a claim from the insurance company against stock lost due to fire in the warehouse. He actually meant that they can put their warehouse on fire and claim from insurance companies against stock insured. They will use the claim money to pay the loan.

• Will the company receive a claim if the surveyor from the insurance company comes to know the real cause of fire?
• Write any two Values which the company ignores while planning to arrange money from false claims.
• State any three elements of fire insurance

Business Studies Case Study 3

OLX and qickr are examples of well-known websites used to conduct business. Tarasha’s sofa set got spoiled in the rain. Her friend suggested that she should change the fabric so that it looks new and put it for sale on Olx. Tarasha followed her friend’s advice and got her sofa repaired so that it looked better and uploaded nicely clicked pictures on the website without disclosing the fact that it was damaged from the inside. She found a buyer and sold it for Rs 10,000. After five days the buyer found the real state of the sofa set and called Tarasha but she did not answer any of the calls.

• identify the type of business highlighted in the above case.
• Identify any two values which are overlooked by Tarasha.
• Explain any two benefits and limitations of e-business.

Advantages of case study questions in Business Studies

Class 11 Business Studies syllabus is not very vast but has to be focussed upon as it forms the base for your 12th grade Business Studies syllabus. Students are supposed to prepare themselves thoroughly from the NCERT textbook. The Case-based questions prominently focus on the real and current scenarios of the Business world. Approximately 30% of the question paper will comprise case study questions that demand high-order thinking and reasoning skills from the students. The students ought to practice class 11 Business Studies case-based questions from the various options available to them, so as to excel in the subject.

• Enhance the qualitative and quantitative analysis skills of students
• Provides an in-depth understanding of the key Business theories/concepts
• Inculcate intellectual capabilities in students
• Help students retain knowledge for a longer period of time
• The questions would help to discard the concept of rote learning
• Case studies promote and strengthen practical learning.

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Class 11th Business Studies - Emerging Modes of Business Case Study Questions and Answers 2022 - 2023

By QB365 on 09 Sep, 2022

QB365 provides a detailed and simple solution for every Possible Case Study Questions in Class 11 Business Studies Subject - Emerging Modes of Business, CBSE. It will help Students to get more practice questions, Students can Practice these question papers in addition to score best marks.

QB365 - Question Bank Software

Emerging modes of business case study questions with answer key.

11th Standard CBSE

Final Semester - June 2015

Business Studies

Demonenonetization has led to a boom in e-business. It has proved to be a boon for e-business. In this cashless economy, people have started relying on digital cash. Usage of debit cards, credit cards has increased a great deal. People are ordering more and more goods using e-shopping. Amazon, Flipkart, Paytm have become a way of life. Small shopkeepers, street hawkers, and peddlars are also accepting payments through e-cash. India is becoming digital economy. (a) What are the factors that have led to popularization of e-business with demonetization? (b) How are payments through digital cash useful for the business world?

*****************************************

Emerging modes of business case study questions with answer key answer keys.

(a) (i) Increasing use of net (ii) Non-cash mode of payment (b) (i) It is easy to maintain records (ii) It is easy to expend business at larger scale.

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The glorious education, previous year question paper bcom (prog) business laws university of delhi, case studies of bst class 11 ch - 1 nature and purpose of business, class -11 business studies , chapter - 1 nature and purpose of business, case study and value-based questions with answers .

  Q1. Mr. Bhuvan is a Chartered Accountant in a Multinational Company. He gets rs 85,000 per month as his salary. On weekends, Mr. Bhuvan goes to nearby village and teaches some slum children, he does not charge anything from them, he does it out of sympathy and children. This gives him mental and psychological satisfaction. concern for poor.

(a) Working as CA in a MNC refers to which type of human activity. (b) Teaching students in slum is which type of human activity. (c) Identify the values followed by Bhuvan.

Ans. (a) Economic

(b) Non-Economic

(c) (i) Value of love and care.

  (ii) Value of helping poor.

Q. 2. Rajiv wants to start a whole sale business of readymade garments, but he is hesitating as it involves various problems such as customers for moving goods from place of production to market, informing customers about new designs and varieties added every season, threat of risk loss by fire or accident, storing the excess stock of goods, etc. He approaches his friend Sandeep who explained him about some branches of commerce, which can help Rajiv to overcome his hesitation.

(a) State the type of business Rajiv is planning to start.

(b) State which dimension of business can help Rajiv to overcome these hindrances. (c) Specify different types of Auxiliaries to trade which can help Rajiv to overcome his problems. Quote the line for each type from above Para.

  Ans. (a) Trade - Whole sale Trade.

  (b) Commerce

  (c) (i) "Searching for Customer" – Trade (ii) "Moving goods"

(iii) "Informing customers"

  (iv) "Threat of Risk" Transportation -                     Advertisement Insurance -

  Q. 3. Indu bought a readymade dress for ₹ 5000. Her friend liked the design of dress very much, so Indu sold the same dress to her friend for 5500 and made a profit of 500. After completing her studies Indu opened a shop of selling readymade dresses for girls.

(a) Can transaction between Indu and her friend be termed as business?

(b)State the features related to 'a'.

  (c) Can the sale of dresses on her shop be called as business?

  Ans.(a) No.

(b) "Regular Basis".

  (c) Yes, as it is done on Regular Basis.

Q. 4. Name the following:

(a) The economic activity showing a risk element and carried on profit.

(b) The trade in which two countries are involved.

(c) The trade in which goods are imported from one country for the purpose of exporting to other country.

(d) The industry which involves breeding and reproduction of plants and animals.

(e) The branch of commerce which remove hindrance of place.

Ans. (a) Business

  (b) External Trade

(c) Entrepot

(d) Genetic Industry

(e) Transportation.

Q. 5. An organisation planned to use CFL and LED which consume less electricity to reduce operational cost. They also give preference to labour intensive technique of production. What values company is implementing?

Ans.1. Value of saving electricity.

2. Value of creating employment opportunities.

3. Value of reduction in cost.

Q. 6. An organisation arranges recreational activities for its employees to refresh them and also send them for training to update their knowledge. What values are followed by the company? .

Ans. 1. Value of meeting personal objectives.

2. Value of motivating employees.

3. Values of giving job satisfaction to employees.

Q. 7. A Chartered Accountant advised his elient how to convert black money into white money and he also guided him how to save income tax by hiding his income. Is his act justified.

Ans. No conduct of CA and businessmen are not justified:

(a) CA is violating his code of conduct by acting unethically.

(b) Cheating government by paying less income.

(c) Acting dishonestly.

(d) The act is not even unethical but illegal also.

Q. 8. A Tool and Equipment Manufacturing Company gave bribe to purchase manager of a factory to buy tools of low quality and which are not having safety norms. The purchase manager accepted the offer and gave a big order. What values are violated?

Ans. 1. Value of playing with the health of workers.

  2. Not fulfilling safety norms competition. 3. Offering bribe is an unlawful act.

  Q.9. A unit set up by Tata in rural area and the company plan to develop roads, parks of that area they also started a school for local children of that area. What values are followed?

Ans. 1. Fulfilling social objectives.

2. Increasing literacy rate.

3. Improving standard of living.

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Chapter-wise MCQs for CBSE Class 11 Business Studies: Based on latest CBSE Syllabus 2023-2024

Find chapter-wise mcqs for cbse class 11 business studies. also, find attached the chapter-wise pdf download link for the same. these mcq-type questions will come in handy for class 11 students in preparation for end-term examinations in 2024.

MCQs for CBSE Class 11 Business Studies: Jagran Josh brings to you chapter-wise MCQs for CBSE Class 11 Business Studies. PDF download links for all chapters have been attached here, for your reference. These questions and answers have been specially prepared by subject experts, as per the Revised CBSE Syllabus 2023-2024. This article will be useful for CBSE students of Class 11. Also, find attached links to important resources for preparing for the end-term examinations in 2024.

• Direct Text-based Question Answer
• True or False
• Fill in the blanks
• Match the following
• Check which statement is true
• Pick the odd one out
• Assertion and Reasoning
• Case studies based/ Source-based

How to prepare for Multiple-Choice Questions (MCQs)

• Thoroughly read your chapters
• Prepare/ Read mind maps
• Solve in-text NCERT Questions
• Solve Sample papers
• Practice from Previous-Year Question Papers
• Take online Mock tests
• Prepare from Question Banks/Reference Books

CBSE Class 11 Business Studies Revised Syllabus 2023-2024 (PDF)

Mind Maps for CBSE Class 11 Business Studies 2023-2024 (PDF)

Find Chapter-wise MCQs for CBSE Class 11 Business Studies:

Here, we have provided MCQs for all chapters of Class 11 Business Studies. PDF download links for each chapter have been attached to the article for students. We have considered CBSE' s updated guidelines, curriculum, and other relevant details while preparing these Multiple Choice Questions for you. As per the competency-focused questions released by the boards, MCQs are going to play an essential role in the process.  

CBSE Class 11 Syllabus 2023-24 (All Subjects)

CBSE Class 11 Deleted Syllabus 2023-24 (All Subjects)

NCERT Class 11 Rationalised Content 2023-2024 (All Subjects)

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Business Studies Class 11 Exam Questions

Please refer to Business Studies Class 11 Exam Questions with solutions below. These important exams solved questions have been prepared based on the latest books and syllabus issued by CBSE, NCERT, and KVS. Our team of expert teachers of Class 11 Business Studies has designed these based on the latest examination guidelines and the type of questions expected to come in the examinations.

