Previous Year Short Questions With Answers - Internal Trade Commerce Notes | EduRev

Business Studies (BST) Class 11

Commerce : Previous Year Short Questions With Answers - Internal Trade Commerce Notes | EduRev

The document Previous Year Short Questions With Answers - Internal Trade Commerce Notes | EduRev is a part of the Commerce Course Business Studies (BST) Class 11.
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Q. 1. ‘Retailer is an important link in the channel of distribution.’ Explain the services he provides to the consumer.
Ans. 
Services provided by the retailer to the customers are as follows:
(i) Regular availability of the goods: Retailers maintain regular availability of variety of product from different manufacturers. This helps the customers to buy the products of their choice as and when they require.
(ii) Information about the goods: By effectively displaying the goods and through personal selling efforts; retailers provide important information about the arrival of the new goods, their special features etc. thus helps them in making their purchase decision.
(iii) Convenience in buying: Firstly, retailers are situated very nearer to the residential areas and remain open for long hours. Secondly, retailers sell the goods of desired variety in small quantity according to customers requirement therefore, providing convenience to customers.
(iv) Wider choice: Retailers generally keep stock of wide variety of goods, produced by different manufacturers. This enables the customers to make their choice out of the wide variety available to select the best good.

Q. 2. Describe any four functions of retailers.
Ans.
The functions of retailers are as follows:
(i) Financing: Retailers provide goods to the consumers on credit basis. This increases the level of consumption and hence the standard of living.
(ii) Supplying market information: Since the retailer is in direct contact with the consumers, he provides information regarding their tastes, preferences and attitudes, etc. to the wholesaler. This information helps them in taking important marketing decisions
(iii) Convenience in buying: Retailers provide goods to the consumers according to their requirements. Usually, they are situated near the residential areas and remain open for long hours.
(iv) Risk bearing: A retailer has to bear the risk if the change in style and fashion occurs when the goods are stored in large quantities in the warehouses.

Q. 3. Mention any three services provided by the retailer to the consumer.
Ans. The services provided by the retailer to the consumer are as follows:
(i) Convenience in buying: Retailers provide goods to the consumers according to their requirements. Normally, they are situated near the residential areas and remain open for long hours.
(ii) Wide selection: Generally, the retailers keep large varieties of products of different manufacturers. So, they offer wide selection to the consumers.
(iii) New product information: The retailers through their personal skills, efforts and effective display of products, provide information about the arrival, special features, etc. of new products to the customers. This helps the consumers in deciding the purchase of those goods.

Q. 4. If retail shops are eliminated, what difficulties do you think consumers will face?
Ans. If there is no retail shop, a consumer will face a number of difficulties which are stated below:
(i) Without a retail shop, a consumer cannot get continuous supply of commodities.
(ii) It will be difficult to have a wide choice to purchase variety of goods manufactured by various manufacturers.
(iii) A consumer will miss the personalised services and credit facilities provided by retailers.
(iv) A consumer will miss the after-sale services provided by the retail shops.

Q. 5. What are the objectives of GST?
Ans. 
Objectives of GST are:
(i) To eliminate the cascading impact of taxes on production and distribution cost of goods and services.
(ii) Streamlining indirect tax regime.
(iii) Growth of revenue in States and Union.
(iv) Reduction in transaction costs and unnecessary wastages.
(v) Elimination of the multiplicity of taxation.

Q. 6. Name few State and Central taxes which are included in GST.
Ans. 
(i) State Taxes
(a) VAT/Sales tax
(b) Entertainment Tax (unless it is levied by local bodies)
(c) Luxury Tax
(d) Taxes on lottery, betting and gambling.
(e) State cesses and surcharges in so far as they relate to supply of goods and services.
(f) Entry tax not in lieu of octroi.
(ii) Central Taxes
(a) Central Excise Duty.
(b) Additional Excise Duty.
(c) The Excise Duty levied under the medical and Toiletries Preparation Act
(d) Services Tax.
(e) Surcharges
(f) Cesses

Q. 7. Write a short note on fixed shop retailers.
Ans. 
(i) The retailers who have permanent establishments for carrying out business activities are known as fixed shop retailers.
(ii) They are the most common type of retailers found in market place.
(iii) They deal in consumer durable as well as non durable products.
(iv) They operate on a large scale and have greater resources.
(v) They offer various services to the customers like home delivery, repairs, credit facilities, etc.
(vi) Fixed shop retailers are generally of two types: Small retailers, Large retailers.

Q. 8. If retail shops are eliminated, what difficulties do you think consumers will face?
Ans. 
If there is no retail shop, a consumer will face a number of difficulties which are stated below:
(i) Without a retail shop, a consumer cannot get continuous supply of commodities.
(ii) It will be difficult to have a wide choice to purchase variety of goods manufactured by various manufacturers.
(iii) A consumer will miss the personalised services and credit facilities provided by retailers.
(iv) A consumer will miss the after-sale services provided by the retail shops.

Q. 9. “Spencers”, “Big Apple” and “Big Bazar” are examples of which type of fixed shop (large store)? Give any two merits of these types of stores.
Ans.
“Spencers”, “Big Apple” and “Big Bazar” are examples of departmental stores. A departmental store is a large retail outlet offering a wide variety of products, classified into well-defined departments under one roof. The main aim of this store is to satisfy all the needs of the customers.
Merits: (i) Convenience in buying: Departmental stores, provide great convenience to customers by offering a large variety of products of their requirements at one place.
(ii) Attract large number of customers: Being centrally located, these stores are able to attract a large number of customers.

