Category: Important Questions

Students get through the TN Board 11th Commerce Important Questions Chapter 18 Business Ethics and Corporate Governance which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 18 Business Ethics and Corporate Governance

Very short answer questions

Question 1.
What is Social Responsibility?
Answer:
Social responsibility refers to the businessman’s decision and action taken for reasons at least partially beyond the firm’s direct economic or technical interest.

Question 2.
What is Business Ethics?
Answer:
Business Ethics refers to the moral principles or rules of behavior which should govern the moral conduct of businessmen.

Question 3.
Define corporate governance.
Answer:
“Corporate governance is about promoting fairness, transparency and accountability.” – World Bank.

Question 4.
Define MNC.
Answer:
MNC is defined to be an enterprise operating in several countries but managed from one country.

Question 5.
Write a short note on Benchmarking.
Answer:

1. Select a product, service, or process to benchmark.
2. Identify the key performance metrics.
3. Choose companies or internal areas to benchmark.
4. Collect data on performance and practices,
5. Analyze the data and identify opportunities for improvement.

Short answer questions

Question 1.
What is Corporate Social Responsibility?
Answer:
Corporate Social responsibility is a comprehensive set of policies. Practices and programs which are integrated into business operations supply claims and decision making process throughout the company wherever the company does business and includes responsibility for current actions as well as past and future actions.

Question 2.
Describe the obligations of business towards owners and shareholders.
Answer:
If a business satisfies its investors they are likely to invest more money in a project as a result, more funds will flow in and the same can be utilized to modernize, expand and diversify the existing activities on a larger scale happy financiers can fulfill the rising demand of funds needed for its growth and expansion.

1. They need to give a fair return to Shareholders.
2. They need to give true and fair information to shareholders.

They need to give them proper opportunities to shareholders.

Question 3.
Give any four reasons against the social responsibilities of business.
Answer:

1. Violation of profit maximization: As per this argument business enterprises claim that our objective is profit maximization business can reduce its cost and raise profits and only they can meet their social responsibility.
2. Lack of Social skills: Business enterprises neither have still nor experience to solve all types of social problems. Therefore it should be handled by specialized agencies.
3. The burden on consumers: Many of the social responsibilities cost a lot its burden falls on consumers only.
4. Lack of broad public support: Businesses cannot operate successfully because of a lack of co-operation and confidence from the public in business enterprises.

Long answer questions

Question 1.
Explain Benchmarking in various parts of the world.
Answer:
Japan: In early 2014, the Japanese Prime Minister announced the goal of increasing the percentage of women in executive positions at Japanese companies to 30% by 2020.
The UK: UK businesses had voluntary targets first set in 2011 i.e. to have 25% women on FTSE100 (The Financial Times Stock Exchange) Boards by 2015.
Canada: At the Federal level, two bills are currently being tabled which will impose a40% quota for female Board members of public companies and other regulated entities such as banks and insurance companies.
Brazil: A bill pending in the Brazilian Senate would impose a 40% female quota on the Boards of state-owned enterprises by 2022. IBGC Code of Best Practices (Brazilian Institute of Corporate Governance) recommends:

1. A formal evaluation process of the performance of the Board, of individual directors, and of the CEO.
2. The process to be conducted by the Chair.
3. Participation of the outsider to make the process more effective.
4. Evaluation system adapted to each organization.
5. Disclosure of the process of evaluation, to the shareholders.

Question 2.
Write a short note on MNC.
Answer:
Any company is referred to as a Multinational company or corporation (MNC) when that company manages its operation or production or service delivery from more than a single country. It has its headquarter based in one country with several other operating branches in different other countries. The country where the headquarter is located is called the home country whereas; the other countries with operational branches are called the host countries. Apart from playing an important role in globalization and international relations, these multinational companies even have a notable influence on a country’s economy as well as the world economy. The budget of some of the MNCs is so high that at times they even exceed the GDP (Gross Domestic Product) of a nation.

For Own Thinking

Question 1.
Illustrate the ethical practices followed by different reputed organizations .giving practical examples.
Answer:
Physicians: The American medical association also imposes a code of ethics on physicians. This code of ethics addresses everything from impersonal relationships with other staff members such as nurses’ information on patient care.

Question 2.
Create case studies concerning the existing famous organization following ethical practices quoting their real-life practice.
Answer:

1. Use real-life examples. If you are free to choose a topic on your own try to take it from real life. However, avoid real names.
2. Finish every part of your study with points for discussion. They will engage your reader and help him orient in the study.

Question 3.
Identifying ethical codes based on which organization exits, for the long run and short run, justifying the adherence to code of ethics.
Answer:
Two of the 22 identified excerpts involved individuals referring to ethical guidelines that are clear and penalties potentially serious. Responses falling under this theme tend to refer to guidelines when they believe a clear concrete rule is available and when consequences may be substantial and costly.

For Future teaming

Question 1.
Money earning cannot be the sole objective of business or life.
Answer:
Yes, because reputation is very important, but the primary objective is to earn profit.
Even though businesses run on commercial lines. Service is the main objective of business while running the business money is important at the same service to the society and public is very important.

Question 2.
The mind of students to accept that ethics and consideration for the environment, law, etc can lengthen the income-earning of an individual or business.
Answer:
As you might imagine environmental legislation is a broad topic. Mainly because the natural environment encompasses. So many different aspects. So environmental laws need to consider everything from the air we breathe to the natural resources we rely on to the plants and animals that share this world with us.

Multiple choice questions

1. The U S A formulation of various committees:
(a) 4
(b) 2
(c) 3
(d) 1
Answer:
(a) 4

2. The UK corporate Governance code recommends evaluation of the Board of FTSE ………….. companies.
(a) 450
(b) 325
(c) 385
(d) 350
Answer:
(d) 350

3. UK Business had voluntary targets first set in:
(a) 2013
(b) 2011
(c) 2012
(d) 2010
Answer:
(b) 2011

4. MNC is defined to be an enterprise operating in several countries but managed from ……….. country.
(a) 2
(b) 3
(c) 1
(d) 5
Answer:
(c) 1

5. Good Corporate Governance enables corporate success and …………… development.
(a) economic
(b) commerce
(c) mathematics
(d) social
Answer:
(a) economic

6. Corporate Governance eliminates by:
(a) capital
(b) investment
(c) loan and advance
(d) risks and mismanagement
Answer:
(d) risks and mismanagement

7. Types of key elements of business ethics:
(a) 1
(b) 3
(c) 5
(d) 6
Answer:
(c) 5

8. Which of the following can explain the need for pollution control?
(a) Cost savings
(b) Reduced risk of liability
(c) Reduction of health hazards
(d) All of them
Answer:
(c) Reduction of health hazards

9. Ethics is related to:
(a) medical
(b) law
(c) business
(d) all of the above
Answer:
(d) all of the above

Students get through the TN Board 11th Commerce Important Questions Chapter 17 Social Responsibility of Business and Business Ethics which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 17 Social Responsibility of Business and Business Ethics

Very short answer questions

Question 1.
What is the relation between ethics and moral values?
Answer:
Ethics refer to the entire body of moral values which society attaches to the actions of human beings.

Question 2.
What do you mean by the principles derived from social values which guide and conduct of businessmen?
Answer:
Business ethics are principles derived from social values which guide and govern the conduct of businessmen.

Question 3.
Mention two responsibilities of business towards customers.
Answer:
Supply or right quality of goods and proper precaution against adulteration.

Question 4.
Give any two reasons supporting social responsibilities.
Answer:

1. It is in the long-term interest of the business.
2. It is justified for the growth and existence of the business.

Question 5.
Define pollution.
Answer:
Pollution is a change in the physical, chemical, and biological characteristics of our land and water.

Question 6.
Give any one point of difference between ethics and law.
Answer:
Ethics are self-imposed while laws are imposed by an external governing authority.

Question 7.
Do businessmen have the skill to tackle social problems?
Answer:
Yes, businessmen have the skill to tackle some but not all social problems.

Short answer questions

Question 1.
What is a code of ethics?
Answer:
An enterprise must clearly define the – ethical code of conduct to be followed in the organization. The code should include quality standards for work law governing production and employees’ health and safety standards.

Question 2.
Define social responsibility.
Answer:
According to Peter F. Drucker, “Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength, and harmony”.

Question 3.
Mention the kinds of social responsibility.
Answer:

1. Economic responsibility.
2. Legal responsibility.
3. Ethical responsibility.
4. Discretionary responsibility.

Question 4.
Explain responsibility towards supplies.
Answer:

1. Giving regular orders for the purchase of goods.
2. Dealing on fair terms and conditions.
3. Availing reasonable credit period.
4. Timely payment of dues.

Question 5.
Examples of corporate social responsibility in India.
Answer:

1. Tata Group
2. Mahindra and Mahindra,

Question 6.
Explain responsibility towards investors.
Answer:

1. Ensuring the safety of their investment.
2. Regular payment of interest.
3. Timely payment of the principal amount.

Question 7.
Difference between ethics and law.
Answer:

Ethics	Law
Business ethics refer to the socially deter­mined moral principles which should govern business activities.	Laws are determined by the legal bodies of a country.

Long answer questions

Question 1.
Write any four reasons against the social responsibilities of business.
Answer:
These are responsibilities that society has towards everyone they are not the responsibilities of individuals but ones we share as a society.

1. Reason: Violation of profit maximization as per this argument business enterprises claim that our objective is profit maximization business can reduce its cost and raise profit and them only it can meet its social responsibility.
2. Lack of social skills: Business enterprises neither have still nor experience to solve 1 all types of social problems. Therefore it j should be handled by specialized agencies.
3. The burden on consumers: Many of the social responsibilities cost a lot its burden falls on consumers only.
4. Lack of broad public support: Businesses cannot operate successfully because of a lack of co-operation and confidence from the public to business enterprises.

Question 2.
Explain the various elements of business ethics?
Answer:
Business ethics should be followed in the day-to-day working of a business enterprise the following are some of the elements of business ethics.

1. Commitment by top management: Top-level officers such as the CEO’s other higher level managers must sincerely follow the ethical code of conduct, they should also guide other employees in their organizations in adopting the code.
2. Publication of code: An enterprise must clearly define the ethical code of conduct to be followed in the organization. The code should include quality standards. For work, laws, governing production and employees health and safety standards.
3. Establishment of compliance mechanism:
   In addition to setting performance standards, an enterprise must also devise a mechanism through which it can measure the actions of individual employees. These should be done in order to confirm whether the ethical standards are being met.
4. Involvement of employees at all levels:
   The successful implementation of ethical standards depends to a large extent on the involvement of employees at different levels, this is because it is employees who actually implement the ethical job.

For Own Thinking

Question 1.
To identify ethical and unethical practices of business enterprises.
Answer:
(a) Ethical:

1. Investors: Ensuring the safety of their money and timely payment of interest.
2. Employers: Provision of fair opportunities in promotions and training, good working environment, and timely payment of salaries.
3. Customers: Complete information on the service and product should be made available. Personal information of the customers. Should not be used for personal gain.

(b) Unethical:

1. Resorting to dishonesty, trickery, or deception.
2. Distortion of facts to mislead or confuse.
3. People emotionally by exploiting their vulnerabilities.
4. Greed to a mass excessive profit.

Question 2.
To understand the level of discharging Socially Responsibility practices of business units.
Answer:
Business is an economic activity. It is argued by the opponents of social responsibility that the basic function of a business enterprise is to look into the economic viability of its operations. It is the government to look after the interests of the society. The prime responsibility of assuming social responsibility should therefore be of the government and not of the business enterprises.

Question 3.
To analysis the impact of Social Responsibility Of Small, Medium, and Large scale enterprises in Society.
Answer:

1. Respect for the employer’s rights.
2. Ensuring operational safety and security at the workplace.
3. Occupational health.
4. Good governance and good practices.
5. Compliance with the laws.

Question 4.
To clearly distinguish the benefits derived by different stakeholders while* discharging of Social Responsibility of business units.
Answer:
CSR should not be taken to include steps taken as a result of legal obligations to prevent or mitigate harm. In that regard, a growing number of theorists are now suggesting that companies have a fundamental existential obligation to adequately plan for and manage sustainability issues in order to avoid breaches of director’s duties as a result of a failure to mitigate risk in this area.

For Future learning

Question 1.
To evaluate the impact of social responsibility on the profitability of the business unit.
Answer:
There is an impressive history associated with the evolution of the concept and definition of corporate social responsibility. In this article, the author traces the evolution to the CSR construct beginning in the 1950s which marks the modem area of CSR.

Question 2.
To predict methods by which social responsibility can be discharged.
Answer:
We use data from different sources to analyze whether actual environmental outcomes such as emissions and environmental fines can be explained by lagged environmental ratings.

Question 3.
To depict through pictures, the stakeholder’s position in a company taking socially responsible activities.
Answer:
In order to completely understand the context of corporate social responsibility, you must first understand the role of stakeholders for an organization. The next section will describe the role of stakeholders. Two types of primary stakeholders and secondary stakeholders.