Exam Questions Class 11 Business Studies

We have provided exam questions with solutions for all chapters in Standard 11 Business Studies. You should learn these before the examinations as the answers have been designed to help you get better marks. You can click on the chapter-wise links below to access all problems and solutions for free. These will also help you to clear all concepts and improve your understanding of Business Studies in Class 11.

Chapterwise Important Questions Class 11 Business Studies

It is important for students to prepare for Class 11 Business Studies exams properly and practice questions and answers which have been designed based on the latest guidelines on the type of questions to be asked in the upcoming class 11 Economics examination. We have also provided MCQ Questions for Class 11 Business Studies which will be very useful for students. This year more MCQ-based questions and Case study-based questions are expected in examinations. We have provided all the latest questions which are expected to come in exams on our website. Students in Class 11 should download these questions in Pdf and share with teachers and friends.

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• NCERT Solutions
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• Chapter 11: International Business

NCERT Solutions for Class 11 Business Studies Chapter 11 - International Business

NCERT Solutions are an exceptionally helpful study resource for students to prepare well for the CBSE Class 11 Business Studies examinations. This study resource provides students with thorough knowledge of the topics covered, and the solutions collated by the subject-matter experts are easily understandable. Students can download the NCERT Solutions for Class 11 Business Studies Chapter 11 – International Business in the link below in PDF and practise offline as well.

Download the PDF of NCERT Solutions for Class 11 Business Studies Chapter 11 – International Business

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Access NCERT Solutions for Class 11 Business Studies Chapter 11 – International Business

Short Questions for NCERT Business Studies Solutions Class 11 Chapter 11

1. Differentiate between International trade and International business.

2. Discuss any three advantages of international business.

The advantages of international business are listed below:

1. International business acts as a source of earning foreign exchange reserves for the nations, which can be utilised in importing technology, petroleum and capital goods.

2. International business helps the development of both importing and exporting countries.

3. It provides a platform for the countries and producers to sell their produce to a base of international consumers. In this way, it increases employment opportunities for the people of those nations.

3. What is the major reason underlying trade between nations?

The following reasons encourage trade between nations:

1. Each country is blessed with different types of natural resources which may not be available or very scarcely available in other nations. Trading helps to make such items available to all nations.

2. Having an abundance of a resource, a country becomes specialised in that particular resource and one that can be produced locally with the available resources.

3. The cost of production and the productivity of labour will vary among countries, so it is easier to export goods that can be produced in surplus with the available expertise and import goods that a nation won’t be able to produce.

4. Why is it said that licensing is an easier way to expand globally?

Licensing is a comparatively easy way to expand globally due to the following reasons:

1. The amount of investment that needs to be made by the licensor is negligible hence it is a less expensive mode that can be adopted for entering international markets.

2. License is managed by the licensee, and thus there is less risk of government intervention in conducting operations.

3. Licensee will have good knowledge of the local market and hence will be helpful for the licensor to conduct marketing successfully.

5. Differentiate between contract manufacturing and setting up wholly owned production subsidiaries abroad.

6. Discuss the formalities involved in getting an export licence.

The following formalities are required in order to get an export license:

1. Opening a bank account with any bank that is authorised by the Reserve Bank of India and getting a registered account number.

2. Obtain an IEC (Import Export Code) from the DGFT (Directorate General for Foreign Trade) or the regional authority dealing with import-export licensing.

3. Get registered with the appropriate export promotion council and obtain a membership cum registration certificate.

4. Get registered with the ECGC (Export Credit and Guarantee Corporation) to protect itself from any type of payment risk.

7. Why is it necessary to get registered with an export promotion council?

Registering a firm with an export promotion council helps in the following ways:

1. For obtaining registration cum membership certificate

2. To reap the benefits available to the export firms by the government

3. The export promotion council will carry out promotional activities to create demand for domestic products in the international market.

4. Get support for promoting its products.

8. Why is it necessary for an export firm to go in for a pre-shipment inspection?

The pre-shipment inspection is necessary due to the following reasons:

1. It ensures that only good-quality items are exported.

2. Products get exported by a competent agency as chosen by the government.

3. Government has made it mandatory to check for export goods based on the Export Quality Control and Inspection Act 1963 and designated some agencies to carry out the task.

4. It is necessary to obtain an inspection certificate from the Export Inspection Agency for goods that are exported.

9. What is a bill of lading? How does it differ from the bill of entry?

A bill of lading differs from a bill of entry in its functionality, i.e. a bill of entry is a document that is supplied by customs and needs to be filled by the importer as soon as the goods are received. Meanwhile, a bill of lading is provided by the shipping company, and it is required at the time of the export transaction. A bill of entry contains details about the goods and the destination where it is going.

10. Explain the meaning of the mate’s receipt

A receipt that is issued by the commanding officer of the ship at the time cargo is landed on board is called a mate’s receipt. It contains the details about the vessel name, shipment date, package description, numbers and the condition of the cargo.

11. What is a letter of credit? Why does an exporter need this document?

A letter of credit is issued by the importer’s bank, and it is a guarantee to honour the payment of export bills to the bank of the exporter up to a certain amount. It is important for the exporter to get this document as this ensures that the mode of payment is protected by security and hence is a secure way to settle transactions that are international in nature.

12. Discuss the process involved in securing payment for exports.

The following steps are involved in securing payment for exports:

1. The exporter informs the importer about the shipment once it has been shipped.

2. Exporter sends important documents such as bill of lading, invoice copy, insurance policy, and letter of credit. These items are required by the importer at the time of claiming the goods on arrival and getting clearance from customs.

3. These documents are sent through the exporter’s bank along with an instruction that these should be delivered to an importer only when the importer accepts the bill of exchange.

4. The exporter bank receives the payment through the importer’s bank, and the amount is credited to the exporter’s account.

5. Immediate payment can also be received if the exporter submits the documents signing a letter of indemnity.

6. Once payment is received for exports, the exporter needs to obtain a certificate of payment from the bank. It contains all necessary documents stating that the export consignment has been presented to the import of payment and payment is received according to exchange control regulations.

Long Questions for NCERT Business Studies Solutions Class 11 Chapter 11

1. “International business is more than international trade”. Comment.

The following points will show how International business is more than international trade:

1. International business has a wider scope than international trade.

2. International trade consists of the import and export of goods and is an important part of international business, while international business encompasses many other departments.

3. International business includes services like travel, tourism, finance, banking, warehousing, insurance etc. It also consists of foreign investment and the production of goods and services overseas.

4. International trade is done on the basis of exporting goods, while international business is done by licensing, joint venture, wholly owned subsidiaries etc.

2. What benefits do firms derive by entering into international business?

Firms derive the following benefits by entering international business:

1. Firms can earn high profits by selling a product to international markets that have a low price in the domestic market than international market rates.

2. Better growth prospects for goods that are saturated in the domestic market.

3. By expanding to international markets, a firm can utilise its full capacity to produce goods and drive profits by taking advantage of economies of scale.

4. Businesses can beat the high domestic competition by exploring international markets.

5. Tap into long-term growth by expanding into international markets.

3. In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad?

Exporting is considered a better option than setting up subsidiaries because of the following reasons:

1. Managing an export business is relatively easy as compared to managing wholly-owned subsidiaries.

2. It needs less investment as compared to subsidiaries

3. Exporting is less risky as no equity investment is required, whereas, in the case of subsidiaries, 100% equity is borne by the company. Hence, it is responsible for all the losses in case of failure.

4. Exporting has a lower degree of political risk as compared to wholly owned subsidiaries.

4. Rekha Garments has received an order to export 2000 men’s trousers to Swift Imports Ltd., located in Australia. Discuss the procedure that Rekha Garments would need to go through to execute the export order.

Rekha Garments will have to follow the procedure given below to execute the export order:

1. Rekha must inquire about the importer’s creditworthiness, in this case, Swift Imports Limited. She can also ask for a letter of credit to be provided by the importer’s bank.

2. After conducting the check, she needs to register Rekha Garments to obtain an IEC so as to receive an export license.

3. Need to obtain the pre-shipment finance from the importer’s bank so as to get raw material for production and packaging.

4. Prepare garments as per the specification of the importer. Start working after receiving pre-shipment finance from the bank.

5. Obtain a certificate of inspection from an export inspection agency or any similar authority.

6. Obtain excise clearance from the Excise Commissioner. Issue of clearance subjected to the satisfaction of the Excise Commissioner.

7. Obtain a certificate of origin which states the country where goods are produced.

8. Apply to a shipping company to get shipping space. All essential details, such as types of goods, port name and shipment date mentioned.

9. Goods get properly packed and labelled with all the essential information

10. Insure the goods against risks and obtain customs clearance.

11. Goods loaded into the ship and issued a mate’s receipt.

12. Issuing of the bill of lading on receipt of freight as a token of acceptance

13. After shipping goods, the exporter prepares an invoice, which includes the goods sent and the amount paid by the importer.

14. Exporter sends a set of documents to the banker that needs to be given to the importer on acceptance of the bill of exchange. On receiving it, Swift Imports will instruct its bank to transfer money to the exporter’s bank account.

15. The exporter collects a bank certificate of payment, producing the necessary documents and bill of exchange presented to the importer for payment, and the payment has been received according to exchange control regulations.

5. Your firm is planning to import textile machinery from Canada. Describe the procedure involved in importing.

Importing textile machinery from Canada requires the following procedures:

1. Importer should obtain IEC (Import Export Code) by applying to the Regional Import-export Licensing Authority. It is necessary to complete the import procedure.