Q. 10. State the limitations of departmental stores.
Ans. 
The limitations of departmental stores are as follows:
(i) Lack of personal attention: Large size of the store makes it difficult to provide adequate personal attention to the customers.
(ii) High possibility of loss: Due to large-scale operations, the possibility of losses are high in these stores.
For example, in case of change in fashion, the store has to sell the out-of-fashion goods in clearance sale at heavy discounts.
(iii) High operating cost: Because of the various services offered by the store to its customers, the operating cost is high. High operating cost increases the price of the goods and hence these stores are not attractive for lower income groups.
(iv) Inconvenient location: Since these stores are centrally located, it is not convenient for the purchase of goods required immediately.

Q. 11. What are the limitations of multiple shops?
Ans. 
The limitations of multiple shops are as follows:
(i) Limited selection of goods: These stores sell range of goods produced in their organisations only. Thus, they offer limited choice of goods.
(ii) Lack of personal touch: Sometimes, indifferences and lack of personal touch arise in the employees due to lack of incentives.
(iii) Problems of change in demand: The management has to bear heavy losses when the demand for their goods changes rapidly. This is because a large amount of stock remains unsold at the central office.
(iv) Lack of initiative: The branch managers are required to follow the instructions received from the head office. Thus, they become habitual of seeking the guidance of head office in all matters. This kills their initiative to make use of their creative skills.

Q. 12. Enlist any four main features of chain stores.
Ans. 
Some of the important features of chain stores are given below:
(i) Location: These shops are located in fairly populous locality to serve the customers at a point which is nearest to their residence.
(ii) Centralised manufacturing: The manufacturing/ procurement of merchandise for all the retail units is centralised at the head office.
(iii) Supervision by Branch Manager: Each retail unit works under the supervision of branch manager who sends daily reports to the head office in relation to cash deposits, requirement of stock, etc.
(iv) Pricing policy: The prices of goods in such shops are fixed and uniform for all the units and sales are made on cash basis.

Q. 13. Departmental stores make shopping convenient, Comment.
Ans. Yes, departmental stores make shopping convenient due to following advantages:
(i) These stores are located at central places.
(ii) These stores offer a large variety of goods under one roof.
(iii) These stores provide attractive services of restrooms, etc.

Q. 14. (i) Identify the type of retail selling in which goods are supplied to the customers without the help of middlemen and without customers undertaking journey to the retailer. 
(ii) Enlist any three merits of such retail business.
Ans. (i) This is mail order retailing, also known as shopping by post.
(ii) Mail order business offers following benefits:
(a) Elimination of middlemen which results in lots of savings for both buyers and sellers.
(b) It does not require heavy expenditure on building and other infrastructure. Therefore, it can be started with limited capital.
(c) Since the mail order business does not extend credit facilities to the customers, there is no risk of bad debts to them.

Q. 15. What is meant by Internal Trade?
Ans.
(i) Buying and selling of goods and services within the boundaries of a nation is referred to as internal trade.
(ii) No custom duties or import duties are levied on such trade as goods are part of domestic production and are meant for domestic consumption.
(iii) Internal trade can be categorised into two broad categories:
(a) Wholesale trade
(b) Retail trade

Q. 16. Specify the characteristics of Fixed shop retailers.
Ans. 
Characteristics of fixed shop retailers are:
(i) They have greater resources as compared it itinerant traders.
(ii) These retailers may be dealing in different products.
(iii) They have greater credibility in the minds of customers.

Q. 17. What purpose is served by the wholesaler by providing warehousing facilities?
Ans. 
Wholesalers keep the goods assembled by them in their warehouses to supply them to retailers whenever they require. This service is provided by the wholesaler by providing ware-house facilities.

Q. 18. How does market information provided by the wholesalers benefit the manufacturers.
Ans.
A wholesaler provides information regarding the preferences and expectations of the customers to the manufacturer. He also collects information regarding the products of the competitor price of his product, etc. Wholesalers make suggestions about the type and quality of goods required by the consumers. Such information helps the producer to regulate production according to the changing requirements of the consumers.

Q. 19. How does the wholesaler help the manufacturer in availing the economies of scale?
Ans. 
Economies of scale refer to benefits of operating on a large scale. Wholesalers help the manufacturers to avail the benefits of large-scale operations as wholesalers buy goods in large quantity. They buy in bulk which enables manufacturers also to produce in bulk and avail benefits of large-scale production.

Q. 20. Distinguish between single line stores and specialty stores. Can you identify such stores in your locality?
Ans. 
Single line stores are those stores which deal in one line of product only; for example, sweet shop, chemist shop, garment shop, Stationary shop etc. Specialty stores are those stores which deal in particular product of one line of product.
For example, sweet shops dealing in Bengali sweets only, garment shop selling jeans only. Yes, we can identify such stores in our locality.

Q. 21. How would you differentiate between street traders and street shops?
Ans. Street shops are those shops which are situated in street crossings or on the main road or on corners of colonies. Street traders are those retailers who display their articles on busy street corners, pavements, bus stands, etc.

Q. 22. What are the services offered by retailers to wholesalers and consumers?
Ans. 
Services of retailers :
(i) To wholesalers
(a) Help in distribution of goods
(b) Personal selling
(c) Enabling large – scale operations
(d) Collecting market information
(e) Help in promotion
(ii) To consumers
(a) Regular availability of products
(b) New products information
(c) Convenience in buying
(d) Wide – selection
(e) After – sales services
(f) Provide credit facilities.

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