Multiple choice questions

1. Social responsibility is:
(a) same as a legal responsibility
(b) broader than legal responsibility
(c) narrower than legal responsibility
(d) None of them
Answer:
(b) broader than legal responsibility

2. If the business is to operate in a society that is full of diverse and complicated problems it may have:
(a) little chance of success
(b) great chance of success
(c) little chance of failure
(d) no relation with success or failure
Answer:
(a) little chance of success

3. Business people have the skills to solve:
(a) all social problems
(b) some social problems
(c) no social problems
(d) all economic problems
Answer:
(b) some social problems

4. That an enterprise must behave as a good citizen is an example of its responsibility towards:
(a) owners
(b) workers
(c) consumer
(d) community
Answer:
(d) community

5. Carbon monoxide emitted by automobile directly contributes to:
(a) water pollution
(b) noise pollution
(c) land pollution
(d) air pollution
Answer:
(d) air pollution

6. Which of the following can explain the need for pollution control?
(a) Cost savings
(b) Reduced risk of liability
(c) Reduction of health hazards
(d) All of them
Answer:
(c) Reduction of health hazards

7. Which of the following is capable of doing maximum good to society?
(a) Business success
(b) Ethics
(c) Laws and regulations
(d) Professional management
Answer:
(b) Ethics

8. Which of the following alone can ensure effective ethics program in a business enterprise?
(a) Publication of code
(b) Involvement of employee
(c) Establishment of compliance mechanisms.
(d) None of them
Answer:
(c) Establishment of compliance mechanisms.

Students get through the TN Board 11th Commerce Important Questions Chapter 16 Emerging Service Business in India which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 16 Emerging Service Business in India

Very short answer questions

Question 1.
Define Franchising.
Answer:
One of the key components of the success of any business lies in its ability to reach out to customers at the local, national, and global levels. Franchising has often been used as a method for expanding domestic markets and for entering international markets.

Question 2.
What is a Reduction in investment?
Answer:
Companies through outsourcing avail the services of outsiders which in turn reduces the investment requirements. The amount so available can be utilized productively and this increases the profits.

Question 3.
What are the core and noncore activities?
Answer:
Companies can benefit in the long run provided they are keen on their core activities rather than noncore, activities. A core activity involves experience, expertise, efficiency, and even investment in the field of specialization. Noncore activities can be outsourced to outsiders who are specialists in their area of operation.

Question 4.
What is B2B?
Answer:
Business to Business (B2B): Under the model, business concerns transact with one another through the internet. For instance, Snapdeal, Flipkart, Alibaba, Indiamart, Trade India. Com etc.

Question 5.
What is C2B?
Answer:
This model is reverse to auction model. Products like automobiles, electronic items furniture, and similar product are traded by customers through websites, eg: Naukri.com and Monster.com are examples of Indian companies operating in this domain.

Question 6.
Examples of factoring companies.
Answer:
(i) Canbank Factors limited.
http:// www.canbankfactors.com
(ii) SBI Global.
http:// www.sbiglobal.in
(iii) IFCI Factors Limited, http:// www.ifcifacors.com

Question 7.
What is forfeiting?
Answer:
Forfeiting is defined as “the non-recourse purchase by a bank or any other financial institution of resembles arising from export of goods and services.

Question 8.
What do you mean by BPO?
Answer:
BPO means getting contractual services of external companies or a group of companies to complete the special work or process of a company, eg: Gall center, Data entry.

Question 9.
What do you mean by KPO?
Answer:
KPO refers to the outsourcing of knowledge-based processes. It means obtaining end knowledge work from outside the organization in order to run the business successfully and in a cost-effective manner.

Question 10.
Mention the types of factoring?
Answer:

1. Full-service factoring.
2. With resource factoring.
3. Maturity factoring,
4. International factoring.

Short answer questions

Question 1.
Give any five top 10 franchises in India.
Answer:

Name of Franchise	Country of Origin	Number of Years of Franchising in India	Industry
Subway	USA	16	Food and Beverage
Aloha India	Malaysia	15	Education and Training
Baskin – Robbins	USA	24	Food and Beverage
Kidzee	India	14	Children’s
US Dollar Store	India	13	Retail
McDonald’s	USA	21 :	Foods and Beverage

Question 2.
Difference between factoring & forfeiting?
Answer:

Factor	Forfeiting
Financing is dependent on the exporter’s credit standing.	Financing is dependent on the availing bank’s financial standing.
Cost is borne by the seller.	Cost is borne by the overseas buyer.
For transactions of short-term maturity period.	For transactions of medium-term maturity period.
Only a certain percent of receivables factored is advanced.	Full finance is available.
Risk can be transferred to the seller.	All risks are borne by the forfeiter.

Question 3.
What is the impact of e-commerce on vendors?
Answer:

1. Vendors could have wider access to customers across the globe.
2. This helps minimize the cost of operating business due to the direct distribution of goods to end consumers thanks to the minimum invention of intermediaries.
3. The vendor could interact with multiple buyers and sellers.
4. Business concerns could orient marketing efforts towards targeted customers.

Long answer questions

Question 1.
Explain the terms (i) Franchisee, (ii) Franchisor, (Hi) Factoring, (iv) Forfeiting.
Answer:

1. Franchisee: The individual who acquires the right to operate the business or use the trademark of the seller is known as the franchisee.
2. The franchisor: The owner of a business that provides the franchise. Generally, he owns the patent/trademark and offers it to the franchisee under a licensing agreement. Depending on the agreement, the franchisor may also provide support services like service/product training, marketing,
   advertising, etc. The franchisor levies fees in the form of royalty.
3. Factoring: In a report submitted to the Reserve Bank of India, Mr. C.S. Kalyanasundaram defines factoring as “a continuing arrangement under which a financing institution assumes the credit and collection functions for its clients, purchases receivables as they arise (with or without recourse for credit losses, i.e., the customer’s financial inability to pay), maintains the sales ledgers, attends to other book-keeping duties relating to such accounts, and performs other auxiliary duties”.
4. Forfeiting: The non-recourse purchase by a bank or any other financial institution of receivables arising from the export of goods and services.

Question 2.
What are the general impacts of E-commerce?
Answer:
About 40 million people in India is said to be employed in the e-commerce sector either directly or indirectly.

1. E-commerce generates great opportunities for entrepreneurship in the sphere of online retailing, online service digital commerce, and so on.
2. E-commerce companies have invested heavily in supply chain areas, warehousing, and delivery points.
3. With a rise in e-commerce transactions sale of financial, physical, and data security system-related products has seen tremendous growth in India.
4. E-commerce promotes innovative practices of carrying on a business. Social media and social media networks have opened new ways of transacting with customers through e-commerce.
5. Thanks to wider broadband connectivity many business concerns are switching over to the e-commerce mode of transacting business.

For Own Thinking

1. You are a small-scale manufacturer of ignition coils for automobiles, located near Ranipet. Explain how will you avail of financial credits through factoring if you get orders from
a. Ford India, Chennai
b. Maruti Suzuki, Gurgaon
c. Kun Hyundai, Seoul.
Mainly used in advertising industry, construction, household appliances industry, electrical industry, furniture industry, and transportation.

For Future teaming

Question 1.
Identify methods of moving goods.
Answer:
In contrast to pull and push methods. The push method is a system that is used in traditional production when work or output finished it is pushed to the station. While pull method is pulling output from the proceeding station as needed.

Question 2.
Draft ways and means of overcoming the problems in Logistics.
Answer:
International organizations have a key role to play in meeting this challenge, including by rapidly but accurately assessing the extent of available host nation support in order to plan for the delivery of the necessary additional logistic support from other sources.

Question 3.
Project the future of Logistics Management in India.
Answer:
Logistics management functions that are a part of ERP systems are usually integrated with other business functions in the system. Like sales finance procurement and human resources. More specialized and warehouse management.

Multiple choice questions

1. E-Business and E-Commerce are:
(a) synonyms
(b) antonyms
(c) former is wider than latter
(d) extroverted
Answer:
(c) former is wider than latter

2. When was electronic data interchange (EDI) Standardised?
(a) 1984
(b) 1995
(c) 2000
(d) 1999
Answer:
(a) 1984

3. In B2B, B2C, C2C, etc B and C stand for:
(a) business and corporate
(b) biding and customer
(c) business and customer
(d) business and consumer
Answer:
(d) business and consumer

4. When parties involved in the electronic transactions are from within a given business firm it is called?
(a) B2B commerce
(b) Intra B commerce
(c) C2C commerce
(d) B2C commerce
Answer:
(b) Intra B commerce

5. When a firm transacts with its employees it is referred to as:
(a) B2B commerce
(b) B2E commerce
(c) C2C commerce
(d) B2C commerce
Answer:
(b) B2E commerce

6. Work from home using the internet is covered under:
(a) online networking
(b) virtual private network
(c) electronic data exchange
(d) PayPal
Answer:
(b) virtual private network

7. Which of the following is a benefit of e-business?
(a) Less Risky
(b) Less Technological Requirements
(c) Convenience
(d) All of the above
Answer:
(c) Convenience

8. Which of the following is not an application of e-business?
(a) E-Procurement
(b) E – bidding
(c) E – delivery
(d) All of the above
Answer:
(d) All of the above

9. Which of the following can be used only for e-business?
(a) Cheques
(b) Credit card
(c) Debit card
(d) E-Cash
Answer:
(d) E-Cash

10. About 95% of online consumer transactions are executed through:
(a) cheques
(b) credit card
(c) debit card
(d) e-cash
Answer:
(b) credit card

11. When a customer claims that he has made the payment but the seller does not get it, it is called?
(a) Default on delivery
(b) Default on order taking
(c) Bad debts
(d) Default on payment
Answer:
(d) Default on payment

12. Which of the following is used to handle data storage risk?
(a) VIRUS
(b) Hacking
(c) Cryptography
(d) All of the above
Answer:
(c) Cryptography

13. ……….. is the largest captive BPO unit in India for providing certain kinds of services to the parent company in the united states as well as to its subsidiaries in other countries.
(a) Infosys
(b) General Electric (GE)
(c) Accenture
(d) None of these
Answer:
(b) General Electric (GE)

14. BPO ……… cost and ………. excellence
(a) reduces, reduces
(b) increases, increases
(c) reduces, increases
(d) increases reduces
Answer:
(c) reduces, increases

15. In India ……. and ……… are referred to as emerging modes of business
(a) e- business and e-commerce
(b) outsourcing and e-commerce
(c) outsourcing and e-business
(d) online trading and networking
Answer:
(b) outsourcing and e-commerce

16. E-commerce does not include:
(a) business interactions with its suppliers
(b) business interactions with its customers
(c) interactions among the various departments within the business
(d) interactions among the geographically dispersed units of the business
Answer:
(c) interactions among the various departments within the business

17. A call center handles.
(a) only inbound voice-based business
(b) only outbound voice-based business
(c) both voice-based and non-voice based business
(d) both customer-facing and back-end business
Answer:
(d) both customer-facing and back-end business

18. It is not an application of E-business:
(a) online bidding
(b) online procurement
(c) online trading
(d) contract R and D
Answer:
(d) contract R and D

Students get through the TN Board 11th Commerce Important Questions Chapter 15 Insurance which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 15 Insurance

Very short answer questions

Question 1.
Write short notes on Surrender value?
Answer:
The surrender value is the cash value of the policy which is payable to the policyholder if he decides to terminate the contract. This surrender value is usually obtained from the paid-up value by applying a percentage factor. The surrender value signifies the number of premiums paid that is returned to the policyholder at the time of surrendering the policy.

Question 2.
Write short notes on Double insurance?
Answer:
When more than one insurance policy is taken to cover the same subject matter i.e. risk, then it is known as Double Insurance.

Question 3.
What do you mean by Indemnity?
Answer:
Indemnity means security or compensation against loss or damages. In insurance, the insured would be compensated with the amount equivalent to the actual loss.

Question 4.
What are the features of Life insurance?
Answer:

1. Life insurance provides protection to the family at the premature death of an individual.
2. It gives an adequate amount at an old age when earning capacities are reduced.
3. Life insurance is not only a protection but is a sort of investment because a certain sum is returnable to the assured at the time of death or at the expiry of a certain period.

Short answer questions

Question 1.
What are the types of Insurance?
Answer:
Insurance covers different types of risks. All contracts of insurance can be broadly classified as follows:

1. Life Insurance (or) Life Assurance,
2. Non-life Insurance (or) General Insurance.

It can be further classified into:

1. Fire Insurance,
2. Marine Insurance,
3. Health Insurance and
4. Miscellaneous Insurance.

Question 2.
What is contribution?
Answer:
The same subject matter may be insured with more than one insurer then it is known as ‘Double Insurance’. In such a case, the insurance claim to be paid to the insured must be shared on contributed by all insurers in proportion to the sum assured by each one of them. It may be noted that in the case of multiple insurances, the insured can claim the loss from any of the insurers subject to the condition that the insured cannot recover more than the amount of actual loss from all taken together.

Question 3.
What is the meaning of insurance?
Answer:
Insurance is a contract between the insurer and the insured under which the insurer undertakes to compensate the insured for the loss arising from the risk insured against, in consideration the insured agrees to pay premium regularly.

Question 4.
Explain the types of marine insurance?
Answer:

1. Hull or Ship Insurance: When a ship is insured against any type of danger, it is known as hull insurance. This policy is taken to indemnify the insured for losses caused by damage to the ship.
2. Cargo Insurance: When a marine insurance policy is taken by the cargo owner to be compensated for loss caused to his cargo during the Voyage, it is known as cargo insurance. The cargo to be transported by ship is subject to many risks, as the risk of theft, loss of goods in the voyage, etc.
3. Freight Insurance: When a marine insurance policy is taken to guard against non-recovery of freight, it is known as freight insurance. The shipping company is mainly interested in freight, which it – gets either in advance or on the arrival of goods. However, it will not get the freight, if the goods are lost during transit. So, to ensure the freight, it takes freight insurance. A contract of marine insurance covers the ship, cargo, and freight.