2. Importer needs to obtain a Registration cum Membership Certificate (RCMC) which is issued by Import Promotional Council and Import Development Authority.

3. Importer needs to issue a letter of credit in favour of the exporter from the bank and instructs about documents that need to be collected from the exporter before making the payment.

4. Exporter ships goods as per the specifications communicated by the importer, and on reaching, the importer country ship captain informs the Dock Officer about imported goods and submits this to customs to obtain customs clearance.

5. Customs officer examines the bill of entry and passes it to the appraiser officer, who verifies the details and the bill is returned to the importer to collect customs duty.

6. Identify various organisations that have been set up in the country by the government to promote the country’s foreign trade.

The following organisations were set up to promote foreign trade:

1. Export Inspection Council: Established by the Government of India under Section 3 of the Export Quality Control and Inspection Act 1963. Its aim is to promote exports through quality control and pre-shipment inspection.

2. Indian Institute of Foreign Trade: It was set up under Societies Registration Act in 1963, and it is an autonomous body which is responsible for managing the country’s foreign trade. It provides training in international trade.

3. Indian Institute of Packaging: Setup in 1966 by the combined effort of the Ministry of Commerce, the Indian packaging industry and other allied industries. It serves the packaging needs of exporters and domestic manufacturers.

4. Department of Commerce: It is the apex body of the Ministry of Commerce that deals with the formulation of policies related to foreign trade and import-export policies.

5. Export Promotion Council: It is aimed at promoting exports of particular products and is registered under the Companies Act.

6. Indian Trade Promotion Organisation: Formed in 1992 under the Companies Act, 1956. It maintains close interactions among traders, government and industry and organises trade fairs involving domestic and international goods.

7. What is IMF? Discuss its various objectives and functions.

IMF, or International Monetary Fund, was established in 1945, and it is headquartered in Washington, DC. The purpose of setting up IMF was to set up a system of the orderly monetary system. Its aim is to facilitate a system of international payments and checking adjustments in exchange rates for all currencies.

1. Promoting International Monetary Cooperation among member countries.

2. Promoting the growth of employment and income and also promoting balanced growth of international trade.

3. Promoting exchange stability so as to maintain orderly exchange arrangements among member countries.

4. Facilitating international payments among member countries.

1. Providing short-term credit to member countries.

2. To determine the value of a country’s currency and alter it to bring an orderly arrangement among member countries.

3. Maintain exchange rate stability.

4. Become a lending institution of foreign currency.

8. Write a detailed note on the features, structure, objectives and functioning of WTO.

WTO, or World Trade Organisation, was established in the year 1995. It was a successor to the GATT (General Agreement on Tariffs and Trade), based in Geneva. It deals with the trading of goods and services as well as Intellectual Property rights.

The features of WTO are as follows:

1. Trade of goods and services.

2. Decisions of WTO taken by member nations based on consensus.

The objectives of WTO are as follows:

1. Reducing tariff and non-tariff barriers imposed on the country.

2. Facilitates sustainable development by using optimum resources.

3. Improve the standard of living for members of foreign countries.

The functions of WTO are as follows:

1. Act as a dispute settlement body.

2. Provides an environment where member countries are encouraged to discuss their grievances.

3. Establishing a common code of conduct to eliminate trade discrimination.

Concepts covered in this chapter are listed below:

The important topics to be focused on in the Chapter 11 of NCERT Class 11 Solutions Business Studies are mentioned bwlo –

• International business
• Nature of international business
• International business vs domestic business
• Scope of international business
• Benefits of international business
• Mode of entering into international business
• Joint venture
• India’s place in world business
• India’s foreign investment
• India’s export and import of goods
• India’s export and import of services
• Exporting and importing

Class 11 Business Studies of NCERT Solutions Chapter 11 provides a wide range of illustrative examples, which helps the students to comprehend and learn quickly. The above-mentioned are the NCERT Solutions as per the Class 11 CBSE syllabus. For more solutions and study materials of NCERT Solutions Class 11 Business studies , visit BYJU’S or download BYJU’S – The Learning App for more information.

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MCQ Questions for Class 11 Business Studies with Answers PDF Download Chapter Wise

Here you will find Chapter Wise NCERT  MCQ Questions for Class 11 Business Studies with Answers PDF Free Download based on the important concepts and topics given in the textbook. Answers of all CBSE Class 11 Business Studies MCQs Multiple Choice Questions with Answers provided here with detailed solutions so that you can easily understand the logic behind each answer.

Class 11 Business Studies MCQs Questions with Answers Chapter Wise PDF Download

Practicing these CBSE NCERT Objective MCQ Questions of Class 11 Business Studies with Answers Pdf will guide students to do a quick revision for all the concepts present in each chapter and prepare for final exams.

• Nature and Purpose of Business Class 11 MCQ Questions
• Forms of Business Organisation Class 11 MCQ Questions
• Private, Public and Global Enterprises Class 11 MCQ Questions
• Business Services Class 11 MCQ Questions
• Emerging Modes of Business Class 11 MCQ Questions
• Social Responsibilities of Business and Business Ethics Class 11 MCQ Questions
• Formation of a Company Class 11 MCQ Questions
• Sources of Business Finance Class 11 MCQ Questions
• Small Business Class 11 MCQ Questions
• Internal Trade Class 11 MCQ Questions
• International Business Class 11 MCQ Questions

Students can also Check below CS Executive Business Important Questions and Answers

CS Executive MCQ & Important Questions and Answers 

• CS Executive Jurisprudence, Interpretation & General Laws Important Questions
• CS Executive Company Law Important Questions
• CS Executive Economic, Business and Commercial Laws Important Questions
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• CS Executive Securities Laws and Capital Markets Important Questions
• CS Executive Tax Laws MCQ
• CS Executive Corporate and Management Accounting MCQ
• CS Executive Financial and Strategic Management MCQ

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• Important Questions for CBSE Class 11 Business Studies Chapter 1 - Business, Trade and Commerce

CBSE Class 11 Business Studies Chapter-1 Important Questions - Free PDF Download

Important questions for class 11 business studies chapter 1 are now available on Vedantu for free download. Students can practice all the questions to get a clear idea about the chapter. The topics covered in this chapter become easier to learn and revise with the help of these important questions and answers prepared by the subject experts at Vedantu. Students can refer to these important questions Class 11 Business Studies Chapter 1 online as well as offline for free of cost. By solving these questions, they will get a conceptual understanding of the topics covered in this chapter.

Study Important Questions for Class 11 Business Studies Chapter 1 – Business, Trade and Commerce

Very short answer questions (1 mark).

1. Give an example of activity which is economic in one side and non-economic on other side. 

Ans: Profession requires specialized knowledge and it is economic on one side and non economic on the other side. 

State different types of economic activities? 

Ans: Economic activities can be categorised as:

Name the economic activity in which specialized knowledge is required.

Ans: Profession requires specialized knowledge.

2. A person sells his domestic furniture at a profit, will it be considered a business? Explain the characteristics of business which is being stressed upon.

Mr Sonu sold his washing machine & refrigerator on Quikr as he was shifting base to London. Is this a business activity?

Ans: No, for an activity to be business it must have ‘regularity’ characteristic of business. This characteristic means that there must be regular dealing of such goods and services.

3. Why is insurance known as a tertiary industry? 

Ans: Insurance is known as a tertiary industry because it provides supporting services finance and mitigation of risk to primary and secondary industries.

Which industries provide support services to other industries?

Ans: Tertiary industries provide supporting services to other industries. Such as telecommunication, banking, insurance, advertising etc.

4. What type of industry is fishing? 

What type of industry are poultry farms and plant nurseries? 

Which one of the broad categories of industries covers oil refinery and sugar mills?

Ans: Primary Industry

5. Categorise the following into business, profession and employment?

(i) A farmer

Ans: Business

(ii) An advocate

Ans: Profession

(iii) A clerk

Ans: Employment

(iv) A hawker selling toys for children

(v) A doctor

(vi) A person working in scooter repair shop on roadside

6. ABC Ltd. inventing new machinery to curb its production problem. Which objective it is trying to achieve?

Ans: Innovation under economic objective.

7. What reward does the businessman get for bearing risks?

Ans: Profit

8. Name the occupation in which people work for others and get remunerated in return.

a. Business

b. Profession

c. Employment

d. None of the above

Ans: (c) Employment

Employment is an occupation in which people work for others as per agreed terms and conditions and receive salary in return.

Short answer Questions (3 or 4 Marks)

1. What are the causes for the possibility of inadequate profits due to uncertainties or unexpected events?

No business is risk free in the light of this statement, explain the concept of business risk and it’s any three causes.

Ans: No business can function without taking risk as there is always a possibility of inadequate profits or even losses. The uncertainty of profits puts business at risk, like change in demand, change in technology, change in government policies etc.

Business risks are the uncertainties or unexpected events which may result in inadequate profits or losses.

The three causes of business risk are:

Natural causes: These are due to natural causes such as floods, earthquakes, etc. Every person has little control or no control over these causes.

Human causes: These causes include unexpected events caused by man, such as negligence of employees, power failure, employee’s or customer’s dishonest practices etc.

Economic causes: The economic causes involve the changes and variations taking place in the economy such as uncertainties due change of technology and method of production,political disturbances, change in prices, tax rates etc.

2. Compare between Business, profession & Employment on the basis of the following:

a) Capital Investment

c) Transfer of interest

Ans: The difference between Business, profession & Employment are:

3. What is business risk?

Ans: Business is the possibility of earning inadequate profits or losses due to uncertainties and unexpected changes in the market conditions. Business risk may be due to natural causes, human causes, economic causes and external causes.   

