ICSE Class 10 Commercial Studies Sample Question Papers 2 with Answers
Maximum Marks: 40
Time: 1 1/2 Hours
Section-A [10 Marks]
(Attempt all questions from this Section)
Question 1.
(i) The full form of NEFT is:
(a) Non-Effective Foreign Transport
(b) National Emergency Financial Transfer
(c) National Electronic Funds Transfer
(d) New Emergency Fund Transmission
Answer:
(c) National Electronic Funds Transfer
Explanation:
The full form of NEFT is National Electronic Funds Transfer.
(ii) This bank is considered to be the ‘Lender of the Last Resort’:
(a) The Central Bank
(b) State Bank of India
(c) Bank of Kashmir
(d) Indian Bank
Answer:
(a) The Central Bank
Explanation:
The Central Bank of the country is considered to be the ‘Lender of the Last Resort’.
(iii) Opening Stock is a part of:
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet
(d) None of these
Answer:
(a) Trading Account
Explanation:
Opening Stock is a part of the Trading Account. It is placed on the debit side of Trading Account.
(iv) A ……………. is a prediction about future events based on some scientific and mathematical tools.
(a) Forecast
(b) Estimation
(c) Vision
(d) Mission
Answer:
(a) Forecast
Explanation:
A forecast is a prediction about future events based on some scientific and mathematical tools.
(v) This card provides a kind of loan to the user:
(a) Ration Card
(b) Identity Card
(c) Debit Card
(d) Credit Card
Answer:
(d) Credit Card
Explanation:
Credit card provides a kind of loan to the user. A user can buy the goods and make the payments with the help of credit card even when he does not have any amount in his bank account.
(vi) When the employers go to the educational institutions for selecting the candidates then such kind of recruitment is known as:
(a) Gate hiring
(b) Casual callers
(c) Recommendation
(d) Campus Interview
Answer:
(d) Campus Interview
Explanation:
When the employers go to the educational institutions for selecting the candidates then such kind of recruitment is known as Campus Interview.
(vii) …………. warehouses are those warehouses which are licensed by the Government to accept imported goods for storage before the payment of custom duties by importers of such goods.
(a) Bonded
(b) Private
(c) Special
(d) Classified
Answer:
(a) Bonded
Explanation:
Bonded warehouses are those warehouses which are licensed by the Government to accept imported goods for storage before the payment of custom duties by importers of such goods.
(viii) The …………. is a forecast of total sales, expressed in terms of money and quantity.
(a) Material budget
(b) Purchase budget
(c) Sales budget
(d) Minor Budget
Answer:
(c) Sales Budget
Explanation:
The sales budget is a forecast of total sales, expressed in terms of money and quantity.
(ix) This is a direct expense:
(a) Advertising Expenses
(b) Repair
(c) Carriage Inward
(d) Depreciation
Answer:
(c) Carriage Inward
Explanation:
Carriage Inward is a direct expense. Direct expenses are all those expenses which are incurred for bringing the purchased goods to the go down or trading place of the trader.
(x) Those assets that are not assets in reality but are shown in the Balance Sheet on the asset side are known as .
(a) Good Assets
(b) Fictitious Assets
(c) Fixed Assets
(d) Normal Assets
Answer:
(b) Fictitious Assets
Explanation:
Those assets that are not assets in reality but are shown in the Balance Sheet on the asset side are known as Fictitious Assets.
Section-B[30 Marks]
(Attempt any three questions from this Section)
Question 2.
(i) Write short notes on the following:[2]
(a) Employment exchanges
(b) Fraudulent practices
(ii) Give two objectives of the warehousing. [2]
(iii) Explain the utility of Budgeting. [3]
(iv) Distinguish between Trial Balance and Balance Sheet. [3]
Answer:
(i)
(a) The Government has set up large number of employment exchanges throughout the country. Anyone looking for employment can get himself registered in the employment exchange. Employers notify the vacancies and the various exchanges refer suitable candidates for recruitment.
(b) Fraudulent practices refer to any act of omission or misrepresentation that misleads or attempts to mislead a party to obtain a financial or other benefit or to avoid an obligation. For example, stealing credit card information, forging the signature or manipulating a document falls under fraudulent practices.