Question 5.
Explain the types of business risk?
Answer:

1. Speculative Risks: Speculative risks are the kind of risks that have the possibility of gain as well as the possibility of loss. Such risks are the result of market conditions. Favorable market conditions result in gains whereas unfavorable market conditions result in losses, eg: Use of better technology helps to produce better quality products at cheaper prices. This may increase the demand and thus result in higher profits.
2. Pure Risks: Pure risks are the type of risks where a business suffers loss only if the risk occurs. Non-occurrence of such risks leads to the absence of loss, eg: Business may suffer loss only if fire, theft or strike occurs.
3. Insurable Risks: Insurable risks are the type of risks where a business can insure the probable losses by paying a predetermined premium to an insurance company. At the time of loss, the insurance company pays compensation on the basis of agreed terms and conditions. Loss arising from natural and physical risks can be insured as the probability of risk can be determined, eg: a Company can insure its stock against fire or theft and if it loses its stock due to fire or theft in office, the insurance company pays compensation only up to an extent of the value lost.
4. Uninsurable Risk: Losses arising from unforeseen natural events, political changes, or trade cycles are called uninsurable risks. Loss due to earthquake or flood or cyclone cannot be estimated and their probability cannot be calculated. Government directly takes care of the affected persons. Losses to businesses due to policy decisions of ruling political parties in a country, or due to economic depression cannot be insured. These uninsurable risk events are called uncertainties. The concept of risk is different from uncertainty. During uncertain events, decisions cannot be taken.

Question 6.
What is the need for Insurance?
Answer:
Business involves many risks. Goods are damaged or destroyed while they are in transit or in godowns. This loss is reduced largely by insuring the goods. A family generally depends on the income earned by the head of the family, who is a daily wage earner (breadwinner). If he suddenly dies, the family may be left in a very difficult situation. Insurance substitutes this uncertainty by providing financial compensation.

Question 7.
What is life insurance and mention its features?
Answer:
Life insurance contract may be defined as the contract, whereby the insurer in consideration of a premium undertakes to pay a certain sum of money either on the death of the insured or on the expiry of a fixed period which Never is earlier. Since the value of life cannot estimate in terms of money, the principle of indemnity is not involved in life insurance. A person can take any number of policies in his own life.

Question 8.
Write short note on marine insurance.
Answer:
Marine insurance is the most important and challenging branch of insurance. It has developed over many countries. Under this, the insurer undertakes to indemnify the insured against marine losses. The principles of utmost good faith, indemnity, insurable interest and proximate cause, will apply to marine insurance. But insurable interest is present at the time of loss of the insured property.

Question 9.
What is fire insurance and bring its importance?
Answer:
A fire insurance contract does not ensure the safety of the insured property. Its purpose is to see that the insured does not suffer pecuniary loss from the insured property due to fire. If the insured property is transferred to another person, the contract of insurance comes to an end. It is not connected with the subject matter of insurance. Thus fire insurance is a mere personal contract between the insurer and the insured. If the loss is due to ‘fire’ within the meaning of the policy, it is immaterial about the cause of the policy and the insurer is liable to indemnify the insured.

Question 10.
What is Economic causes?
Answer:
These include uncertainties relating to demand for goods, competition, price, collection of dues from customers, change of technology or method of production, etc. Financial problems like rising in interest rate for borrowing, levy of higher taxes, etc., also come under this type of cause as they result in the higher unexpected cost of operation of the business.

Long answer questions

Question 1.
Distinguish between Insurance and Assurance.
Answer:

Insurance	Assurance
Loss due to risk is not certain to happen which may or may not take place.	Each person has to die sooner or later. So loss due to the risk of death is certain.
This is a contract for a short period (one year).	But it is a long-term contract (for 15 years or more).
The value of the subject matter can be easily determined.	It is difficult to determine the value of human life which is the subject matter of contract.
It is the contract of indemnity.	It is not a contract of indemnity.
When the insurer compensates for the loss suffered by a person, he acquires the rights and remedies available to that person.	This does not apply here.

Question 2.
What are the principles of insurance?
Answer:
There are special principles applicable to contracts of insurance. They are:

1. Insurable Interest: Insurable interest is necessary for a valid contract of insurance. Insurable interest must be a pecuniary interest. A person is said to have an insurable interest in a property, as to have benefited from its existence and prejudice by its destruction. The time when insurable interest should exist differs according to the nature of insurance.
2. Utmost good faith: A contract of insurance is a contract of utmost good faith. The proposer is bound to make frill disclosure of all facts. Misrepresentation, non-disclosure of fraudulent misrepresentation in any document leads to disowning the insurer from all liabilities under the contract.
3. Indemnity: ‘To indemnity means ‘to make good the actual loss suffered. The principle of indemnity is applicable to property insurance alone. Insurance contracts are contracts of indemnity. This means that the insured should be placed after a loss, in the same position as he was immediately before the loss.
4. Proximate cause: Proximate means nearest. It is only the nearest reason to be taken into account. The insurer is liable only if the nearest cause comes within the meaning of risk insured.
5. Contribution: Where a property is overinsured by double insurance, each insurer is bound as between himself and other insurers, to contribute in proportion to the amount for which he is liable under his contract with the insured.
6. Subrogation: Subrogation means the transfer of rights and remedies of the insured to the insurer after the indemnity has been effected. According to this principle, after the insured is compensated for the loss, the right of ownership of such damaged part of the property passes to the insurer.

Question 3.
What are the kinds of life policies?
Answer:
The life insurance policies can be divided on the basis of

1. Duration of Policy: (a) Whole Life Policy, (b) Term policy.
2. Method of payment of premium.
3. Policies according to participation in profits (a) with profit policies and (b) without profit policies.
4. Policies according to the number of persons insured in a policy, the policy may be:
   (a) Single life policy, (b) Multiple life Policy, (c) Joint life Policy, (d) Last Survivorship policy.
5. Policies according to the method of payment of claims- (a) Lump-sum policies,
   (b) Installment or Annuity Policies.

There are other life insurance policies which are as follows:

1. Money-Back policy
2. Children’s Deferred Assurance (C.D.A)
3. Group insurance policy
   (a) Employer-Employee groups
   (b) Labour – Union Group
   (c) Creditor – Debtor Group.

Question 4.
What is the classification of marine policies?
Answer:
Marine Policies are of different types. On the basis of the subject matter marine policies are classified into-

1. Cargo Insurance,
2. Hull Insurance,
3. Freight Insurance,
4. Liability Insurance.

On the basis of duration, policies may be classified into

1. Time Policies,
2. Voyage Policy.

On the basis of duration, term policies are classified into

1. Construction or builders risk policies,
2. Port Risks Policies,
3. Floating Policies,
4. Open cover policies.

Question 5.
Explain the types of fire policies.
Answer:

1. Floating Policy: It is a policy covering stock in different places within the limits of one city/town/village by charging 25% of premium over and above the highest rate applicable to anyone at risk. The goods should belong to a single owner. No floating policy can be issued in respect of the immovable property.
2. Declaration Policy: Declaration policies may be granted only in respect of the own stocks of the insured or which are in the insurer’s custody. Generally, levels of stock will vary frequently depending on purchases and sales. The owner takes a policy for a maximum expected level and a premium is paid. Every month the owner. declares the level of stock. In the end, the premium is adjusted accordingly.
3. Reinstatement Policy: This policy is also known as a new or old policy. This policy is issued in respect of building, plant, and machinery, furniture and fixtures, and fittings only. The payment to be made is the cost of reinstatement of the building or the cost of replacement of the machinery to a condition equal to prior to the loss.

Student Activity.

(a) Sanjana insured her factory for Rs. 5 Lakh against fire. Due to fire, she suffered a loss of Rs. 2 lakh. How much amount she can recover from the insurance company? Why?
Answer:

1. Sanjana insured her factory value worth Rs. 5 lakhs against fire.
2. She suffered a loss of Rs. 2 lakhs. She can get Rs. 2,00,000 only from the insurance company.
3. If the loss due to fire exceeds Rs. 5,00,000 she cannot get an actual loss on compensation (subject to average clause). She will get only Rs. 2,00,000.

(b) A factory owner gets his stock of goods insured, but he hides the fact the electricity board has issued him a statutory warning letter to get his factory’s wiring changed. Later on, the factory catches fire due to a short circuit of wiring. Can he claim compensation?
Answer:
No, he cannot claim compensation. Because already electricity board has issued him a statutory warning letter to get his factory’s wiring changed. Due to inadequate wiring, the factory catches fire so he cannot get compensation.

Multiple choice questions

1. ……… is not a contract of indemnity.
(a) Insurance
(b) Assurance
(c) Banking
(d) All the above
Answer:
(b) Assurance

2. ……….. is necessary for a valid contract of insurance.
(a) Insurable interest
(b) Indemnity
(c) Contribution
(d) utmost good faith
Answer:
(a) Insurable interest

3. In which year crop insurance scheme was introduced in India?
(a) 1948-49
(b) 1978-79
(c) 1985-86
(d) 1990-91
Answer:
(c) 1985-86

4. ……… is no limit in law.
(a) Life Insurance
(b) Fire Insurance
(c) Marine Insurance
(d) Burglary Insurance
Answer:
(a) Life Insurance

5. Policy is only for a period up ………. months
(a) 8 months
(b) 9 months
(c) 12 months
(d) 10 months
Answer:
(c) 12 months

6. The transfer of rights and remedies of the insured to the insurer means:
(a) proximate cause
(b) contribution
(c) utmost good faith
(d) subrogation
Answer:
(d) subrogation

7. The policy that covers the risk only during a particular period is known as:
(a) whole life policy
(b) term policy
(c) single life policy
(d) lump-sum policy
Answer:
(b) term policy

8. The policy which includes liability arising out of damages etc to the harbor is known as:
(a) hull insurance
(b) cargo insurance
(c) voyage policy
(d) liability insurance
Answer:
(d) liability insurance

9. A master policy taken out by any trade union for the benefit of its members is known as:
(a) creditor-debtor group
(b) group insurance policy
(c) labor union group
(d) joint life policy
Answer:
(c) labour union group

10. In mediclaim policy according to scheme a maximum benefit amount is:
(a) 10000
(b) 150000
(c) 100000
(d) 300000
Answer:
(b) 150000

11. In which year Children’s money-back plan was introduced?
(a) 1986
(b) 1988
(c) 1989
(d) 1995
Answer:
(d) 1995

12. In which year Insurance Act was amended in India?
(a) 1940
(b) 1928
(c) 1938
(d) 1945
Answer:
(c) 1938

13. Which one is the principle of insurance?
(a) Co-operation
(b) Mutual interest
(c) Indemnity
(d) None of these
Answer:
(a) Co-operation

14. What is the minimum period of life assurance?
(a) More than one year
(b) 5 year
(c) 10 years
(d) 15 years or more
Answer:
(d) 15 years or more

15. Which of the following is covered under life assurance policy?
(a) Act only
(b) Cargo insurance
(c) Declaration policy
(d) Money back policy
Answer:
(d) Money back policy

16. Which of the following is not a function of insurance?
(a) Risk sharing
(b) Assist in capital formation
(c) Lending of funds
(d) None of the above
Answer:
(c) Lending of funds

17. Which of the following is not applicable in life insurance contract?
(a) Conditional contract
(b) Unilateral contract
(c) Indemnity contract
(d) None of the above
Answer:
(c) Indemnity contract

18. In which of the insurance policy loss cannot be measured?
(a) Life insurance
(b) Marine insurance
(c) Fire insurance
(d) All of the above
Answer:
(a) Life insurance

19. It is the duty of the insured to make an effort for minimization of loss it is the principle of:
(a) utmost good faith
(b) contribution
(c) mitigation
(d) insurable interest
Answer:
(c) mitigation

20. Insurers must have some pecuniary interest in the subject matter of interest. It is the principle of:
(a) mitigation
(b) contribution
(c) utmost good faith
(d) insurable interest
Answer:
(d) insurable interest

Students get through the TN Board 11th Commerce Important Questions Chapter 14 Transportation which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 14 Transportation

Very short answer questions

Question 1.
What do you mean by land transport?
Answer:
Transport of people and goods by land vehicles is known as Surface transport. It is also called ‘Land Transport’.

Question 2.
What are the types of transport?
Answer:

Question 3.
What are tramways?
Answer:
Tramways were initially horse-drawn later steam-powered and now electrically operated. Its carrying capacity is large. They are able to cope up with the peak hour traffic in big cities.

Question 4.
What are Inland waterways?
Answer:
Inland Waterways comprise rivers, canals, and lakes. It is also known as internal water transport. Rivers that are naturally navigable are called natural waterways. Canals and canalized rivers belong to the category of ‘Artificial Waterways’.

Question 5.
What is a common carrier?
Answer:
A common carrier is a person who is engaged in the business of carrying goods for hire indiscriminately for all persons.

Question 6.
What are the liners types?
Answer:
There are two types of liners namely (i) Passenger liners, (ii) Cargo liners.