Nature of Business Risks

Risk is an essential part of every business. It can only be reduced but not eliminated in full.

It arises due to uncertainties like natural calamities such as earthquakes, floods etc., which are unavoidable.

The extent of risk depends upon the nature and size of business.

’No risk, no gain’ is applicable to every business. Hence, profit is the reward for risk taking.

4. Explain any four objectives of business?

Ans: Objectives are the purpose for which activity is performed. The four objectives of business are as follows:

Profit earning: Profit earning is necessary for successful survival and continuous growth of the organisation. Profits can be maximised by reducing cost and minimum wastage. Profits are the rewards for taking risks.

Productivity: Productivity can be calculated by comparing the value of output and value of input. Productivity can be increased by optimum utilisation of the physical and human resources.

Innovation: For surviving in the market, the business should take opportunities and become the first one to bring a new change in product, technology etc. A business should take first mover advantage against its competitors.

Market Standing: The business must convert its potential customer to actual customer and must maintain its actual customers as permanent customers. This will maintain the position of business in the market.

5. Define commerce, why is it of great importance in modern life?

Ans: Commerce acts as a link between the producer and consumers to enhance efficient distribution of goods and services. 

Importance of Commerce:

It helps in free and smooth flow of goods and services between the producer and customer. 

It creates employment opportunities.

It helps in the growth of industrial development. 

It helps in increasing the standard of living of the society.

6. Distinguish between primary and secondary industry Give examples.

Ans :  The difference between primary and secondary industry is given below:

7. “Business is an institution organized to provide goods and services under the incentive of private gain.” Discuss.

Define business. Explain the characteristics of business (any three)

Ans: Business is an economic activity which is regularly engaged in production or purchase and sale of goods and services to satisfy human needs and wants with an aim to earn profit.

The characteristics of business are as follows:

Production and/or procurement: Business is related to conversion of raw material into finished goods or sale and purchase of goods and services in the market. As a result, a business either manufactures the goods on its own or purchases them from producers, and then sells them to end customers.

Economic Activity: Business is an economic activity as it is done to earn money for livelihood. It satisfies human needs by providing goods and services for earning profits.

Regular Activity: To constitute a business there should be dealings in goods and services on regular intervals. Doing one single transaction does not constitute business. For example selling your old books, or furniture and purchasing a new one is not termed as business.

Element of Risk: Business is associated with a certain amount of risk as there is possibility of inadequate profits or losses due to change in tastes and preferences of customers, change in technology, fire theft, natural calamities, etc

8. Write differences among industry, commerce and trade on any five bases.

Ans: The difference between Industry, Commerce, and Trade

9. “Commerce comprises trade and all the services that make trade possible.” Discuss.

Ans: Commerce includes all the activities which are required for the exchange of goods and services. Commerce maintains smooth flow of goods and services from producer to customers by removing all the hindrances related to people, place, time, finance and information. It includes two types of activities: 

Trade: The buying and selling of goods and services with an aim to earn profit is termed as trade. The people who are involved in trade are referred to as traders

Auxiliaries to trade : Auxiliaries to trade assists the buying and selling of the goods and services by removing the hindrances of place, people, time, finance, risk and information. 

Long Answer Questions (5 or 6 Marks)

1. What provides the necessary link between producers & consumers with all those activities which are necessary for maintaining a free flow of goods & services? Discuss all those activities.

In business activities, there are some activities that are involved in the removal of hindrances in process of exchange i.e. from the producer to the consumer. Identify them. Also classify the activities which help in removing the following hindrances:

(i)Hindrance of place (ii) Hindrance of risk (iii) Hindrance of time (iv) Hindrance of finance (v) Hindrance of information

Tea is mainly produced in Assam, while cotton in Gujarat & Maharashtra but they are required for consumption in different parts of the country. How can this hindrance of place be removed? Also under what business activity will it be categorised.

Commerce is the sum total of activities that remove hindrances in the free flow of goods from producers to consumers. Explain.

How do traders remove the hindrance of person?

Ans: Commerce maintains smooth flow of goods and services from producer to customers by removing all the hindrances related to people, place, time, finance and information. 

Auxiliaries to Trade

Auxiliaries to trade assists the buying and selling of the goods and services by removing the hindrances of place, people, time, finance, risk and information. 

Transportation: It facilitates smooth flow of goods and services from the place of production to the place of consumption. Hence, it removes the hindrance of place. Example- Selling of mobile in Lucknow which is manufactured in Bangalore, tea produced in Assam, while cotton in Gujarat & Maharashtra but they are transported for consumption in different parts of the country. 

Communication: Effective and timely communication between the supplier, producer and consumers leads to successful trading. Thus, it removes the hindrance of information. 

Banking: Banks and financial institutions help producers or traders in providing finance required them in the form of loans, trade credit, overdraft, etc and hence, removing the hindrance of finance.

Warehousing : Producers and traders cannot sell the entire goods produced and thus stock of goods is always maintained by the producers or traders. Warehousing provides the facility to store unsold goods and hence removing the hindrance of time.

Insurance: Insurance removes the hindrance of risk. It facilitates business to reduce the risk of damages due to fire, theft, natural calamities, etc.

Advertising : Advertising acts as a link between producers, traders and consumers. It brings awareness among consumers about the goods and services available. Hence, removing the hindrance of information.

2. Starters of a new business are largely responsible for the success of the business they undertake various functions. Discuss the basic factors which influence the starter functions.

Explain any six factors that are important to be considered while starting a business.

Ans: The factors that are important to be considered while starting a business are as follows:

Size of business: The decision regarding the size of the business largely depends on the demand of the product and services in the market, the amount of risk and investment involved.

Choice of form of ownership: The choice of suitable form of business depends on the factors like legal formalities, line of business, capital requirement, liability of the business, profit etc. The entrepreneur can decide the form of business as:

Sole proprietorship

Partnership

Joint stock company

Cooperative society

Location of business enterprise: Location of a business directly affects the availability of raw material and labour, cost of production, and services like banking, transportation, warehousing etc.

Financing proposition : Finance is required not only to start a business but also for surviving in the market in the long run. Financial planning includes the amount of finance required for the capital and its source.

Physical facilities: While starting a business, the availability of physical facilities like land and building, plant and machinery and others services required for commencing business.

Competent workforce: Human resource is the greatest asset of any business. Competent and skilled workforce helps the business in reaching the height of the success. Thus, every business should wisely do the recruitment of personnel and must have training and development plans to increase the potential level of the workforce.

3. Profit maximization cannot be the sole objective of a business. Explain.

“Overemphasis on objective to earn profit may exploit the business”. What does a business should do to enable itself to bring the balance?

Ans: Business is established for earning livelihood and for this maximisation of profit is the main objective. But it is not the sole objective of business as it operates in the society and uses the resources of the society. 

So, it also has some social objectives that could is undertaken to maintain balance, these are as follows:

Social Objectives

Supply of desired goods and services: Business must supply goods and services of proper quality and with all required certifications. It must aim for customer satisfaction. 

Social and Fair Trade Practices: Business must not indulge into malpractices like black marketing, hoarding, compromising on quality or safety of products. Business must work for society.

Employment Opportunities: Business must create employment opportunities for the society especially for less advantaged sections of society.

Welfare of Employees: Businesses must work for growth and development of employees like training social and personal skills, and a good working environment. As employees directly contribute to productivity and profitability.

Social Welfare: Businesses must utilize their profits towards society like setting up schools, charitable hospitals, etc that are necessary for the development of society.

“Profit is not an objective but a requirement of business.” Do you agree with the statement? Support your answers with reasons

Ans: I agree that profit is a requirement of a business. The reasons are:

Long term survival: A business can survive in the market in the long run, only when it earns profit. This is because finance is needed by business in all the activities, and in all the areas. From day to day expenses, to expansion of business, finance is needed. Hence if a firm will not earn any profit, it won’t be able to pay expenses, or grow or survive in the market, leading to its closure.

Growth: Profits are needed for the growth, diversification and expansion of business. A business with no or less profit cannot implement such growth policies.

Efficient performance: Profits act as a motivating factor to the owners as well as the employees. Higher profits leads to higher efficiency and productivity on the part of people in the organization, thus leading to quality performance.

Reputation: Decent profit making enables the firm to pay out its expenses on time, in terms of salaries, wages, dividends, rents, etc. Hence all the stakeholders, and shareholders remain happy and content with the firm, thus leading to a high reputation and goodwill of the business in the market.

Fulfil social objectives: All other objectives of the business could be achieved only if the business earns sufficient profit. A business cannot fulfil the societal needs, and contribute towards the society if it does not earn satisfactory profits.

Innovation: Change is the law of nature. Hence, an organisation needs to keep changing and innovating to match with the changing and challenging environment. However, innovation requires skilled manpower, intense research, and high end technology, which is only possible when the business is able to generate suitable profits.

Reward for risk-bearing : A business undertakes multiple risks to keep the operations going, hence profits act as the reward of risk bearing.

4. ‘Kodak Pics’ is an advertisement agency initiated by Rahul, Sushmita & Prema. They have called a meeting to discuss the below given points

(i) Increase the profit margin by 20% in july.

(ii) Aiming bigger share in the market.

(ii) Making use of better lenses & improved techniques.

(iv) Making best use of cameramen, finance etc. employed by the business

(v) Improve efficiency in functioning of business.