(ii) The objectives of warehousing are:
- To protect all goods in warehouse against losses, and
- To provide prompt delivery of goods.
(iii) Following can be said about the utility of budgeting:
1. Provides Goals: A budget is a planning tool. It helps in fixing the goals in physical and financial terms. This helps the employees to understand their roles and responsibilities precisely, by which they can take decisions to attain the set objectives.
2. Co-ordinates Efforts: A budget helps to co-ordinate the efforts of various divisions and departments. It is possible to fix the divisional or departmental targets so that all divisions or departments may work harmoniously to achieve the set goals.
3. Provides Control Yardstick: A budget performs as a control tool by laying down performance goals. Performance of various managers, divisions and departments is evaluated, against the budget. This is done by finding out the difference between the budgets and actuals and analysing the results thereof.
(iv) The differences between Trial Balance and Balance Sheet is following:
| Trial Balance | Balance Sheet | |
| Objectives | Trial balance is prepared with an objective to check mathematical accuracy of ledger. | Objective of balance sheet preparation is to ascertain financial position of the business at a particular date. |
| Sides | It has debit and credit columns to show the amounts. | It has assets and liabilities sides. |
| Part of final accounts | Trial Balance is not a part of final accounts. | Balance Sheet is a part of final accounts. |
Question 3.
(i) What is Causa Proxima principle or Proximate Cause? [2]
(ii) Explain permanence order of Balance Sheet. [2]
(iii) Describe any three types of selection tests. [3]
(iv) Explain any three functions of a central bank. [3]
Answer:
(i) The principle of Causa Proxima says that the insured can recover the loss from insurer only if it is proximately caused by any of the perils (fire, storm, burglary, earthquake, injury, explosion etc.) insured against.
(ii) According to permanence order, in assets side, first of all intangible and fixed assets, such as goodwill, patent, building etc., are shown. After fixed assets, investments are shown and at the end, current assets, such as bank balance, cash in hand etc., are shown. Similarly in liabilities side, first of all, capital is shown and then long term liabilities, such as bank loan and at the end, current liabilities, such as bills payable, bank overdraft etc., are displayed.
(iii) Following are the three types of selection tests:
1. Intelligence Tests: These tests are used to measure a person’s capacity for reasoning and comprehension in terms of his memory, mental alertness, vocabulary, and grasping capacity. A candidate’s IQ or mental alertness can be estimated through intelligence tests.
2. Aptitude Tests: Aptitude means the potential which an individual has for learning the skills required to do a job efficiently. Aptitude tests measure an applicant’s capacity and his potential for development.
3. Proficiency Tests: Proficiency tests seek to measure the skill and abilities which the candidate already possesses at the time of testing. Trade tests or skill tests are examples of proficiency tests. They determine whether the claims made by the candidate about his skills and abilities are proved by his actual test performance.
(iv) Following are the three functions of a central bank:
1. Monopoly of Note-Issue: The Central Bank has the monopoly to issue currency notes. For issuing notes, the Central Bank keeps reserves of gold and silver and foreign securities in a minimum proportion to inspire confidence among the people in the paper currency.
2. Custodian of Foreign Currency: This is one of the most important functions of the central bank of a country. The reserves with central bank are utilized for making payments to foreign countries. The inflow and outflow of foreign exchange depends upon whether the position of balance of payments is favourable or otherwise.
3. Credit Control: This is the most important functions of the central bank. For the stabilized and smooth working of economy of the country, it is very essential to regulate the credit granting capacity of the entire banking system. This task is assigned to the central bank of the country.
Question 4.
(i) What are fixed assets? [2]
(ii) What do you understand by cash budget? [2]
(iii) Explain three differences between Recruitment and Selection. [3]
(iv) Describe any three types of insurance. [3]
Answer:
(i) Fixed assets are those assets which are of durable nature and which help the owner of the business for further production or operation of the business for a number of years. They are not intended for resale but are purchased for permanent use. These include plant, machinery, furniture, buildings, motor lorries, land, patent, leasehold land, etc. Fixed assets are also known as ‘Capital Assets’ or ‘Long-term Assets’.