Question 7.
What are the types of commercial ships?
Answer:
The following is the major types of commercial ships –

1. The general cargo ship,
2. Bulk carriers,
3. Container ships,
4. Auto carrier,
5. Tankers,
6. Fishing vessels,
7. Oil vessels,
8. Passengers ships,
9. Ferryboats,
10. Tow and tug boats,
11. Specialized ships.

Question 8.
What are bullock carts?
Answer:
It constitutes the predominant form of rural road transport in India for goods traffic and to some extent for passengers’ traffic. It links up the villages with the nearby markets and railway stations. It carries the produce for sale to the market and consumer goods to the villages.

Question 9.
What is a private carrier?
Answer:
A private carrier is engaged in casual occupation and carries goods on occasions or under a special contract.

Short answer questions

Question 1.
What are the demerits of Air transport?
Answer:

1. It is a very costly mode of transport. The rates and fares charged by which are beyond the reach of common people.
2. Aircraft are not quite suitable for carrying heavy loads and weights.
3. It is not dependable because of unfavorable weather which may disturb the air service suddenly.
4. The construction and maintenance of aerodromes involve huge capital expenditure.
5. Every country controls the air space above its territory. Therefore, an airplane cannot fly over another country without obtaining prior permission from the concerned authority.

Question 2.
What is sea transport?
Answer:
Ocean transport has been playing a significant role in the development of economic, social, and cultural relations among countries of the world. International trade owes its growth to ocean transport. Ocean transport enjoys a pride of place in aiding international trade. Cheapness is its great virtue. In the transportation of low-grade, bulky goods among the countries, the role of ocean transport is commendable.

Question 3.
What is Monorail?
Answer:
A monorail is like a train, but instead of having two sets of wheels that balances on a railway track, the monorail is balanced on top of one rail. Monorails are often used to transport people around large cities. Some monorails utilize magnets to hover on their rails, reducing friction between the train and the rail. The first monorail was invented in the 19th century.

Question 4.
What is conveyor transport?
Answer:
It is the broad category of transport mode that includes modes developed from the idea of a conveyor belt. Examples include a Conveyor belt, two or more Pulleys with a continuous loop of material that rotates about them, an Escalator, an Elevator which is used to carry people among floors of the building, etc.

Question 5.
What is Railway Receipt?
Answer:
A railway Receipt is an acknowledgment of receipt of goods by the railway for transporting. It serves as a document of title of goods, viz., it shows the title of its holders of the goods. It may be issued in the name of the consignor or consignee. Only on presentation of the railway receipt, the railways will deliver the goods.

Question 6.
What are the types of Ocean transport?
Answer:
Ocean transport may be divided into two broad categories.

1. Coastal shipping: Coastal shipping
   constitutes an important means of transport in all countries having a long coastline. It is a cheap means of transport for the movement of bulky cargoes like coal, iron ore, etc. to domestic ports of the country. Usually, the coastal shipping trade of a country is reserved for national shipping. In India, the Coastal shipping trade is now exclusively reserved for Indian ships.
2. Overseas shipping: It means the passengers and goods have to cross an ocean. For Example India export goods to America.

Question 7.
What are the demerits of inland waterways?
Answer:

1. It is the slowest means of transport. As compared to this, railways are quicker, safer, and cheaper means of transport.
2. Floods caused during the rainy season, lack of flow of water during summer season affect to ply boats and steamers.
3. Sometimes rivers also change their way. It leads to stoppage and uncertainty in the usage of this means of transport.

Question 8.
What are the economic benefits of transport?
Answer:

1. It increases the efficiency of production.
2. It stimulates wants by increasing the quantity and variety of consumer goods.
3. It develops and expands the market.
4. It helps in price stability by distributing goods all over the country.
5. It aids in economic growth.
6. It helps in specialization and mass production.
7. It encourages innovations in product production and design.

Long answer questions

Question 1.
What are the services of transport to business?
Answer:

1. It increases the efficiency of production: The object of production is consumption. Effective transport system creates time and place utilities and thereby influences the demand for goods and the value of goods. Thus, transport makes production efficient and purposeful.
2. It stimulates wants by increasing the quantity and variety of consumer goods: It helps in getting commodities, which cannot be had or produced in a region due to unsuitable natural conditions. Without adequate and effective transport, goods cannot be had either in the quantities or varieties required in a complex economy.
3. It develops and expands the market: The primary function of transport is to enable the physical distribution of goods at the global level. The distribution of goods must take place easily, economically, and speedily. It provides the chance of expanding the national land international market.
4. It helps in price stability by distributing goods all over the country.
5. It aids to economic growth: The movement of raw materials, fuel, labor, and finished products and the mobility of capital and technical know-how, transport playing a remarkable role in the growth of all industries from agriculture to manufacturing.
6. It helps, in specialization and mass production: Specialization means the division of a complex process of production into a number of separate processes so that each person or group specializes in each and every process. It has been extended to the international level too.
7. It encourages innovations in product production and designing: It provides plenty of opportunities to the producers to produce their product in an innovative and creative way, to catch up with the wider market and reap more profit.

Question 2.
What are the documents used in transport?
Answer:

1. Way Bill: The waybill is an acknowledgment of receipt of goods for transport by the carrier. The carrier, accepting goods for transport, issues waybills in the name of the consignors or consignees. It serves as evidence of the contract of transport. It is also a document of the title of goods. The ownership of goods represented by a waybill can be transferred, by endorsement and delivery of the waybill. If a waybill lost, the consignee will be allowed to clear the goods from the carrier after he executes an indemnity bond.
2. Railway Receipt: Railway Receipt is an acknowledgment of receipt of goods by the railway for transporting. It serves as a document of title of goods, viz., it shows the title of its holders of the goods. It may be issued in the name of the consignor or consignee. Only on presentation of the railway receipt, the railways will deliver the goods. If railway receipt is lost, the consignees can obtain the goods from the railway by executing an indemnity bond. Ownership of the goods can be transferred by endorsement and delivery of the receipt.
3. Charter Party: When goods are to be consigned in large quantity, it is advantageous to hire the whole or substantial part of the ship. The document through which this contract is made is known as ‘Charter Party may also be known as ‘Voyage Charter’ or ‘Time Charter’. The person who hires the ship is known as Charter The charter party brings the vessel and crew under the control of the charter. The charter becomes responsible to the third parties for the acts of the master and crew of the ship.
4. Bill of Lading: Bill of Lading is a document containing the terms and conditions of the contract of the carriage! It is issued by the shipping company and signed by the captain of the ship. It acknowledges the receipt of the goods described in it on board the ship. It also serves as an official receipt of goods. It is a document of the title of goods. The main contents are Name of Exporter, name of the ship, place of loading, particulars of goods shipped, port of destination, freight paid or to be paid, person to whom delivery of goods is to be made, date, etc. If the condition of the packages is good, a clean bill of lading is issued. If some of the packages are found damaged, a foul or clause bill of lading is issued.
5. Air Consignment Note or Airway Note: It is a document prepared by the consignor, which is handed over to the carrier of goods while transporting goods through Airways. Air Consignment Note is made out of three original parts. One is signed by the consignor and marked for the carrier. The second is signed by both the consignor and the carrier and marked for the consignee (intended to accompany the goods) and the third is signed by the carrier and handed back to the consignor after the goods have been accepted.

Question 3.
What are the recent trends in transportation?
Answer:

1. Metro Rail: Metro Rail is a Mass Rapid Transport System (MRTS). It is a convenient, fast, efficient, reliable, comfortable mode of urban transport. Rapid transit is also known as heavy rail, metro, subway, tube, or underground is a type of high capacity, public transport generally found in urban areas.
2. Monorail: A monorail is like a train, but instead of having two sets of wheels that balances on a railway track, the monorail is balanced on top of one rail. Monorails are often used to transport people around large cities. Some monorails utilize magnets to hover on their rails, reducing friction between the train and the rail. The first monorail was invented in the 19th century.
3. Bullet train: High-speed rail is a type of rail transport that operates significantly faster than traditional rail traffic, using an integrated system of specialized rolling stock and dedicated tracks. The first such system began operations in Japan in 1964 and was widely known as the bullet train. High-speed trains normally operate on standard gauge tracks of continuously welded rail.
4. Pipeline Transport: It is the mode of transportation of goods or materials through the pipe. Liquids and gases are transported in pipelines. Pipeline exist for the transport of crude and refined petroleum, fuels such as Oil, Natural gas and Biofuel, etc., and other fluids including sewage, slurry, and water. It requires heavy investment to install.
5. Conveyor Transport: It is the broad category of transport mode that includes modes developed from the idea of a conveyor belt. Examples include a Conveyor belt, two or more Pulleys with a continuous loop of material that rotates about them, an Escalator, an Elevator which is used to carry people among floors of buildings etc.
6. Ropeway Transport: A Ropeway is another means of transport in naval lifting device.
   It can be operated in a place where road construction is impractical and costly. Certain limit of goods of people can be transported with the help of (naval lifting device) electricity. In the hilly remote areas ropeway system of transport may be suitable means of transport.
7. Hyperloop Transport: Hyperloop is a proposed system of transport that would see pods or containers travel at high-level speed through a tube that has been pumped into a near-vacuum. The train pods would either float using magnetic levitation technology or float using air caster “Skis”, similar to how pucks travel across an air hockey table. With so little friction in the tunnel, the pod would be able to travel at immense speed with projected top speeds of 760 mph. Hyperloop is a futuristic transport system. Tunnels for the Hyperloop would be built either above or below ground, at only around 3 meters in diameter, lacking up a smaller ground footprint than traditional rail or road. Elon Musk an entrepreneur had proposed this mode of transport as a “fifth mode of transport” in 2012.

Question 4.
What is Railway Transport? Explain advantages and disadvantages.
Answer:
The invention of the steam engine by James Watt revolutionized the mode of transport all over the world. Railway, as a mode of transport, is the most organized transport undertaking all over the world. Railways are the cheapest and quickest means of transport for carrying heavy goods over long distances.
Advantages of Railway Transport:

1. Railways are well suited for carrying heavy and bulky goods over long distances.
2. It can provide long-distance travel throughout the day and night with unbroken services.
3. It can provide better production and safety to the goods than motor transport. The goods generally carried in closed wagons are not exposed to sun, rain, etc.
4. Though the initial investment is large, in the long run, the operating expenses will be very low in railways and it will prove a cheaper mode of transport. It requires less time than motor transport for carrying goods over long distance with greater speed
5. It has a regular schedule of timing and is available throughout the year.
6. It provides unaffected services whether rainy or shinny weather conditions.

Disadvantages of Railway Transport:

1. Railway rates are relatively higher than motor transport for transporting lightweight articles over short distances.
2. It is inflexible, as it is operated to a particular track that cannot deviate from the set routes.
3. In rural areas, it cannot offer adequate traffic because of uneconomical operating costs.
4. It requires heavy investment for the installation of tracks and maintenance that increases its fare on the users.
5. If railways are not fully utilized and if wagons and coaches are too half-empty to their capacity, a heavy financial burden will be cast on the railway.

Question 5.
Explain the advantages of motor transport.
Answer:
Roads connect the interior parts of a country with railway stations and markets. They help in the exploitation of villages that are the rich sources of raw materials and valuable markets for finished products. Motor transport, as the dominant form of road transport, offers many advantages. They are:

1. Flexibility: The greatest merit of motor transport is its flexibility. It can reach the interior and remote villages. Unlike railways, it is not wedded to any particular track. It can change its route, timing, and areas of operation. It can pick up as well as deliver goods almost anywhere.
2. Complete service: It provides a complete service to businessmen. It leads the goods from the factory or the firm and delivers them at the door of buyers. It thus avoids much handling and the resultant damage. But in the case of railways, goods have to be taken to the railway station, unloaded from the carriers, and then loaded in the railway wagons; at the destination, they have to be again unloaded from them before being delivered to consignees. Besides adding to the cost of goods, this intermediate loading and handling causes damage to goods and delays their delivery.
3. Suitability: Motor transport is very well suited for short-distance traffic. It is also suitable for the delivery of small loads to many consignees on the way. As the capacity of lorries is less than that of railway wagons, small traders who have to transport limited loads can conveniently make use of this transport. It is more suitable for goods like perishable articles which are to be delivered quickly and for meeting sudden demand.
4. Economy: Goods for lorry transport do not require elaborate packing. It is common for owners of goods to travel in lorries along with their goods in order to personally attend to loading and unloading. This practice reduces the risks of breakages and thefts. Further, freight rates in roadways are comparatively lower for short distances and small loads than that in railways. The absence of intermediate handling and loading also reduces the cost in the case of motor transport. Moreover, laying a road is cheaper than laying a railway track. The users of roads pay very little for their laying and maintenance.
5. Speed: Motor transport is quicker than rail transport for transporting goods over short distances. Quick transport and prompt delivery help to increase the turnover of the business.
6. Service: Motor transport renders a valuable service to interior rural areas by connecting them with railway stations, markets, and nearby towns. It serves as a feeder to other forms of transport, namely railways, waterways, and airways. It helps fruits, vegetables, dairy products, etc. reach nearby cities and towns in a state of freshness. Its service to hill areas deserves special mention because of its greater climbing capacity than rail transport. It earns huge revenue from the government and creates more employment opportunities.