(a) Which aspects of business objectives are being referred to here?

Ans: Economic Objectives are reflected here.

(b) Also develop each point to be discussed in the meeting by classifying the objective.

Ans: The objective are:

Increase the profit margin by 20% in july: Profit earning: Profit earning is reflected in this point. Profits can be maximised by reducing cost and minimum wastage. Profits are the rewards for efforts and investment put in by the owner.

Aiming bigger share in the market: Market Standing:  Market standing is reflected in this point. The business must convert its potential customers to actual customers and must maintain its actual customers as permanent customers. This will maintain the position of business in the market.

Making use of better lenses & improved techniques: Innovation: Innovation objective is highlighted here. It means developing new products or modification in existing products. Every business in order to survive in a competitive environment should  innovate its products or  develop new ideas to tackle competition.

Making best use of cameramen, finance etc. employed by the business: Physical and financial resources: This objective is reflected in this point. Business must use its resources according to the requirement and with minimum wastage.

Improve efficiency in functioning of business: Productivity: This objective is reflected in this point. Productivity t is a measure of efficiency. Every business must aim at increasing its productivity through the efficient use of resources. Productivity can be increased by optimum utilisation of the physical and human resources.

5. Jawaharlal prepares ‘Ghujiya’ for customers during Holi season every year. He prepared more ‘Ghujiya’ than he could sell this year. He employed women and children also and paid them less salary manufacturing on the packages. This way he generated profit for himself.

(a) Do you think he is fulfilling all the objectives of business?

Ans: No, he is not fulfilling all the objectives of business.

(b) If not which aspects of this objective is not being fulfilled? 

Ans: Social Objectives are not fulfilled as Jawaharlal is paying less salary to the women and children, and keeping all the profits to himself.

(c) Write any two values lacking in Jawaharlal.

Wastage of time and resources by preparing excess ghujia.

Fair and just behaviour by paying less salary to women and childre.

6. Different situations in different business are being elaborated below:

(i) Raghunath Gorkha had a match stick factory in Nepal which got destructed by the recent earthquake.

(ii) Mr Arya, a senior manager in a telecom company shared confidential information about the company with a competitor which led to huge losses for the company.

(iii) Vodafone Co. was charged with evasion of tax and asked to pay fine in cross which would lead to heavy losses for the company.

(iv) Type writers becoming redundant.

(a) Which characteristic of business is being referred to in all the above cases? 

Ans: ‘Business Risk’ is reflected in the above cases.

(b) How can you classify the different cases based on this characteristic?

Ans:   The classification is given below:

Raghunath Gorkha had a match stick factory in Nepal which got destructed by the recent earthquake.

Natural Causes: These are due to natural causes such as floods, earthquakes, etc. Every person has little control or no control over these causes.

Mr Arya, a senior manager in a telecom company shared confidential information about the company with a competitor which led to huge losses for the company.

Human Causes: These causes include unexpected events caused by man, such as negligence of employees, power failure, employee’s or customer’s dishonest practices etc.

Vodafone Co. was charged with evasion of tax and asked to pay fine in cross which would lead to heavy losses for the company.

Type writers becoming redundant.

Economic Causes: he economic causes involve the changes and variations taking place in the economy such as uncertainties due change of technology and method of production,political disturbances, change in prices, tax rates etc.

7. Dr. Sanvi is an orthopedic surgeon in AIIMS Hospital and Dr Maruti, her friend is a Pediatrician who has set his own clinic. Dr Maruti’s wife, Ms. Aditi operates her Cosmetic store. Compare & differentiate the nature of tasks undertaken by them.

Ans: Dr. Sanvi is involved in employment, Dr Maruti is involved in Profession and Ms. Aditi is involved in business.

The differences between business, profession and employment are:

8. Zainab, Shelly & Ravina are friends. They have just completed a fashion designing course. They wish to start a business together. They have Rs.10,00,000 savings put together and are planning to take a bank loan of additional Rs.10 lakhs. They have found a prime location in KarolBagh where they can set their boutique. They decide that they will initially not take very big orders. Based on this information, quote the lines associated with factors affecting the decision to start a business and classify them.

Ans: The Factors are:

Selection of type of business:   A person can enter primary, secondary or tertiary industry, based on the possibility of profit, demand, customer preference etc. In the case above they selected the business to be a boutique.

Quotation: “They have just completed a fashion designing course. They wish to start a business together.”

Financing proposition:   For every business, availability of capital or funds is an important factor while starting a business. Because capital is needed in each activity and aspect of business, such as in investment in fixed assets, stocks, meeting day to day expenses, etc.

Quotation: “They have Rs.10,00,000 savings put together and are planning to take a bank loan of additional Rs.10 lakhs.”

Location of business enterprise: It's an important factor while starting a business. The location of business is dependent on the easy availability of raw materials and labour, banking services, transportation services nearby etc. Any mistake in this can result in high losses to business.

Quotation: “They have found a prime location in KarolBagh where they can set up their boutique.”                                                                                                                                   

Size of Business : Every person has to decide whether it wants to operate on a large scale or at a medium scale.  It depends upon demand for the product and the necessary capital that person has. If a person is optimistic about all the factors, he can open up his business on a large scale, and vice versa.

Quotation: “They decide that they will initially not take very big orders.”

Students who are trying to get ahead in their class and score some good marks in the exams need to ensure that they have all the help that they need. This is where the important questions for class 11 business studies chapter-wise selections might be a great help to the students. These questions are created after careful observation of the syllabus and hence contain all the details which might be essential for passing the exams with proper marks. There is simply not a single speck of doubt about the fact that having some help from these class 11 business studies chapter 1 important questions is going to make things a lot easier for students.

Important Questions For Class 11 Business Studies Chapter 1

Some important questions for Class 11 Business Studies Chapter 1 are given below.

1. Insurance is a tertiary industry. Give an explanation.

2. How can a trader get rid of the hindrance of a person?

3. Provide a few differences between a primary and secondary industry.

4. Define commerce. What is the significance of commerce in modern times?

5. State the different objectives of a business.

The 1st chapter of the class 11 business studies textbook gives the students an idea about businesses and the other factors that are included in it. When students practice these questions, they will be able to understand the commercial position of our country and other countries in a better way. There are also some mentions about different industries that are considered to be a part of the business. Having class 11 business studies chapter 1 extra questions will also be a great help to the students who want to ensure that they have all the basic knowledge that they need about the business sectors in the best way. Not to mention that with regular practice and thorough reading, they can get more and more understanding of the whole chapter and hence will be able to solve more complicated questions as well.

Why Choose Us To Get Important Questions For Class 11 Business Studies Chapter Wise

Class 11 business studies chapter 1 questions, cover, different topics to help students out when they need to ensure that they get good marks in their examination. These questions have been picked by professional experts who have an idea about the subject. Also, these experts are totally aware of all the rules and regulations of CBSE and NCERT related exams. So, downloading the important questions for class 11 business studies chapter 1 will be a good idea for the students. They can read the questions and get the solutions to make sure that all of their doubts are cleared in a single place.

Also, these questions are really free of cost and available at the official site of Vedantu. There is a PDF version available for download or students can also have a look at the questions online.

For a subject like business studies, it is essential for students to gain as much info about the topics as they can. This could be one of the main reasons why students are always on the lookout for important questions for class 11 business studies in the best way. We have so many different types of important questions so that students can actually have some help when it comes to preparing for the topics of business studies.

We hope our crucial questions for Class 11 Business Studies will aid your study. Whether preparing for exams or seeking assignment help, these questions address chapter-specific doubts. Download the PDF on any device for easy access. Practicing these questions enhances knowledge, critical thinking, and analytical skills, covering topics like business objectives, stakeholders, and government's role. With a focused approach, students can prioritize study efforts and allocate time wisely. By practicing these questions, confidence grows, leading to improved exam performance. Start your preparations by downloading the questions and unlock your potential.

FAQs on Important Questions for CBSE Class 11 Business Studies Chapter 1 - Business, Trade and Commerce

1. Where do I get one mark questions of Chapter 1 of Class 11 Business Studies?

To practice the most relevant and recurring one mark questions of Chapter 1 of Class 11 Business Studies, it is best if you practice from the NCERT textbook and NCERT Exemplar. There are plenty of questions to practice from in these two books. While studying the chapter, you must take a special note of the definitions and formulae, as they tend to come as one marker. Also pay attention to the facts and figures given in certain concepts and memorise them thoroughly to leave no scope for error.

2. Where can I get the list of Important Questions of Chapter 1 of Class 11 Business Studies?

You can get a list of the Important Questions of Chapter 1 of Class 11 Business Studies on Vedantu. These important questions are available at free of cost on Vedantu(vedantu.com) and mobile app. Regardless, you must treat every NCERT question important and practise each one of them thoroughly. The NCERT must be considered of prime importance and all the concepts and questions must be memorised to the best of the student’s abilities. This is where the key questions for Class 11 Business Studies chapter-by-chapter selections might come in handy. These questions are based on a thorough examination of the curriculum, and so include all of the information that may be necessary for passing the examinations with good grades.

3. What are the main concepts of Chapter 1 of Class 11 Business Studies?

The first chapter of the Class 11 Business Studies textbook introduces students to businesses and the various variables that influence them. When students practise the NCERT questions, they will have a better understanding of our country's and other nations' commercial positions. There are also mentions of several industries that are regarded to be a component of the business as well. Students who wish to ensure that they have all of the basic knowledge they need about the business sectors will benefit greatly from having additional questions of Chapter 1 of Class 11 Business Studies.