(ii) Cash budget is an estimate of Cash Receipts and Payments during a particular period. It is very important to have sufficient cash in hand to run day to day operations. A business has to deal in cash as well as credit. So sometimes it pays money immediately and sometimes pays it after sometimes on purchase and other business expenses. Similarly, sometimes it receives cash immediately and sometimes after a time period from sales and debtors. So it is required to estimate the receipt and payments in advance to avoid liquidity crunch.
(iii) Following are the three differences between recruitment and selection:
| Points of Differences | Recruitment | Selection |
| Meaning | It refers to the searching of prospective employees and motivating them to apply for jobs. | It refers to the choosing the right candidates having necessary qualifications. |
| Nature | Recruitment is the Positive process. | Selection is the Negative process. |
| Aim | Its aim is to create a large pool of candidates. | Its aim is to eliminate all unsuitable candidates. |
(iv) Following are the three types of insurance:
1. Life Insurance: In life insurance contract, a person is insured against untimely death. The amount becomes payable on the death of the assured or on the expiry of a certain fixed period, whichever is earlier.
2. Health Insurance: In the recent years, the cost of quality healthcare has become very costly. So, to provide health cover to the general public, general insurance companies have started to provide health insurance which provides compensatory cover to insured against variety of diseases and ailments.
3. Fire Insurance: Fire insurance covers losses caused by fire. A fire insurance is an agreement between the two parties, i.e., insurer and insured, whereby the insurer undertakes to indemnify the loss suffered by the insured due to fire.
Question 5.
(i) What is Public Warehouse? [2]
(ii) Write about RTGS. [2]
(iii) What are the merits of external source of recruitment? [3]
(iv) Describe any three differences between Shares and Debentures. [3]
Answer:
(i) A public warehouse is one which provides storage facility to any member of the public in consideration of charges. Public warehouses are considered to be public utilities. They are organised to provide storage service and facilities to the retailers, wholesalers, stockists or even general public in return for a storage fee or charge.
(ii) RTGS stands for Real Time Gross Settlement. It is a fund transferring facility provided by the commercial banks to their customers. This facility involves continuous settlement of fund transfers individually on an order by order basis in the ‘Real Time’, means immediately without any time lapse. This facility is primarily meant for electronic transfer of large amounts.
(iii) Following are the merits of external sources of recruitment:
1. Wider Choice: Selection from external sources facilitates the choice of personnel from among a large number of applicants. The enterprise can carefully weigh the plus and minus points of all the candidates and then select the best.
2. Fresh Outlook: The enterprise greatly benefits from the freshness of outlook and approach of personnel chosen from external sources. This is because they are without any in-built preferences and prejudices so common in the case of personnel promoted or transferred to fill the vacancies internally.
3. Variety of Experiences: When an organization thinks of selecting external candidates, it ultimately improves the reservoir of diverse experiences which may prove helpful in solving such problems which the organization has not encountered so far.
(iv) Following are the three differences between shares and debentures:
| Basis of Difference | Shares | Debentures |
| Representation | Shares represent the capital of the company. | Debentures represent the debts of the company. |
| Status of Holder | Equity share holders are the owners of the company. | Debenture holders are creditors of the company. |
| Form of Return | Shareholders get the dividend. | Debenture holders get interest. |
Question 6.
(i) What is Preference Share? [2]
(ii) What are Outstanding expenses? [2]
(iii) Use the following Trial Balance to complete the Final Accounts of KGF Group for the year ending March 31, 2021. [6]
Answer:
(i) Preference shares are those shares which carry preferential rights over equity shares in the case of dividend and repayment of capital in the event of winding up of a company. But, the preferential share holder does not have voting rights.
(ii) The expenses which have been incurred during the year but have not been paid by the closing date are known as outstanding expenses. The examples are Telephone Bill, Municipal Corporation Tax, salaries due etc.
(iii) Trading Account
(i) Opening Stock – ₹ 2,00,000
(ii) Closing Stock – ₹ 4,00,000
(iii) Gross Profit – ₹ 8,20,000 Profit and Loss Account
(iv) Net Profit – ₹ 4,80,000 Balance Sheet
(v) Creditors – ₹ 1,00,000
(vi) Debtors – ₹ 6,00,000