For Own Thinking

Geographical separation between producer and consumer – Comment. Importing Crude oil from foreign countries to Petroleum refineries – transporting through Truck tankers or Pipelines – Suggest with reason.
Answer:
Goods are produced at a few places but are required for use at different places. Geographical distance separates producers and consumers. This difficulty is removed by transport, eg: Knitwear products of Tirupur are sold throughout the world, Nellore rice is widely consumed in Chennai and other places with the help of various means of transport.
Import crude oil from foreign countries to petroleum refineries transporting it through truck tankers is good. These tankers are specially designed to carry crude oil, petrol, and petroleum products, but pipelines sometimes suggested it is good because of lesser cost.

Multiple choice questions

1. Transport is an integral part of:
(a) trade
(b) commerce
(c) economics
(d) all the above
Answer:
(b) commerce

2. Transport help to reduce variation in:
(a) price of goods
(b) quality of goods
(c) quantity of goods
(d) none of these
Answer:
(a) price of goods

3. …….. are used in deserts for similar purpose.
(a) Elephant
(b) Lion
(c) Camel
(d) Tiger
Answer:
(c) Camel

4. ……… connect the interior part of a country
(a) Roads
(b) Railways
(c) Tramways
(d) All the above
Answer:
(a) Roads

5. Tramways made their appearance in the ……… century.
(a) 18th century
(b) 16th century
(c) 17th century
(d) 19th century
Answer:
(d) 19th century

6. Motor transport complete service to:
(a) Businessmen
(b) Customers
(c) Bankers
(d) Wholesaler
Answer:
(a) Businessmen

7. ……….. is a free gift of nature.
(a) Air
(b) Water
(c) Land
(d) Animals
Answer:
(b) Water

8. Tramways are a ……….. form of transport.
(a) Very slow
(b) Very speed
(c) Slow
(d) Speed
Answer:
(a) Very slow

9. Which one of the following is covered under land transport:
(a) Liners
(b) Tankers
(c) Pack animals
(d) Tramps
Answer:
(c) Pack animals

10. Which one of the following not covered under transport:
(a) canal
(b) river
(c) Bullock carts
(d) bill of lading
Answer:
(d) bill of lading

11. Who is the Inventor of the steam engine?
(a) James watt
(b) Gopal
(c) R.Bhatt
(d) PK. Ghosh
Answer:
(a) James watt

12. In which year cycle and rickshaw were introduced in the world.
(a) 1850
(b) 1847
(c) 1972
(d) 1867
Answer:
(d) 1867

13. The first railway line in India was opened to traffic between:
(a) Mumbai – Chennai
(b) Chennai – Kolkata
(c) Mumbai and thane
(d) Delhi-Chennai
Answer:
(c) Mumbai and thane

14. Air consignment note is made out in original part:
(a) one
(b) two
(c) three
(d) four
Answer:
(c) three

15. Transport can be divided into types.
(a) three
(b) five
(c) four
(d) one
Answer:
(a) three

16. Cargo vessels are called:
(a) cargo liners
(b) Perrys
(c) liners
(d) tankers
Answer:
(a) cargo liners

17. Best way of transport for long distances:
(a) motor
(b) boats
(c) tramways
(d) railways
Answer:
(d) railways

18. The invention of the steam engine by James watt ……… modes of transport all over the world.
(a) revolutionized
(b) modernized
(c) industrialized
(d) economized
Answer:
(a) revolutionized

19. In the rural areas the most important mode of transport is:
(a) donkeys
(b) horses
(c) motor vehicles
(d) Bullock carts
Answer:
(d) Bullock carts

20. For carrying heavy logs in forests used.
(a) elephants
(b) horses
(c) camels
(d) donkeys
Answer:
(a) elephants

Students get through the TN Board 11th Commerce Important Questions Chapter 13 Warehousing which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 13 Warehousing

Very short answer questions

Question 1.
Define warehouse.
Answer:
According to Stephenson “A warehouse is an establishment for the storage or accumulation of goods”.

Question 2.
Write a note on warehousing in Tamil Nadu.
Answer:
A premier warehousing agency in the State of Tamil Nadu was established in 1957. It provides price support to the agricultural sector. It is one of the biggest public warehouses operating in the state offering logistic services to a diverse group of clients.

Question 3.
What are the documents used in warehousing?
Answer:

1. Warehouse warrant,
2. Dock warrant,
3. Dock receipt,
4. Warehouse keeper’s certificate and Delivery order.

Question 4.
Food Corporation of India. Explain.
Answer:
It provides storage facilities for food grains. FCI also hires storage capacity from other sources such as CWC, SWC, State Governments, and private parties. The available storage capacity of the Food Corporation of India in the seventh plan is 20.33 million tonnes.

Question 5.
What is in Transit Mixing?
Answer:
It refers to a function in which the warehouse receives products from different plants and mix and repack them as per the client’s requirement.

Short answer questions

Question 1.
What is the village storage?
Answer:
Underground storage structures are used by farmers in villages to store food grains. They are safer from threats from various external sources of damage, such as theft, rain, or wind. Separate peripheral structures with mud are erected as surface storage structures for food grains. PAU bin, Pusa bin, HapurTekka, etc. are used for small-scale storage of grains. Cap storage, Silos, etc, are used for large-scale storage of food grains.

Question 2.
Define Government licensed Warehousing.
Answer:
Bonded warehouses are those warehouses, which are licensed by the government to accept the storage of imported goods that are not cleared due to non-payment of customs duty by the importer. Branding can be undertaken in the warehouse itself.
Bank loans can be obtained by submitting the receipt issued by these warehouses as collateral security. Strict supervision and control are imposed by customs authorities on their operation and functioning.

Question 3.
What are the disadvantages of Warehousing?
Answer:
Warehousing is not effective because of the following reasons:

1. There are no adequate transport facilities between the place of production and warehouses.
2. Lack of sufficient storage facilities for different commodities such as perishable and non-perishable commodities.
3. Complicated formalities are to be fulfilled at the warehouses. The illiterate and innocent farmers are not able to cope with these procedures.
4. The complicated process of Barcode technology can reduce the storing of goods by some producers.
5. Unavoidable delay in obtaining financial assistance may cause loss to the owner of goods.

Question 4.
What is the Warehousing in India?
Answer:
India is an agrarian country but the importance of warehousing was not felt till 1950.
Agriculture contributes 16 percent of the overall GDP and accounts for the employment of approximately 52 percent of the Indian population. It is estimated that more than 40 percent of our agricultural productions wasted due to poor storage facilities.

Long answer questions

Question 1.
What are the factors determining the warehousing?
Answer:

1. Mass production: Production is based on the anticipated demand for goods. Mass production of goods takes place by establishing big factories and modem production. The market for such goods is spread all over the country. Therefore, warehouses are to be built at different places to store these products and provide prompt supplies when demanded.
2. Nature of commodities: Some goods are perishable in nature and therefore they should be consumed in time to avoid deterioration. Storing them in cold storage can extend the life of the goods.
3. Seasonal production but regular consumption: The farm products such as wheat, sugar, pulses, etc. are produced only in seasons. But the Consumption of these products is evenly spread throughout the year. If proper storage facilities are not provided, .the quality of these goods deteriorates and may become not usable.
4. Regular production but seasonal consumption: Certain goods are produced regularly throughout the year. But, they are demanded in seasons only. For example, raincoats, blankets, umbrellas, etc. require
   storage for a whole year. They can be N released in large quantities to meet the heavy demand in the rainy and winter seasons.
5. Proximity to production centers: Productions of goods at specific centers need to be supplied in time and without interruption to consumers throughout the country. For this purpose, goods are regularly fed to the warehouses situated in different market areas.

Question 2.
Write a brief note on the various types of documents used in the warehousing.
Answer:

1. Warehouse warrants: It is a document issued in favor of the owner or depositor of goods by the warehouse keeper. This is a document of title of goods and can be transferred by simple endorsement and delivery. To transfer all the goods the warehouse warrant is sufficient. If only a part of the goods are to be transferred then a delivery order is needed. The delivery order is to be accompanied by the warehouse warrant.
2. Warehouse Keeper’s Receipt: It is a document issued by the warehouse keeper, which acknowledges the receipt of goods from the depositor of goods. It also shows the existence of an agreement to keep the goods in the warehouse subject to certain conditions. This is not a document of title of goods and is not transferable.
3. Dock Warrant: Dock is a place in the harbor where the goods are kept for loading into the ship. A dock warrant is a document of title of goods issued by dock authorities. This document certifies that the dock authorities hold the goods. To take delivery of the goods this certificate should be given back to dock authorities. The right of getting delivery of goods can be assigned to third parties too.
4. Dock Receipt: Dock receipt is an acknowledgment of receipt of goods issued by dock authorities to the owner of the goods. It is not a document of the title of goods. Therefore, the right of taking of delivery of goods cannot be transferred.
5. Delivery Order: This is a document through, which the depositor directs the warehouse keeper to deliver the specified goods either to the party mentioned in the document or to the bearer. The warehouse keeper delivers the goods as per the instruction. Transfer of ownership takes place through this document.

Question 3.
What are the Central Warehousing functions?
Answer:
It was established in 1957. The available storage capacity of Central Warehousing Corporation is 11.17 million tonnes and with the operation through 464 warehousing centers across the country, (as of 30th September 2017).
Functions of Central Warehousing Corporation:

1. To provide agency services for scientific storage of agricultural produce, seeds, manures fertilizers, agricultural implements, and other notified commodities.
2. To issue a negotiable warehouse receipt for procuring credit to the owners of goods.
3. To preserve the produce deposited with care and protect against insects and various pests and deterioration due to moisture and dampness.
4. To act as an agent of the government for the purchase and sale, storage, and distribution of specified commodities and transport to and from the warehouse.
5. To reduce the cost of storage and facilitate the marketing of products through proper grading.

Question 4
Write in detail about performances.
Answer:
A premier warehousing agency in the State of Tamilnadu was established in 1957. It provides price support to the agricultural sector.
Performances:

1. Tamilnadu Warehousing Corporation (TNWC) operates 65 warehouses across the state with a storage capacity of 6.3 lakh tonnes providing warehousing services for a wide range of products running from agricultural products to sophisticated industrial products.
2. Warehousing activities of Tamil Nadu Warehousing Corporation include food grain warehouse and custom bonded- warehouse.
3. Apart from storage and handling, Tamil Nadu Warehousing Corporation also offers its services in the area of handling, transportation, disinfecting services, fumigation services, and other ancillary activities.
4. Tamil Nadu Warehousing Corporation also offers training on the scientific storage of stocks to different agencies.
5. Scientific storage and handling services are offered for more than 200 commodities that include agricultural produce, industrial raw materials, finished goods, and a variety of hygroscopic items.

Question 5.
Write in detail about the functions of TNWC.
Answer:

1. The Regional Managers/Senior Regional Managers conduct regular inspections of warehouses with 100% physical verification of stocks in their region.
2. The copies of inspection reports for all inspections conducted by RMs/SRMs are submitted to Head Office along with their remarks if any. Based on this, further action is taken by the Head Office.
3. Regional Managers also conduct surprise inspections to sort out the problems in the warehouses.
4. The Regional Managers submit tour diaries every month for review by the Inspection Cell.
5. The inspection wing conducts staff meetings and Regional Managers’ meetings depending upon the need to sort out business matters, collection, staff grievances, etc.

For Future teaming

The warehouse of the future: How will it impact efficiency?
Answer:
From 2019, new technology could be revolutionary and improving efficiency in warehouses by Warehousing Management System (WMS). Technologies including artificial intelligence, 3D printing, and self-driving vehicles could be more widely used in warehouses- everywhere sooner than you think. By 2030, warehouses will be a part of an initiative to achieve zero net energy.
Warehouse buildings will operate 24 x 7 x 365 and be designed with sustain¬ability. By creating strategies, warehouses will save costs and prevent harmful emissions. Solar panels will become the main source of energy for warehouses. This will assist in running the warehouse lighting and equipment. As well as recharging the electric vehicles that make deliveries. New technologies could be increasing the efficiency of how warehouses are run as soon as 2019.