4. Is Chapter 1 of Class 11 Business Studies easy?

Chapter 1 of Class 11 Business Studies can come across as a bit difficult because it is the first time the students are introduced through this subject. But to make sure that they don’t have a fall out with business studies, they need to make sure that they pay some extra attention and put in extra effort to understand it. Regular practice and consistent studies will help students get the hang of the chapter and they will set up the right base for the board exams of Class 12.

5. Are NCERT Solutions enough to prepare Chapter 1 of Class 11 Business Studies?

Class 11 Business Studies Chapter 1 NCERT questions include a variety of subjects to assist students in ensuring that they receive high marks in their exams. These questions were chosen by experienced specialists who are knowledgeable about the issue. Furthermore, these professionals are well familiar with all of the norms and regulations of CBSE and NCERT related exams. As a result, students should obtain the key questions for Chapter 1 of Class 11 Business Studies. They would read the questions and obtain the answers in one spot, ensuring that all of their uncertainties are addressed.

CBSE Class 11 Business Studies Important Questions

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Business Studies Class 11 Chapter 2 Important Questions and Answers

Home » CBSE » Business Studies Class 11 Chapter 2 Important Questions and Answers

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Business Studies is a subject taught in a Commerce student’s syllabus beginning in Class 11 and continuing through Class 12. Students will master an understanding of the area of management and other business disciplines if they study this subject. Forms of Business Organisation is the second chapter of the Class 11 syllabus, and it teaches about different forms of Business. This chapter covers concepts such as various forms of business organisation, features, merits, and demerits, and factors determining the appropriate form of business organisation. It carries significant weightage in the Business Studies syllabus. Students can easily access all this and more on the Extramarks website.

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Students must read through all the chapters to score well in Business Studies. Extramarks understands the importance of solving questions. As a result, we’ve gathered them from various sources, such as the NCERT Textbook, NCERT Exemplar, other reference books, past exam papers, and so on. Our Business Studies experts have curated step-by-step solutions to help students better comprehend the topics. Students can register with Extramarks and access Important Questions Class 11 Business Studies Chapter 2. 

Apart from Chapter 2 Class 11 Business Studies Important Questions, there is so much that the Extramarks website has to offer. Students can easily find materials like NCERT Solutions, CBSE revision notes , past year question papers, NCERT books, and more on the Extramarks website.

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A team of Extramarks specialists have developed an entire list of Business Studies Class 11 Chapter 2 Important Questions taking cues from numerous sources. The questions comprise a wide variety of topics, including the different forms of business organisation, features, merits, and demerits of business organisation, factors determining the appropriate form of business organisation, and so on. These questions and their solutions help students better comprehend Forms of Business Organisations.

Mentioned below are a few Important Questions from Class 11 Business Studies Chapter 2 and their solutions:

Q1. What are the important privileges available to a private company?

Answer: When a business is formed as a private corporation, it has several advantages and exemptions that are not accessible to public companies. Some of the main benefits that a private corporation has are as follows:

• A private business can be formed with as few as two members, but a public corporation requires seven.
• In private business the public is not asked to subscribe to company’s shares and hence a prospectus is unnecessary.
• Shares can be distributed without a minimum subscription requirement.
• A private company can start operating as soon as it receives its establishment certificate. On the other hand, the public company must wait until it gets the starting certificate before it may begin operations.
• A private company only needs two directors, but a public company requires at least three.
• A member index is not necessary for a private organisation but is required for a public corporation.

Q2. With a notable example, explain mutual agency in partnership.

Answer: Mutual agency refers to the legal connection between participants in a partnership who have authorization powers and the authority to engage the collaboration in business contracts. In another way, each partnership member has the authority to make business choices that commit or bind the entire partnership to a commercial contract with a third party or entity. For example, even if the partnership agreement prohibits it, a grocery store partner who acquires a delivery truck in the partnership’s name enters a legally enforceable transaction. On the other hand, such behaviour would be unlawful if a law firm partner purchased a snowmobile for the firm.

Q3. What is meant by “partner by estoppel”? Explain.

Answer: A person who shows others that they are a company partner via their actions, behaviour, or statements, is referred to as Partner by estoppel. Such a person is not a partner, and they are not responsible for providing any cash to the company, nor are they accountable for any  portion of the company’s profit or loss. The same individual, however, may be held accountable for the firm’s debts. Hence, as a result, if the Business has adequate assets or finances, debt repayment can be obtained by selling off the partner’s private assets via estoppel.

Q4. What exactly is HUF?

Answer: Although the Income Tax Act does not define the Hindu Undivided Family (HUF), it is recognised under Hindu law. Unmarried daughters are included in the HUF, as are all those who are lineally settled from the same ancestor. A person does not create HUF but by a family’s standing, i.e., it is created automatically in any Hindu household.

Q5. Why do some consider partnership a relatively unpopular form of business ownership? Explain the merits and limitations of partnership.

Answer: A partnership is viewed as a relatively unattractive sort of company ownership due to the inherent limitations that come with it. These limits include infinite responsibility, limited resources, the possibility of conflict, and a lack of consistency.

• Ease of closure and creation: A partnership business can be established rapidly by agreement amongst potential partners. A company doesn’t need to be registered.
• Balance decision-making: The partners might manage various responsibilities depending on their expertise. As a result, the decision-making process in a partnership business is more balanced than in any other kind of corporate ownership.
• A large amount of funds: Each partner in a partnership provides a certain amount of money. Consequently, compared to a single owner, it is feasible to collect a more considerable sum of cash and carry out additional activities as needed.
• Confidentiality: There is no legal requirement for a partnership business to publish its financial accounts or submit reports. As a result, it may maintain secrecy regarding its operations.
• Sharing the risk: The risks that come with running a partnership business are shared by all partners. As a result, individual partners experience less worry, tension, and stress.

Limitations of business partnership:

• Restricted Resources: Capital investment contributions are frequently insufficient to sustain large-scale commercial activity due to the limited number of partners. As a result, partnership firms struggle to expand beyond a particular scale.
• Conflicts of Interest: The decision-making authority in a partnership business is distributed among the partners. This is also dependent on their level of competence, foresight, and ability.
• Unlimited liability: Partners are accountable for repaying debts from their assets if the Business’s assets are insufficient to fulfil its obligations.
• Lack of continuity: When one of the partners dies, retires, becomes bankrupt, or becomes mad, the partnership comes to an end. On the other side, the surviving partners might enter into a new agreement and continue to run the business.

Q6. In what form of Business do individuals associate freely for profit, with capital dividends into transferable shares, and ownership of which is a requirement of membership? Explain in terms of characteristics.

Answer. A joint-stock company is a non-profit organisation formed by a group of people to do profitable economic activities. It has a legal status distinct from its members and a capital structure separated into transferable shares. A corporation is an independent legal entity with its legal identity, perpetual succession, and a common seal. In a corporation, the shareholders are the company’s owners, and the Board of Directors, which the shareholders elect, is the company’s central management body.

The company’s capital is divided into smaller components known as “shares,” which can be freely transferred from one shareholder to the next (except in a private company). A joint-stock firm has the following characteristics:

• A corporation is a made-up entity. It is a legal entity that exists without the participation of its members.
•  The legal personality of a corporation is established. The law does not regard the Business and its owners as the same.
• Starting a business is a time-consuming, costly, and challenging endeavour. Therefore, incorporation is required for all enterprises.
• It will only be deactivated after completing a specialised operation known as winding up. Members may come and go, but the firm does not cease to exist.
• A company’s common seal may or may not exist.
• All shareholders share the risk of a company’s losses.

Q7. Even though there are limitations of size and resources, several people continue to prefer sole proprietorship compared to other forms of organisation? Why?

Answer: Due to the numerous sheer benefits, it provides despite the size and resource limits. The sole proprietorship is the company’s form of choice. The following are some of the advantages:

• A single proprietorship firm is simple to set up since there are few legal requirements. Similarly, closing a firm is a painless process.
• The sole owner controls the firm as the only decision-maker, allowing for swift choices.
• The sole proprietor enjoys all the Business’s gains while bearing all its misfortunes.
• Because the lone proprietor is the only person in charge of the business, it is highly flexible.

Q8. Which business model is best for the following businesses, and why?

• Coaching centre for the students of science subject
• A beauty salon
• A shopping centre
• Little repair shops

Answer. The suitable business model for the businesses as mentioned earlier would be:

• Coaching center for the students of science subject: Collaboration with a science coaching facility. It’s simple to set up and run, and it’s inexpensive. Partners report their share of profit or loss on their tax returns.
• A beauty salon: A salon can be run as a sole proprietorship. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.
• A shopping center: shopping malls are JSCs (joint-stock corporations). Personal responsibility for commercial debts is restricted for business owners.
• Hotel: In the hotel industry, there are joint-stock companies. Small businesses are drawn to LLCs and corporations because they minimize their owners’ liability for corporate debts and court judgments against the company. Another factor to consider is income taxes: you may set up a limited liability company (LLC) or a corporation to benefit from reduced tax rates. Furthermore, an LLC or company may be able to deduct the cost of a range of fringe benefits passed on to its employees (including the owners) as a business expense.
• A little repair shop: A sole proprietorship is appropriate for a small repair shop. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.
• Restaurant: Ownership of a restaurant as a sole proprietor. Created and ran straightforwardly and cost-effectively. The owner declares profit or loss on their tax return.

Q9. How does a cooperative society exemplify democracy and secularism? Explain.