Multiple choice questions

1. Warehousing is one of the functions of:
(a) banking
(b) insurance
(c) marketing
(d) none of these
Answer:
(c) marketing

2. ……… is based on the anticipated demand for goods.
(a) Production
(b) Marketing
(c) Transport
(d) Warehouse
Answer:
(a) Production

3. ……… Warehouse service provides inspection packing and shipping:
(a) private
(b) public
(c) co-operative
(d) all of the above
Answer:
(b) public

4. …….. warehouse are owned by private persons to store their own products
(a) Private
(b) Public
(c) Co-operative
(d) Household warehouse
Answer:
(a) Private

5. …….. are formed by the state and central government for their exclusive uses.
(a) Food Corporation of India
(b) Government Warehouse
(c) Bank godowns
(d) None of these
Answer:
(b) Government Warehouse

6. The term ware means:
(a) sales
(b) manufactures
(c) products
(d) goods
Answer:
(c) products

7. The Central warehousing corporation was established in:
(a) 1957
(b) 1900
(c) 1988
(d) 1986
Answer:
(a) 1957

8. The available storage capacity of SWC in the seventh plan is ……. tonnes.
(a) 9.70 Million
(b) 8.70 Million
(c) 28.70 Million
(d) 10.70 Million
Answer:
(a) 9.70 Million

9. CWC stands for:
(a) Central Water Commission
(b) Central Warehousing Commission
(c) Central Warehousing Corporation
(d) Central Water Corporation
Answer:
(c) Central Warehousing Corporation

10. FCI, STC, CWC are examples of:
(a) Bonded warehouse
(b) Government warehouse
(c) Private warehouse
(d) Co-operative warehouse
Answer:
(b) Government warehouse

11. Storage is only a:
(a) holding place
(b) marketing center
(c) bonded warehouse
(d) delivery point
Answer:
(b) marketing center

12. The warehouse owned by large scale manufacturers wholesalers etc., are called:
(a) public warehouse
(b) private warehouse
(c) co-operative warehouse
(d) bonded warehouse
Answer:
(b) private warehouse

13. The acknowledgment of receipt of goods issued by dock authorities to the owner of the goods is known as:
(a) dock warrant
(b) warehouse warrant
(c) delivery order
(d) dock receipt
Answer:
(d) dock receipt

14. A premier warehousing agency was started in Tamil Nadu in the year:
(a)1975
(b) 1989
(c) 1957
(d) 1991
Answer:
(c) 1957

15. As of 1st April 2002 the storage capacity of FCI was:
(a) 20.33 million tonnes
(b) 203.3 lak million
(c) 358.40 Lakh tonnes
(d) 162.78 million tonnes
Answer:
(c) 358.40 Lakh tonnes

16. Grain elevators it’s popular in:
(a) Andhra
(b) USA & UK
(c) Japan
(d) China
Answer:
(b) USA & UK

17. On the basis of ownership warehouse can be classified into:
(a) one
(b) two
(c) three
(d) four
Answer:
(c) three

18. On the basis of service warehouse can be classified into:
(a) ten
(b) nine
(c) five
(d) eight
Answer:
(b) nine

Students get through the TN Board 11th Commerce Important Questions Chapter 12 Functions of Commercial Banks which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 12 Functions of Commercial Banks

Very short answer questions

Question 1.
Write a brief note on EFT in India?
Answer:
In 1995 the-RBI has introduced an electronic clearing system for the transfer of funds in Mumbai, Delhi, Calcutta, and Chennai. A Floppy input clearing system was introduced in the banking industry in which the data are considered for settlement. In 1997 RBI has introduced an electronic clearing service for payment of electricity bills in Mumbai.

Question 2.
Meaning of Bank Rate.
Answer:
Bank Rate is the rate at which bills are discounted and rediscounted by the banks with the central bank during inflation the bank rate is increased and during deflation bank rate is decreased.

Question 3.
Meaning of land development banks and their functions.
Answer:
Land development banks were earlier called land mortgage banks. Its structure is not uniform in all the states. In some states it is federal and some state is mixed.
Functions: It gives long-term loans to agriculturalists for making improvements on the land repaying old debt etc. It gives loans to free the mortgaged land and to buy new land.

Question 4.
What are the limitations of the MICR cheque?
Answer:
MICR cheques are expensive as it requires superior quality paper and special ink. Customers have to be educated in handling MICR Cheques Counterfoils are not permitted in the Cheque book, which may cause inconvenience to customers.

Question 5.
Give examples of Commercial banks?
Answer:
Canara Bank, Punjab National bank, Lakshmi villas bank, etc.

Question 6.
Give the meaning of internet banking.
Answer:
Banking through the internet is called internet banking. It can also be called electronic banking many have their own website that offers banking facilities such as account inquiry requests for statements and checkbooks etc., on the net.

Question 7.
What do you mean by Indigenous banks?
Answer:
Indigenous bankers are those who do not come under the control of RBI.

Short answer questions

Question 1.
List the main types of banks.
Answer:
A. On the basis of function:

1. Commercial banks.
2. Industrial banks.
3. Regional Rural Banks.
4. Exchange banks.
5. Central bank.

B. On the basis of ownership:

1. Public sector banks.
2. Private sector banks.
3. Co-operative banks.

C. On the basis of schedules of RBI:

1. Schedules banks.
2. Non-Schedules banks.

Question 2.
Explain the advantages of ATMs to customers and bankers.
Answer:

1. It gives round-the-clock service and thereby banking time is saved.
2. Service is quick and efficient and free from errors.
3. On networking, the cardholder can access cash and services at any place.
4. Funds can be transferred easily to any branch of the banks.
5. Withdrawals can be made at any time and hence it can be called an anywhere banking facility.

Question 3.
List the various types of deposits accepted by the bank.
Answer:
Bank accepts various types of deposits. There are four types of deposits.

1. Fixed or Time Deposit Account.
2. Savings Bank Deposits Account.
3. Current Deposits Account.
4. Recurring deposits Accounts deposit a fixed sum of money.

Question 4.
What is a cheque?
Answer:
A cheque is an easy and safe method of making payments to or withdrawing money from a bank. According to the Negotiable Instruments Act 1881, “a cheque is a bill of exchange drawn on a specified banker payable on demand”.

Question 5.
What is a MICR cheque?
Answer:
A MICR cheque is a modem form of a cheque, which minimizes the human efforts and processing time (Magnetic Ink Character Recognition). It is a system that uses a special machine that types characters on the documents using ink containing iron oxide.

For Own Thinking

In all ATM Centers, there are one or two machines, sometimes it may be four or five. All ATM machines have some amount of money inside the box. In this way lot of currency notes are locked day by day. Think about the alternate way for avoiding this locking of currency notes.
The debate about the security problem in the E-Banking system of services.
Answer:
Bank visit: I want to go to the bank of India. First I asked regarding how to open a bank account. How to operate a bank account. What is the minimum balance? How to take money from the bank. How to use ATM cards. Operate an E-Banking system. How will you get a credit card?
When you want a loan: We want to get a loan. First of all open a bank account. Operate bank account for at least one year correctly. Want to get a loan bank will check our creditworthiness, our monthly salary, or by way of getting monthly income. The eligibility to get a loan. To show all our ID proofs and address proofs, pan card, etc. Bank also wants to check our credit score. Then only get bank loans. Surety wants to give against the loan.

For Future teaming

Field visit – nearest – collect information about the rate of interest payable on Savings deposit, Fixed deposit, Current deposit, and Recurring deposit. Collect photocopies of the various cards used in our day-to-day life. Nowadays debit cards, credit cards, smart cards, and other cards are used for day-to-day purposes. In the future how many cards we may use for our purposes.
Answer:

1. Commercial banks: Canara Bank, Punjab National Banks, Industrial banks.
2. Industrial Banks: IDBI; Industrial Development Bank of India. ICICI: Industrial Credit and Investment Corporation of India.
3. Co-operative banks: Central co-operative bank, Agricultural co-operative bank.
4. Foreign bank: Standard charter bank. HSBC.

Case Study

A person forgot his password or a Debit card, How to get a password? Give guidelines to him.
Answer:
Forget his password:
1st Step: The banker asked his customer for his registered phone number. Then from the bank, we can get a one-time password (OTP) through the registered phone number and get a password easily.
2nd step: The customer can get a new password from the bank manager. The manager will guide properly and help the customer to get a new password.
3rd Step: Using an ATM card and customer registered phone number he can get the password.

Multiple choice questions

1. Banks are necessary for the:
(a) farmers
(b) students
(c) children
(d) none of these
Answer:
(a) farmers

2. Banks that help for the development of trade and commerce are called:
(a) Commercial Bank
(b) Industrial Bank
(c) Regional rural bank
(d) Exchange bank
Answer:
(a) Commercial Bank

3. ………… banks are established in rural areas.
(a) Commercial Bank
(b) Industrial Bank
(c) Regional rural bank
(d) Exchange bank
Answer:
(c) Regional rural bank

4. Marvadis, pawnbrokers are examples of:
(a) Central bank
(b) Commercial bank
(c) Indigenous bankers
(d) None of these
Answer:
(c) Indigenous bankers

5. ………. banks play an important role in the economic development of a country.
(a) Central bank
(b) Commercial bank
(c) Indigenous bank
(d) Exchange bank
Answer:
(b) Commercial bank

6. State Co-operative bank is also called as:
(a) UTI
(b) Apex bank
(c) ICICI
(d) HDFC
Answer:
(b) Apex bank

7. The primary functions of a commercial bank are of types.
(a) 1
(b) 1
(c) 4
(d) 5
Answer:
(b) 1

8. NEFT this was launched by the RBI in:
(a) 2005
(b) 2006
(c) 2008
(d) 2010
Answer:
(a) 2005

9. Real-time gross settlement systems it was launched by RBI:
(a) 2013
(b) 2015
(c) 2016
(d) 2006
Answer:
(a) 2013

10. Electronic clearing services was launched by the RBI in:
(a) 1996
(b) 1998
(c) 1999
(d) 1995
Answer:
(d) 1995

Students get through the TN Board 11th Commerce Important Questions Chapter 11 Types of Banks which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 11 Types of Banks

Very short answer questions

Question 1.
The structure of Cooperative banks?
Answer:

Question 2.
List the various types of deposit accepted by banks?
Answer:

1. Fixed Deposit,
2. Saving Deposit,
3. Current Deposit,
4. Recurring Deposit.

A bank in a country opposite another bank in a foreign countries to act as a correspondent bank.

Question 3.
What are the development banks?
Answer:
Huge finance required for investment, expansion, and modernization of big industries and others is granted by a separate type of bank called development Banks.

Question 4.
Give two example regional rural banks?
Answer:

1. Pallavan Grama Bank, Salem, Tamil Nadu.
2. Pandian Grama Bank,Thirumangalam, Madurai Dirstict, Tamil Nadu.
3. Vallalar Grama Bank, Chidambaram, Cuddalore District, Tamil Nadu.
4. Paduvai Bharathiyar Grama Bank, Villiyanur, Puducherry.

Question 5.
Give two example specialized banks.
Answer:
(a) Export-Import Bank of India (EXIM Bank).
(b) National Housing Bank (NHB).

Question 6.
Name of the Nationalised banks?
Answer:
The Nationalised banks are Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce.

Question 7.
Name of the private sector banks?
Answer:
The Private Sector banks are Lakshmi Vilas Bank, Karur Vysya Bank, Kotak Mahindra bank.

Question 8.
Public sector banks give two examples.
Answer:
Public sector banks are State Bank of India, IDBI Bank Ltd., and all nationalized banks.

Short answer questions

Question 1.
Small finance banks objectives.
Answer:

1. Mobilizing rural savings (accepting deposits).
2. Providing credit to – (a) small and marginal farmers, (b) to micro and small industries, and (c) Other unorganized sector entities.
3. In September 2015, RBI granted provisional licenses to 8 Non-Banking Finance Companies (NBFCs) already engaged in microfinance to be converted into SFBs and 2 others. SFBs are low-cost structure banks. They are formed under section 22 of the Banking Regulation Act 1949.

Question 2.
What are the features of banks?
Answer:

1. Acceptance of deposits of money from the public.
2. Obligation to refund deposits on demand.
3. Lending or investing money for promotion and development of business.
4. Profitable employment of funds received as deposits from the public.
5. Money is. with-drawable by cheque or draft.

Question 3.
Mention the main function of Co-operative Banks.
Answer:
The main function of Co-operative Banks is to link the farmers with the money markets of the country.

Long answer questions

Question 1.
Explain the need for banking.
Answer:

1. Savings and capital formation Bank plays a vital role in mobilizing the savings of the people and promoting capital formation for the economic development of the country.
2. Canalization of savings The mobilized savings are allocated by the banks for the development of various fields such as agriculture, industry, communication, transport etc.
3. Implementation of Monetary Policy A well-developed banking system can easily implement monetary policy because the development of the economy depends upon the control of credit given by the banks. So, banks are necessary for the effective implementation of monetary policy.
4. Encouragement of Industries Banks provides various types of financial services such as granting cash credit, loans, issuing letters of credit, and bill discounting, etc., which encourages the development of various industries in the country.
5. Regional development Banks, by transferring surplus money from the developed regions to the less developed regions reduces regional imbalances.

Question 2.
What are central co-operative banks and what are its functions?
Answer:
Central Co-operative Banks is the federation of all primary societies at the district level. Therefore it is also called District co-operative Central Banks.
Functions:

1. They supervise, control, and finances the primary credit societies.
2. They provide credit to individual customers on the basis of security.
3. They accept deposits and pays a higher rate of interest than commercial banks.
4. They help in remitting money to their customers.
5. They help in solving problems of primary co-operative societies.
6. They control and supervise the working of primary co-operative societies.

For Own Thinking

Question 1.
The debate about the benefits of various banks.
Answer:

1. Savings and capital formation.
2. Canalization of savings.
3. Implementation of monetary policy.
4. Encouragement to industries.
5. Regional development.
6. Development of Agriculture of other neglected sectors.

Question 2.
Bank visit – write an essay about the bank you visited.
Answer:
While filling the form. I asked for her ID proof. To my amazement, she took out a polythene bag full of all sorts of cards. Some cards had her picture on them and some were of her husband. I look for her Adhaar Card and fill in the details after 15 minutes of interrogation. I completed her from where applicants’ signatures were required. She with all her concentration held the pen as if it was a discomforting object to hold and wrote her name in Hindi. Her handwriting similar to that of a kid of UKG class may be a bit better.

Question 3.
When you want loan how will you get the loan from bank?
Answer:

1. Banks are seeing the eligibility to get loans.
2. Salaried people to get loan.
3. Three months bank statement.
4. ID proof.
5. Address proof.
6. Repayment sources.
7. Equal asset as a surety.

For Future teaming

Question 1.
Mention the names of Commercial Banks, Industrial Banks, Cooperative Banks, and Foreign Banks in your areas.
Answer:
Commercial banks are:

1. Canara Bank
2. Punjab National Bank
3. Lakshmi Villas Bank.

Industrial banks are:

1. IDBI: Industrial Development Bank of India.
2. ICICI: Industrial Credit and Investment Corporation of India.

Co-operative banks are:

1. Central co-operative bank.
2. Land Development bank.

Foreign banks are:

1. Standard Chartered Bank.
2. Bank of England.

Question 2.
Collection of pictures related to different types of banks.
Answer:

Case Study

Question 1.
You are the Agricultural bank manager; a farmer approaches you for a loan from your bank for purchasing a tractor and other farm equipment. How would you sanction the loan?
Answer:
Regarding land details: Whether he is a small farmer. Whether he is eligible to get loan repayment sources.

Question 2.
Due to natural calamities, the farmer could not repay the loan. He has no other way to repay the loan. How to collect loans from the farmer?
Answer:
Banker collect loan from the farmer by way of Personal property. But without interest bankers collect loans from the farmer. Sometimes farmer has no way to repay the loan. The loan will become bad debt.

Multiple choice questions

1. Bank of Hindustan was first bank in India established in:
(a) 1870
(b) 1970
(c) 1670
(d) 1770
Answer:
(d) 1770

2. The general bank of India was established in:
(a) 1976
(b) 1786
(c) 1686
(d) 1886
Answer:
(b) 1786

3. Bank of Calcutta was the first joint-stock bank established in:
(a) 1906
(b) 1806
(c) 1606
(d) 1706
Answer:
(b) 1806

4. Bank of Calcutta it was renamed as the Bank of Bengal:
(a) 1909
(b) 1809
(c) 1609
(d) 1709
Answer:
(b) 1809

5. Bank of Bombay is established in:
(a) 1840
(b) 1940
(c) 1860
(d) 1866
Answer:
(a) 1840

6. IDBI Bank established as the apex development bank in:
(a) 1999
(b) 2004
(c) 2008
(d) 1964
Answer:
(d) 1964

7. All Co-operative bank in Tamilnadu are registered under Tamilnadu Co-operative societies Act:
(a) 1883
(b) 1663
(c) 1773
(d) 1983
Answer:
(d) 1983

8. In 2017 there were …….. foreign banks in India and all of them were scheduled bank.
(a) 40
(b) 41
(c) 42
(d) 43
Answer:
(c) 42

9. Regional rural banks as on 31.3.2016 there were 56 RRB in India with branches:
(a) 14494
(b) 15000
(c) 18000
(d) 10000
Answer:
(a) 14494

10. Give the example of RRB:
(a) ICICI
(b) HDFC
(c) UTI
(d) Pallavan grama bank
Answer:
(d) Pallavan grama bank

Students get through the TN Board 11th Commerce Important Questions Chapter 10 Reserve Bank of India which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 10 Reserve Bank of India

Very short answer questions

Question 1.
What do you mean by indigenous banker?
Answer:
Indigenous bankers are those who do not come under the control of RBI. For example Moneylenders, Marvadis Chettiars, Pawnbrokers are known as indigenous bankers.

Question 2.
List the credit control methods of Reserve bank of India.
Answer:

Question 3.
Define Scheduled Bank?
Answer:
The banks which fulfill the following conditions are classified into scheduled banks.

1. Their paid-up capital and reserves are at least Rs. 5 Lakhs.
2. Their operations are not detrimental to the interest of the depositors.
3. They are a corporation or Cooperative society and not partnerships or single-owner firms.

Short answer questions

Question 1.
Who is the sole authority for the issue of currency notes?
Answer:
RBI is the sole authority for the issue of – currency notes in India except for one rupee coin, one rupee note, and subsidiary coins. These notes are printed and issued by the issue department.

Question 2.
Who is the Banker to the Government?
Answer:
RBI acts as the banker and agent of the government. It gives the following services:

Question 3.
Who is called a Banker’s Bank?
Answer:
As per the Banking Regulation Act 1949, every bank has to keep, certain minimum cash balance with RBI. This is called as Cash Reserve Ratio. The scheduled banks can borrow money from the reserve bank of India on eligible securities and by rediscounting bills of exchange. Thus it acts as a banker’s bank.

Long answer questions

Question 1.
What is the main objective of RBI?
Answer:

1. To manage and regulate foreign exchange.
2. To build a sound and adequate banking and credit structure.
3. To promote specialized institutions to increase the term finance to industry.
4. To give support to government and planning authorities for the economic development of the country.
5. To control and manage the banking system in India.
6. To execute the monetary policy of the country.

For Own Thinking

A Debate on demonetization and – remonetization.
Answer:
Demonetization:

1. To crop whip against black money.
2. To drive out counterfeit currency in circulation.
3. Formalization of cash-dependent business
4. Dismantling the financial strength of terrorism and Naxalism. This leads to No black money.
   “All must pay correct taxes,
   All are equal. ”

Remonetization:

1. There were Rs. 17.118 billion value of Rs. 5000 and Rs. 1000 currency notes in circulation before demonetization.
2. They consisted of around 2203 Crore: pieces of notes.
3. Now remonetization was carried out by issuing new Rs. 2000 and Rs. 500 currency notes to circulate.
   ‘All economic problems solved now”

For Future teaming

1. Know the Central Banks of Some other Countries. The Central Bank of Russia is the Bank of Russia. The Central Bank of Sri Lanka is the Central Bank of Sri Lanka. The Central Bank of the USA is …..(i)…… The Central Bank of Pakistan is ..(ii)…..
Answer:

(i) Central Bank of America is Federal Reserve.
(ii) Central Bank of Pakistan is the State Bank of Pakistan.

2. Mention the names of Central Banks in three other countries.
Answer:

1. Central Bank of Bhutan – Bhutan.
2. Reserve Bank of Australia – Australia
3. Central Bank of China – China.
4. Bank of Canada – Canada.

3. Understand the concepts of the monetary authority, banking system, financial system.
Answer:
The formal financial system of four segments. These are financial institutions, financial markets, financial instruments, and financial services.

4. Collection of names of RBI Governors.
Answer:

1. D. Subbarao. IAS – September 5, 2008
2. Raghuram Rajan – September 4, 2013
3. Urjit Patel – September 5, 2016.

5. Collection of photocopy of currencies and coins in India.
Answer:

(i) Currency rare Indian 2 rupees.
(ii) Rare 1908 King Edward VII
(iii) My coin collections two rupees.

Case Study

1. Take up a recent newspaper clipping about RBI such as the measures taken to reduce NPA. etc.
Answer:
Central banks are not known to be trigger happy. RBI is no exception. Indeed it has often been criticized for being much too cautious. Especially when it comes to loosening Capital A/c.

2. Arrange for a group discussion on customer grievances and the cases settled by Banking Ombudsman offices.
Answer:
The RBI today said it will bring about a customer grievances redressal mechanism for non-banking finance companies NBFCs by this month-end.

3. Visit the RBI website www.rbi.org.in to read and have a discussion on any annual report, etc.
Answer:
The asset quality of the banking sector continued to be a concern during 2016-2017. In the aftermath of the assets quality review (QAR) undertaken by the RBI.

Multiple choice questions

1. Which of the following is an example of e-banking:
(a) EFT
(b) Online banking
(c) ATM
(d) All of the above
Answer:
(d) All of the above

2. Who can get an overdraft from a bank?
(a) A current A/c Holder
(b) A savings A/c Holder
(c) A fixed Deposit A/c Holder
(d) A Recurring Deposit A/c Holder
Answer:
(a) A current A/c Holder

3. Give full form of ATM:
(a) Automatic telemoney
(b) Any time money
(c) Automated teller machine
(d) Automatic transfer machine
Answer:
(c) Automated teller machine

4. Name the type of banking under which ATM credit card and EFT facilities are available:
(a) Internet Banking
(b) E – Banking
(c) Modem Banking
(d) Online Banking
Answer:
(b) E – Banking

5. Name the controlling authority to telecom services in India.
(a) TRAI
(b) SEBI
(c) RBI
(d) IRDA
Answer:
(a) TRAI

6. Which of the following can be used only for e-business?
(a) Cheques
(b) Credit card
(c) Debit card
(d) E-cash
Answer:
(d) E – cash

7. Banks are called as manufactures of:
(a) Money
(b) Loans
(c) Deposit
(d) Overdrafts
Answer:
(a) Money

8. The reserve introduced an electronic clearing service for payment of electricity, bills in 1997;
(a) Chennai
(b) Kolkatta
(c) Delhi
(d) Mumbai
Answer:
(d) Mumbai

9. A bank that occupies a central position in the monetary and banking system of the country and has a superior financial authority is:
(a) Central Bank
(b) Commercial Bank
(c) Exchange Bank
(d) Co-operative bank
Answer:
(a) Central Bank

10. ……… are those who do not come under the control of RBI,
(a) Indigenous Bank
(b) ICICI
(c) Central bank
(d) exchange bank
Answer:
(a) Indigenous Bank

11. RBI on the basis of functions:
(a) Commercial bank
(b) Co-operation bank
(c) Non-scheduled bank
(d) Private sector bank
Answer:
(a) Commercial bank

12. The head office of the RBI is situated in:
(a) Chennai
(b) Mumbai
(c) Delhi
(d) Kolkatta
Answer:
(b) Mumbai

13. The demonetization in ………. year was a grand success because of the leadership role of the RBI.
(a) 2013-2014
(b) 2014-2015
(c) 2012-2013
(d) 2016-2017
Answer:
(d) 2016-2017

14. One governor and four deputy governors appointed for a period of ………. years.
(a) one
(b) two
(c) three
(d) four
Answer:
(d) four

15. RBI it also has ………. regional officers.
(a) 20
(b) 19
(c) 21
(d) 24
Answer:
(b) 19

16. The functions of the RBI can be grouped under the heads:
(a) 1
(b) 2
(c) 5
(d) 6
Answer:
(b) 2

17. This central office has ………. departments in 2017.
(a) 30
(b) 31
(c) 33
(d) 36
Answer:
(c) 33

18. Emblem of RBI:
(a) Palm tree & tiger
(b) Palm tree lion
(c) Palm tree & zebra
(d) Palm tree kangaroo
Answer:
(a) Palm tree & tiger

19. Foreign exchange management Act:
(a) 2003
(b) 2008
(c) 1999
(d) 2016
Answer:
(c) 1999

20. The rupee symbol was changed from Rs to by the government of India on:
(a) 15.7.2010
(b) 15.4.1987
(c) 15.3.2011
(d) 15.6.2012
Answer:
(a) 15.7.2010

21. There were ………. billion value of 500 and 1000 currency notes in circulation before Demonetisation.
(a) 16118
(b) 17118
(c) 17211
(d) 16444
Answer:
(b) 17118

Students get through the TN Board 11th Commerce Important Questions Chapter 9 Government Organisation which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 9 Government Organisation

Very short answer questions

Question 1.
What was the role of government in the past?
Answer:
In the past the role of government was limited only to the maintenance of law and order.

Question 2.
What factors govern the choice of a particular form of organisation for an industry?
Answer:
The choice of the particular form of organisation depends upon

1. the nature of the industry,
2. the circumstances of the country and
3. the policy of the government.

Question 3.
Explain the management of public corporation.
Answer:
A Public corporation is an autonomous body corporate created by a special statute of a state or central government. A public corporation is a separate legal entity created for a specific purpose. It is a administrated by a board appointed by public authority to which it is answerable.

Question 4.
How does H. Hansen define public enterprises?
Answer:
According to A.H. Hansen “Public enterprise means state ownership and operation of industrial, agricultural, financial and commercial undertaking.

Question 5.
How can we establish state enterprises?
Answer:
State enterprises are established to implement economic policies of the government the primary objective of the state enterprises is to serve the people and help in creating an environment for industrial activity.

Question 6.
Give some example for government department organisations in india.
Answer:
In India

1. Railways post and telegraph,
2. BSNL,
3. Radio and
4. Television as government departments.

Question 7.
Give the four forms of Govt. Institution.
Answer:

1. Departmental understanding
2. Public corporation
3. Government company
4. Board organization.

Question 8.
What are the forms in which government can organize an industrial or commercial unit.
Answer:
The government can organise an industrial or commercial unit in any one of the following form

1. Departmental of the government,
2. Separate corporation and
3. Joint stock company.

Question 9.
Why departmental organisation is suitable for defence industries?
Answer:
Strategic industries like defence and atomic power cannot be better managed other than government departments. Department undertakings can maintain secrecy in their working.

Short answer questions

Question 1.
What necessitated Governments to intervene in industrial sector?
Answer:
Industrial revolution helped all-round growth of industries. Private entrepreneurs worked, only for profit motive. The exploitation of consumers and workers by private entrepreneurs became very common. The development of industries was left to the judgment of private enterprises. Therefore, Government control or intervention became a necessity to safeguard the interests of the general public.

Question 2.
How does the state enterprises bring in balanced economic growth?
Answer:
The aim of Industrialisation is to develop all industries, essential for the country. Also, various regions of the country should be equally developed. Private sector may not establish industries in certain regions, where they do not find opportunities to earn more profit. They cannot be compelled to start their undertakings in backward regions. So government can start industries in backward areas.