Answer: A cooperative society is run by persons chosen by all members through a democratic process. Each member has an equal right to vote, regardless of the amount of money they have invested. As a result, it functions as a democracy in which all members are treated equally and have similar rights. Members are not discriminated against because of their caste, religion, or gender. People of the management committee can select the members they believe best represent them. As a result, it denotes secularism.

Q10. What does it mean to have unlimited liability?

Answer: General partners and sole proprietors with unlimited liability are jointly and severally liable for the company’s debts and obligations. However, this obligation is not limited and can be paid off by seizing the owners’ assets, distinguishing it from limited liability partnerships.

Q11. Compare the status of a minor in a Hindu joint family business with that in a partnership firm.

Answer: A person under 18 is considered a minor in Indian law. By being born into a Joint Hindu household, a minor becomes a member of the family company. Like other family members, the minor has equal ownership and rights to the property and company. However, his obligation is limited to his part of the property.

As per the Indian Partnership Act of 1932, a minor cannot become a partner in a partnership business. However, if all partners agree, a minor can be initiated and partake in a firm’s profits. Still, a minor does not need to contribute capital or carry any obligation if the Business supports the firm. Therefore, minors aren’t regarded as partners. However, once they reach the age of 18, they have the option of continuing the relationship or terminating it.

Q12. Who has equal ownership rights to an ancestor’s property? Emphasise its most important aspects

Answer: A Joint Hindu Family is a form of business owned and operated by members of the Hindu Undivided Family (HUF). The company’s membership is based on birth in a specific family, and three generations of the same family can be members. The family’s business is run by the eldest member of the family, known as Karta. Joint Hindu Family Business members with equal ownership rights over an ancestor’s property are known as coparceners.

A combined Hindu family company has the following characteristics:

• Because membership is by birth, there is no requirement for an agreement.
• Except for the Karta, all members are only responsible for their portion of the Business’s co-coparcenary property. The Karta’s responsibility is boundless.
• Karta oversees the family company, and his choices bind everyone.
• After Karta’s death, the business is carried on by the next eldest son, Karta.

Q13. Why is it important to choose an appropriate form of organisation? Discuss the factors that determine the choice of form of organisation.

Answer: Choosing an appropriate business organisation is necessary since it is one of the most important decisions to make when beginning a business or expanding an existing one. A business can be owned and run in several ways. It’s challenging to modify a company model after it’s been decided. As a result, the type of business company chosen should be done with care and consideration.

The following factors influence organisational structure selection:

• Control: With a sole proprietorship, you have complete control over your operations and decision-making authority. If the owners, on the other hand, want to share ownership to make better judgments, they can form a partnership or a corporation.
• Nature of Business: Businesses that involve direct personal connection with customers, such as beauty salons or grocery stores, are better suited to a single proprietorship. The corporate kind of structure benefits large manufacturing units. The partnership structure is significantly more served in the case of professional services.
• Management Skills: Being informed in all firm parts is difficult for a sole owner. Members split their labour in other organisations, such as partnerships and businesses, allowing management to specialise in specific areas and make better judgments.
• Capital Requirements: The corporation form is suitable for large-scale activity since it may generate a large amount of money by issuing shares. There are two options for medium and small firms: partnership or sole proprietorship. In the framework of a company, expansion capital requirements may be managed more easily.
• Continuity: The continuity of sole proprietorship and partnership enterprises can be disrupted by events such as the owners’ death, insolvency, or insanity. In organisations like joint Hindu family companies, cooperative societies, and corporations, such factors, on the other hand, have minimal influence on the business’s survival.
• Liability: The liability of the owners/partners of a sole proprietorship or partnership is unlimited. This might lead to the owners’ assets being used to repay the debt.
• Cost and Convenience of Starting a Company: A sole proprietorship is straightforward to start in terms of initial business costs and legal procedures, but because of its more minor activities, a partnership has the advantage of less legal formalities and lower prices. Registration is necessary in the case of cooperative societies and companies. The process of founding a company takes time and money.

Q14. What are the reasons for the formation of cooperative forms of organisation? Describe the different sorts of cooperative societies.

Answer. A cooperative society is a collection of individuals who get together voluntarily for the common welfare of its members. They are motivated by a desire to defend their economic interests from potential exploitation by intermediaries looking to increase their profits. The process of founding a cooperative organisation is simple, and all that is necessary is the agreement of at least ten adults. A society’s capital is raised by selling shares to its members. An organisation acquires a distinct legal character when it is registered.

One sort of cooperative society is the consumer cooperative society.

• It was designed to protect consumers’ interests.
• To improve operational savings, society strives to eliminate intermediaries. Instead, it purchases things in bulk from wholesalers and resells them to its members.
• Profits are dispersed depending on capital contributions to the organisation or purchases made by individual members.

Producer Cooperative Societies are a specific sort of producer cooperative society.

• It was established to protect the interests of small farmers.
• Members are producers looking for inputs to create commodities to fulfil customer demands.
• Profits are distributed according to their contributions to the society’s overall pool of products produced or sold.

Cooperative Societies Marketing-this organisation was established to help small manufacturers market their products.

• Producers that demand fair pricing for their commodities are among the group’s members.
• It combines individual members’ production and marketing activities such as shipping, storage, and packaging to sell the commodities for the best feasible price. Profits are dispersed according to the amount of money each member puts in.

Farmers’ Cooperative Societies were formed to protect farmers’ interests by providing high-quality inputs at a reasonable price.

• Members are farmers who want to collaborate on farming projects.
• The idea is to increase productivity while reaping the benefits of large-scale farming. Improving farmer output and returns while addressing challenges associated with farming on fragmented land holdings.

Cooperative Financing Societies were established to give members timely credit at reasonable rates.

• Members are individuals seeking financial assistance in the form of loans.
• The purpose of such groups is to protect members from being taken advantage of by lenders who demand high-interest rates on loans.

A cooperative housing organisation is a sort of Cooperative Housing Societies.

• It was established to assist low-income people in constructing homes at a reasonable cost.
• These societies are people looking for a cheaper location to reside in.
• The purpose is to alleviate members’ housing issues by constructing homes and allowing them to pay in instalments.

Q15. If registration is optional, why do partnership firms willingly go through this legal formality and register themselves? Explain.

Answer: Although partnership business registration is optional, many firms choose to do so. This is owing to the severe legal consequences of failing to register. Listed below are a few examples:

• The partners of a non-registered business cannot sue a third party, but the non-registration of a partnership firm does not prevent other firms from hiring it.
• The company is forbidden from filing a lawsuit against any of its partners. Similarly, a partner in a non-registered firm cannot sue their co-partners or the company.
• Claims against a third party by a non-registered partnership entity cannot be enforced in court. As a result, partnerships are established to overcome these disadvantages.

Forms of Business Organisation Class 11 Important Questions – Key Topics Covered 

Class 11 Business Studies Chapter 2 Important Questions covers the following key topics:

Forms of business organizations

There are several different types of business organizations from which to choose:

• Sole proprietorship 

Joint Hindu family business

• Partnership 
• Cooperative societies

Joint-stock company

Sole Proprietorship

It is a type of Business owned, managed, and controlled by a single person who carries all the risks and reaps all the rewards.

• It can be formed and disbanded without the need for any legal requirements.
• In this business organisation, the lone proprietor’s responsibility is unrestricted.
• As the single risk carrier and profit recipient, he bears all the risks and reaps all the rewards.
• There is no distinction between the owner and the Business in the eyes of the law.
• All choices must be made by the owner, which necessitates prompt decision-making.
• As a lone proprietor, it is simple to keep company secrets.
• Because there is no one to share gains with, the owner enjoys all the profits.
• There are no legal requirements for establishing and closing a business, making creating and completing one simple.

Limitations:

• The owner’s savings or money borrowed from friends and family might be used to support the Business.
• A business’s life expectancy is limited as it is dependent on the owner’s health and mental state.
• His assets are at stake if the firm fails to satisfy its debts.
• A single individual may not be able to oversee all of the functions.

It is a type of business that is owned and managed by members of an undivided Hindu family, with three generations of family members potentially participating.

• Hindu Undivided Families are created when at least two family members have ancestral property. The Hindu Succession Act of 1956 governs it.
• Except for the Karta, all family members have limited responsibility for their part of the company property.
• Karta oversees all actions inside the corporate organisation.
• It can be stopped if all members of the family agree to it.
• Organisation membership is based on birth.
• With ‘Karta,’ you have complete control over your firm and can make better decisions.
• If ‘Karta’ dies, the Business continues until all members desire to continue, and then control is given to the next eldest member.
• Family members are only liable for their share of the business party.
• Because family members feel connected and loyal, they work together to achieve a common goal of progress.
• Businesses might be supported primarily via inheritance, restricting financial resources.
• Karta’s personal property is at risk due to his unlimited liability.
• Differences of opinion among members and the ‘Karta’ might lead to conflict.
• Karta’s managerial abilities are limited, and he may not be familiar with all of the Business’s functions.

Partnership:

According to the Partnership Act of 1932, a partnership is a relationship between people who have agreed to share the earnings of a firm run by all or by one acting on behalf of all of them.