Question 3.
What is a Public Corpqration?
Answer:
Public Corporation is established under a specific statute passed in the parliament. It is also known as-a statutory corporation. The statute defines its objectives, powers and functions. It is an autonomous body fully financed by the government. It has a separate legal existence.

Question 4.
Why does the government enter into those fields where large investments are required?
Answer:
Some undertakings need heavy investment and the gestation period may also be longer. Private industrialists cannot afford to make such, huge investments. In case of railways, ship-building, energy producing concerns, etc., very huge investments is required which is beyond the means of private investors. Hence, government enters these fields and establish its own undertakings.

Question 5.
Write about the provision of public utilities by government.
Answer:
Government undertakes to provide various necessities like electricity, water, coal, gas, transport, communication facilities to the people. The aim is to provide these basic facilities at cheap rates. Private sector cannot be relied upon to provide these services. Moreover, there are chances of public exploitation in these services. So public utilities are provided by government undertakings.

Question 6.
Write a short note on accountability of a public corporation.
Answer:
A public corporation is accountable to the legislature, and also to the ministry mentioned in the special Act. Its accounts are audited by Comptroller and Auditor-General and the Annual report is presented to the Parliament or Legislature.

Question 7.
Mention the circumstances suitable for government company form of organisation.
Answer:
Government company form of organization . is suitable in the following circumstances.

1. When the government wants to take over an existing enterprise in ah emergency.
2. When the State wants to establish an undertaking in collaboration with private enterprises or with foreign countries
3. When there is a need for flexibility in the operations of the enterprises.
4. When the Government wishes to start the enterprises with a view of transferring it to private management later.

Long answer questions

Question 1.
Write a note on government companies.
Answer:

1. A company owned by central and /or state government is called a Government company. Either whole of the capital or majority of the shares are owned by the government.
2. According to Indian Companies Act, 1956, “Government company means any company in which not less than 51 % of the paid-up share capital is held by the central government or by any state governments or government or partly by the central government and partly by one or more state government and includes a company which is a subsidiary of a government company”.
3. Government companies are registered both as public limited and private limited companies but the management remains with the government in both cases. Government companies enjoy some privileges which are not available for non¬
   government companies. No special statute is required to form government companies.
4. Government companies enter those . fields where private investment is not forthcoming. Sometimes, government has to take over sick units in private sector.

Question 2.
What are the differences between public and private sector?
Answer:

Public sector	Private sector
Sufficient, unlimited resources; successful in mobilizing savings through banks, bonds etc.	Limited resources; The private sector is not successful in mobilising the resources of the country or from foreign countries for the economic development.
Checks concentration of economic power in the hands of few.	Leads to concentration of economic power in the hands of few individuals.
Develop those sectors which are neglected bv the private sector.	Develop those industries / sectors in which risk is less and returns is more.
Preserves national wealth.	Exploitation of natural resource like forests, mines etc., for personal advantage.
Brings in balanced growth; starts industries in backward areas.	Do not establish industries in backward areas.
Heavy, basic and defence industries are reserved for public sector.	Consumer goods industries, agriculture are in private sector.

Question 3.
Draw a flow chart of state enterprise with example.
Answer:

Question 4.
What are the merits and demerits of a government company?
Answer:
Merits of Government Company:

1. Easy to form: The formation of a government company is comparatively easy. No prior approval of the parliament/ legislature is required.
2. Flexibility in management: There is flexibility in running the business of the company. It can follow flexible policy to suit the changing, business conditions.
3. Freedom of action: It enj0ys a large measure of freedom in matters of finance, administration, and personnel. It can plan its own capital structure.
4. No government interference: It enjoys greater freedom and authority and is free from the protracted and time-consuming regulations of the Government. So, the government company can work just like any privately owned company.
5. Run-on commercial lines: Government companies are run on sound business lines. They earn surpluses to finance their own expansion.

Demerits of Government Company:

1. Political interference:
   In reality, government companies do not enjoy any autonomy in their activities. The interference of the Ministers has been very frequent. Every Government tries to nominate directors from its own political party and through these, companies are run on political consideration
2. Minority interest neglected: Since the government is the majority shareholder, the Government is able to impose its will on the management of such a company.
3. Lack of interest: The top position officials of the company are not dedicated to the success of the company as they are frequently transferred. The Board of Directors also does not have the necessary skill and experience to run the business on sound business lines.
4. Accountability: The Annual Audit Report placed before the Parliament reveal only financial matters. There is no accountability for the operational efficiency, administration, and personnel of the companies.
5. Red-tapism: These companies are dependent on the government for taking important policy decisions. Red-tapism in governments affects the working of these companies.

For Own Thinking

1. Name any two examples of Departmental undertaking business.
Answer:
Examples of Departmental undertaking:

1. Radio and Television.
2. Post and Telegraph.

2. Name any two examples of Public corporations. Examples of Public corporation:
Answer:

1. RBI – Reserve Bank of India.
2. UTI – Unit Trust of India.

3. Name any two examples of Government companies.
Answer:

1. Maruti Udyog.
2. BHEL – Bharath Heavy Electricals Limited.

For Future Learning

(i) Organise a debate in your class on the motion “Public Enterprises in India have failed to achieve their objectives”. Select a few good speakers for the purpose. State the points for and against the motion.
Answer:
Favorable:

1. Excessive government control.
2. Interference
3. Delay and Redtapism.
4. Tax burden to public
5. Inefficiency.

Unfavorable:

1. Proper use of funds
2. Source of income for the government.
3. Secrecy.
4. Useful to specific industries.

(ii) Recently a discussion on “The objectives of Public sector undertakings was organized by the Friends Circle, a private cultural, organization of the city of Chennai. One of the participants, Mr. Ramesh happened to be a social worker. He observed, “the objective of Public Enterprises is to serve the Society and not to earn profits”. Mr. Deepesh, an advocate, objected to Mr. Ramesh’s statement and gave his own viewpoint. Thus continued the discussion.
If you have participated in that discussion, what should have been your stand and why?
Answer:
Public enterprises not to earn profit. But run as commercial lines. Defense industries are looking after departmental undertakings. In an emergency situation, the private sector cannot cooperate with the government.
The objective of public sector undertakings is to serve society and not to earn profit.

Case Study

Case 1- You are a newly appointed MD of a foreign sector tourist Bus transport company.
Answer:
The management of the bus Transport undertaking of your city finds that its buses are not able to attract very many tourists. Private Mini-Buses are seen to be preferred by people on certain routes. As a result, the undertaking is incurring losses. Therefore, management wants to reformulate its price policy. As a CEO or MD, what advice can you give to it? Explain.
Answer:
My advice is first to attract the public because people like attractions. Tourist bus transport company earn profit.

Case 2- Mr.Sudhan is studying in B.Com, 1st year. His father, Mr.Somu is a leading businessman in Chennai. Somehow, Mr. Sudhan does not know anything about utilities. But he is to prepare a lesson for his class on this topic. He requests his father for help. His father tells Mr. Sudhan that Public utilities are no different from his own business except that these are controlled by the Government instead of private people. Meanwhile, Mr. Chandrasekaran a friend of Mr. Somu comes there. Mr. Chandrasekaran is an employee of Chennai Electricity Supply Undertaking. Mr. Chandrasekaran intervenes in the conversation going on between Mr. Somu and his son and holds that Mr. Sudhan is not correct; there are other special features of public utilities, too. Perform the characters of Mr, Sudhan, Mr. Somu, and Mr. Chandrasekaran and state your positions.
Answer:
Government undertakes to provide various necessities like electricity, water, coal, gas, transport, communication facilities to the people. Above public utility services given by public enterprises.
Characters of Somu: a businessman.
(i) Private business people pay tax regularly.
(ii) Government employees are paid, servants. So he cannot work efficiently.
Characters of Mr. Chandra Sekar: He is an employee of the Chennai Electricity supply board. He explains electricity is very important to the public electricity board supplies electricity to common people, Industries, and all trade.
Characters of Mr. Sudhan: He is a BCom student. He knows everything from his textbook and also his father is also a businessman. He is getting information about business from his father.

Multiple choice questions

1. PSE’s are organizations owned by:
(a) joint hindu family
(b) government
(c) foreign companies
(d) private entrepreneurs
Answer:
(b) government

2. Disinvestments of PSE.s implies:
(a) sale of equity shares to private sector/ public
(b) closing down operations
(c) investing in new areas
(d) buying shares of PSE’s
Answer:
(a) sale of equity shares to private sector/ public

3. In which form of public sector enterprise private individuals can also become shareholders?
(a) Departmental undertaking
(b) Government company
(c) Statutory corporation
(d) None of the above
Answer:
(b) Government company

4. Which of the following is most suitable when national security is of utmost importance?
(a) Departmental undertaking
(b) Government company
(c) Statutory corporation
(d) None of the above
Answer:
(a) Departmental undertaking

5. Steel Authority of India Limited (SAIL) is an example of:
(a) statutory corporation
(b) government company
(c) departmental undertaking
(d) none of the above
Answer:
(a) statutory corporation

6. “Which of the following has 51% of the capital from the government?
(a) Government Company
(b) Departmental Undertaking
(c) Statutory Corporation
(d) None of the above
Answer:
(a) Government Company

7. Which year brought a drastic change in the role of the public sector in India?
(a) 1951
(b) 1991
(c) 1956
(d) 2001
Answer:
(b) 1991

8. Memorandum of understanding (mou) is a term used in the context of:
(a) public-private partnership
(b) joint venture
(c) the changing role of the Public sector
(d) all of the above
Answer:
(d) all of the above

9. Since 1991 number of …….. has increased in India:
(a) departmental undertaking
(b) government company
(c) statutory corporation
(d) global enterprises
Answer:
(d) global enterprises

10. Which of the following is controlled and managed as per provisions of the statute under which it has been formed?
(a) Departmental undertaking
(b) Statutory corporation
(c) Government company
(d) None of the above
Answer:
(b) Statutory corporation

11. State enterprise is an undertaking owned and controlled by the:
(a) local government
(b) state government
(c) central government
(d) local or state or central government.
Answer:
(d) local or state or central government.

12. Example for the departmental undertaking is:
(a) industrial development bank of India
(b) all India radio and television
(c) state trading corporation
(d) Tamil Nadu state transport corporation
Answer:
(b) all India radio and television

13. Indian telephone industry is an example of:
(a) departmental organization
(b) public corporation
(c) government company
(d) joint venture
Answer:
(a) departmental organization

14. Red-Tapism affects the working of the:
(a) government companies
(b) departmental organization
(c) private companies
(d) foreign companies in India
Answer:
(a) government companies

15. Departmental undertaking can maintain in their working:
(a) cost-effectiveness
(b) secrecy
(c) discipline (irregularity)
Answer:
(b) secrecy

16. Government companies are managed by:
(a) ministers
(b) members of parliament
(c) board of directors
(d) higher officials
Answer:
(c) board of directors

17. A public corporation is accountable to the:
(a) board of directors
(b) government officials
(c) ministers
(d) legislature
Answer:
(d) legislature

18. If defense industries are owned by private individuals:
(a) profits will go the private entrepreneurs
(b) the security of the country will be safe
(c) defense secrets will be given out
(d) the country’s defense will be safe.
Answer:
(c) defense secrets will be given out

19. Government companies provide healthy competition to the:
(a) private sector
(b) public corporation
(c) co-operative society
(d) foreign companies
Answer:
(a) private sector

20. There is no competition to the business of:
(a) partnership
(b) joint-stock company
(c) sole trading concern
(d) departmental organization
Answer:
(d) departmental organization

21. Government companies are registered under:
(a) a special statute of government
(b) companies act, 1956
(c) royal charter
(d) order of the Government
Answer:
(b) companies act, 1956

22. In a public corporation the management has:
(a) limited freedom
(b) no freedom of action
(c) controlled freedom
(d) unrestricted freedom of action
Answer:
(c) controlled freedom

23. For the efficient working of state enterprise the form of organization generally considered suitable is:
(a) departmental organization
(b) public corporation
(c) government company
(d) none of these
Answer:
(b) public corporation

24. Public can also subscribe to the share capital of:
(a) public corporation
(b) departmental undertaking
(c) government company
(d) none of these
Answer:
(c) government company

25. In a government company the share capital of the government must hot be less than:
(a) 51%
(b) 60%
(c) 75%
(d) 90%
Answer:
(a) 51%

26. State enterprises are established to:
(a) implement economic policies of the government
(b) earn profit
(c) prevent the entry of private enterprises
(d) establish socialist society
Answer:
(a) implement economic policies of the government

27. This is an undertaking owned and controlled by Government:
(a) Sole tradership
(b) Partnership
(c) State enterprises
(d) Joint-stock companies
Answer:
(c) State enterprises

28. The aim of industrialization is to:
(a) achieve economic development
(b) develop all industries
(c) raise the income of the people
(d) raise the employment opportunities
Answer:
(b) develop all industries

29. The public corporation is managed by:
(a) board of directors
(b) civil servants
(c) directors
(d) managing Committee
Answer:
(a) board of directors

30. Government companies are managed by:
(a) Ministers
(b) Members of Parliament
(c) Board of Directors
(d) Higher officials
Answer:
(c) Board of Directors