• The partnership Act of 1932 governs the establishment of the Business.
• The liability of all company partners is unlimited.
• All the partners share the risk in the Business.
• All decisions are made with the approval of all partners, and each partner bears responsibility for the company’s day-to-day operations.
• Because registration is optional, a business can be formed and ended with the approval of all partners.
• As partners take on tasks according to their competence, all choices are made by consensual partners.
• All partners contribute money, broadening the scope of large-scale company operations.
• There is no need to report financial results; therefore, maintaining corporate secrets is simple.
• Their complete responsibility covers each partner’s personal property.
• All parties may have differing viewpoints, which can lead to conflict.
• Any disagreement between partners or the death of a partner might put the company out of operation.
• Due to a lack of financial disclosures, an outsider can’t determine the actual economic situation.

Cooperative society

An organisation of volunteers working for a shared goal to protect members’ economic and social interests. The Cooperative Societies Act of 1912 requires it to be registered.

• Any individual with a shared interest, regardless of caste, gender, or religion, is free to join or leave a cooperative organisation at any time.
• A cooperative society has a different identity from its members, and the registration of such a group is required.
• The goal of forming a society is to provide mutual assistance to team members.
• Each member has the same right to vote and elect managing committee members.
• Cooperative societies maintain their existence in the face of death, bankruptcy, or insanity among their members.
• Members of society work willingly, which helps to save expenses.
• The only funding source is the member’s capital contribution, and the low dividend discourages members from contributing money to the organisation.
• Volunteer members may lack the requisite competence and skills, resulting in inefficient operations and management.
• It’s challenging to preserve secrets since members provide all information about the society’s operations at the meeting.

“A corporation is an artificial person with a separate legal existence, eternal succession, and a common seal,” according to the Companies Act of 2013.

• A corporation is a legal entity with legal standing but does not act as humans do. The board of directors conducts all corporate actions in the corporation’s name.
• Companies are founded following the legal requirements outlined in the Companies Act of 2013.
• A corporation is formed by law and may only be disbanded by legislation. Therefore, the company’s existence is unaffected by the status of its members.
• The responsibility of shareholders is limited to their investment in the firm. Therefore, there is no chance of personal assets being lost.
• The firm’s existence is unaffected by its stockholders’ status; it continues to exist.
• Companies can borrow vast sums of money from financial institutions or banks and solicit cash from the public.
• The formation of a corporation necessitates the completion of several documents and legal requirements, making the process lengthy and complicated.
• There is no confidentiality or secrecy because all financial information is given to the general public.
• Decision-making must adhere to a hierarchy, leading to delays in making judgments and implementing actions.

Choice of the Type of Business organisation

• Nature of Business
• Cost of setting up the organisation
• Capital consideration
• Degree of control
• Management ability

The briefly described topics in the above sections are covered in the Important Questions Class 11 Business Studies Chapter 2. 

Benefits of Solving Class 11 Business Studies Chapter 2 Important Questions

Business Studies is one subject that requires a lot of reading and revisions. This subject is introduced in Class 11, and it prepares the base for Class 12 board examinations. Therefore, students are advised to access Important Questions of Business Studies Class 11 Chapter 2 . Students will get a sense of confidence by solving essential questions from all the chapters and overlooking their solutions. 

Mentioning below are some benefits of solving Important Questions Class 11 Business Studies Chapter 2:

• Students will benefit from practising questions similar to exam questions to do better in their examinations and earn high grades.
• The questions and answers follow CBSE criteria and are based on the most recent CBSE syllabus . As a result, students can rely on them.
• These important questions are prepared by following the exam writing pattern. Therefore, going through these will help students prepare for exams too.

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Q.1 The North Coast Cooperative that was Established in 1973 was the large consumer cooperative that offered a full service grocery store and deli. Director started to deal with bulk purchasing and packaging issues. Many people in the college-campus area wanted a supply of natural food products, which didnt exist. They wanted a cheaper, more reliable supply if they purchased togetherin bulk.

From the start, the co-op tried to provide a market for local produce. Initially, the farmers provided a fairly limited variety, mostly tomatoes, sweet corn, zucchini and other common garden vegetables. The co-op uses purchasing contracts, which act as a type of insurance to motivate farmers to produce new and different varieties

Explain the type of cooperative society that is refered to here. Also give three points to support the formation of such a form of business enterprise.

Marks: 1 Ans

This is a consumer cooperative society. These are formed to protect the interests of consumers. Members are consumers who want to get good quality products at reasonable prices. The society aims at eliminating middlemen for economy in operations.

Society purchases goods in bulk directly from the wholesalers and sells goods to the members directly.

Profits are distributed on the basis of either their capital contributions to the society or purchases made by individual members.

Merits of cooperative form of organisation are:

(i) Equal voting status: There is a principle of ‘one man one vote’ i.e., irrespective of the capital contribution by a member, each member is entitled to equal voting rights.

(ii) Limited liability: As the liability of members of a cooperative society is limited to the extent of their capital contribution, their personal assets of the members are safe from being used to repay business debts.

(iii) Stability: Death, bankruptcy or insanity of the members do not affect continuity of a cooperative Society i.e., it remains unaffected by any change in the membership.

(iv) Economy in operations: Focus of society is on elimination of middlemen which helps in reducing costs.

(v) Government support: Cooperative society exemplifies the idea of democracy and hence Government supports in the form of low taxes, subsidies, and low interest rates on loans.

(vi) Ease of formation: It can be started with a minimum of ten members and registration procedure is simple with few legal formalities.

Q.2 A friends group of a hotel management institute wants to start their own catering house that will serve parties, weddings, church functions and business events. All 4 of them are very good cooks and have managed the university parties very well. They want to start and see that how this business works with contributing small small savings initially.

What form of business organisation shall they form with limited funds

Looking at their conditions and case, the friends shall form a partnership initially. Partnership offers the advantage of less legal formalities and lower cost because of limited scale of operations.

After being successful, this partnership can take form of any other form of business organisation based on the decisions of partners.

Q.3 Karan is the sole owner of a shoe manufacturing factory. He took loan of `30 lakhs from a bank so as to expand his business further. However, he incurred losses in the business, due to which Karan was not able to pay the loan on time and his assets were also not sufficient enough repay back the loan. As a result, the bank asked him for repayment of loan, but he refused to pay on the ground that the loan was taken in the name of business and not for personal use. The bank file a case against Karan and the court gave the decision in favor of Bank on the on the basis that Karan is the sole proprietor and his business doesnt have separate identity from his own. The Court further stated that Karan is liable to repay the loan even by selling his personal property.

State the demerits of the business organisation being highlighted in the above case.

Marks: 6 Ans

The form of business organisation being highlighted above is Sole proprietorship.

Demerits of Sole proprietorship

• Limited life: Death, insolvency or illness of proprietor affects the business and may even lead to its closure as he/she is the sole owner of the business.
• Unlimited liability: Owner has unlimited liability. In case of business failure, creditors can recover their dues not only from the business assets, but also from the personal assets of proprietor. It makes the sole proprietor less inclined towards taking risks in the form of innovation or expansion
• Limited resources: Resources are limited to his/her personal savings or borrowing from other parties. Banks and other financial institutions might hesitate in lending long term loan to the sole proprietor. Size of the business rarely grows much and generally remains small due to lack of resources.
• Limited Managerial Ability: The proprietor has to assume responsibility of varied managerial tasks. Since a business owner may not be a specialist in every field, there is a possibility of unbalanced decision making. Moreover, proprietor may not be able to employ and retain talented and ambitious employees, due to limited resources.

Q.4 A private company is superior to a public company. Discuss this statement in the light of privileges of a private company.

Privileges of a private limited company as against a public limited company:i. A private company can be formed only by two members, whereas seven persons are needed to form a public company. ii. There is no need to issue a prospectus as public is not invited to subscribe to the shares of a private company. iii. Allotment of shares can be done without receiving the minimum subscription. iv. A private company can start business as soon as it obtains the certificate of incorporation, whereas a public company can start its business only after receiving the certificate of commencement of the business. v. A private company needs to have only two directors as against the minimum of three directors in case of a public company. vi. A private company is not required to keep an index of members, while it is necessary in case of a public company.

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Cbse class 11 business studies important questions, chapter 1 - business, trade and commerce.

Chapter 3 - Private, Public and Global Enterprises

Chapter 4 - business services, chapter 5 - emerging modes of business, chapter 6 - social responsibilities of business and business ethics, chapter 7 - formation of a company, chapter 8 - sources of business finance, chapter 9 - small business, chapter 10 - internal trade, chapter 11 - international business, faqs (frequently asked questions), 1. how many business studies books are there for class 11.

For Class 11 Business Studies, the Central Board of Secondary Education (CBSE) only recommends one book. Therefore, the National Council of Educational Research and Training (NCERT) has released this book, which is available in both English and Hindi. This book is broken into two sections and has ten chapters. Part A comprises six units that address business foundation information, while part B contains the remaining four units that discuss financial and trade knowledge.

2. What are the essential chapters in Business Studies in Class 11?

There are ten chapters in the Business Studies syllabus for Class 11. Chapter 7 – Sources of Business Finance, Chapter 8 – Small Business, Chapter 9 – Internal Trade, and Chapter 10 – International Business are the most significant. It is so because they have a greater weight than the rest of the syllabus. Students can refer to Important Questions Class 11 Business Studies Chapter 2 for easier comprehension of these chapters.

3. What is so special about Important Questions Class 11 Business Studies Chapter 2 that it makes Extramarks stand out from the rest?

 These Important Questions Class 11 Business Studies Chapter 2 are developed exclusively by the Extramarks subject experts. These solutions are 100 percent authentic and have been made after much research. They cover the concepts of the entire chapter and are written in simple and easy language.

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CBSE Class 11 Business Studies Marks Wise Question

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CBSE Business Studies Marks Wise Question for Class 11

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