Sure Shot Questions: Business Services | Business Studies (BST) Class 11 - Commerce PDF Download

Based on a careful analysis of the previous years' questions and trends, we've put together a list of questions that are most likely to appear in the Class 11 Business Studies exams. These predictions aren’t just guesses—they’re based on how often these questions show up and how CBSE usually frames its papers.

Q1: Explain the concept of warehousing and describe three key functions it performs in business.
Ans: Warehousing involves the systematic storage of goods to maintain their quality, value, and utility until they are needed for sale or use. It serves as a critical logistical service, ensuring goods are available at the right time and place. 

Functions: 
(i) Storage: Warehouses store goods and raw materials not immediately required, protecting them from damage or spoilage, e.g., storing grains to supply markets year-round. 
(ii) Consolidation: Warehouses combine goods from multiple production units into a single shipment for efficient delivery, e.g., consolidating electronics from different factories for a retailer. 
(iii) Price Stabilization: By balancing supply with demand, warehousing prevents price fluctuations, e.g., storing surplus crops during harvest to release gradually, maintaining stable market prices.

Q2: Define financial services and briefly explain three types available to businesses.
Ans: Financial services are economic services provided by financial institutions to facilitate business operations, investments, and capital management. 
Types: 
(i) Loan Syndication: Involves multiple banks pooling funds to provide large loans to borrowers, e.g., a company securing a syndicated loan for a major project. 
(ii) Venture Capital: Provides funding to startups in exchange for equity, supporting innovative businesses, e.g., investing in a tech startup for growth. 
(iii) Factoring: Involves selling accounts receivable to a third party to raise immediate cash, e.g., a retailer selling invoices to a factor to meet urgent expenses.

Q3: Differentiate between services and goods, highlighting their key characteristics.
Ans: Services are intangible economic activities requiring direct interaction between provider and consumer, without involving physical production, e.g., banking or legal advice. Goods are tangible, physical products whose ownership transfers to the buyer upon purchase, e.g., machinery or clothing. 
Characteristics of Services: 
(i) Intangibility: Services cannot be touched or stored, only experienced, e.g., a consultation’s value lies in the advice given. 
(ii) Inseparability: Services are produced and consumed simultaneously, e.g., a haircut requires the presence of both barber and client. 

Characteristics of Goods: 
(i) Tangibility: Goods can be seen and stored, e.g., a phone can be held and kept. 
(ii) Transferability: Ownership transfers upon sale, e.g., a car becomes the buyer’s property after purchase.

Q4: Describe the three main types of marine insurance and the risks they cover.
Ans: Marine insurance protects against losses from sea perils. 

Types: 
(i) Cargo Insurance: Covers risks to goods during sea transport, e.g., damage to electronics due to water exposure, ensuring compensation for cargo loss. 
(ii) Hull Insurance: Protects the ship itself against damages from perils like storms or collisions, e.g., repairing a vessel damaged in a storm. 
(iii) Freight Insurance: Compensates the shipping company for lost freight revenue if cargo is damaged or lost, e.g., covering unpaid freight costs if cargo is destroyed in transit.

Q5: Define services and explain three distinct characteristics with examples.
Ans: Services are intangible economic activities requiring direct interaction between provider and consumer, tailored to meet specific needs, e.g., banking or medical consultation. 

Characteristics: 
(i) Intangibility: Services cannot be touched or stored, only experienced, e.g., a lawyer’s advice cannot be physically held. 
(ii) Inseparability: Production and consumption occur simultaneously, e.g., a teacher must be present with students during a lesson. 
(iii) Inconsistency: Service quality varies based on provider and consumer expectations, e.g., a haircut’s quality depends on the barber’s skill and client preferences.

Q6: Explain the terms ‘double insurance’ and ‘reinsurance,’ highlighting their differences.
Ans: 

• Double Insurance: Occurs when an individual insures the same property with multiple insurers, but can only claim the actual loss, shared proportionally among insurers, e.g., insuring a shop for ₹10 lakh with two insurers, claiming only the loss amount. 
• Reinsurance: Involves an insurer transferring part of their risk to another insurer, e.g., an insurance company reinsuring a high-value policy to mitigate risk exposure. 
• Differences: Double insurance involves multiple policies by the insured, while reinsurance is a contract between insurers. In double insurance, the insured claims directly, but in reinsurance, the original insurer claims from reinsurers. Double insurance limits claims to actual loss, while reinsurance distributes risk without affecting the insured’s claim.
  
  

Q7: Discuss three key services provided by warehouses and their importance to businesses.
Ans: Warehouses provide critical logistical services to businesses. 

Services: 
(i) Storage: Protects goods from damage, enabling businesses to store surplus stock, e.g., storing perishable fruits to supply during off-seasons. 
(ii) Break the Bulk: Divides large shipments into smaller quantities for distribution, e.g., breaking down a truckload of goods for retail stores, reducing costs. 
(iii) Financing: Warehouse receipts can be used as collateral for loans, helping businesses access funds, e.g., a trader using stored goods’ receipts to secure a bank loan. These services ensure supply chain efficiency, cost savings, and financial flexibility.

Q8: Explain the role of insurance in business and describe three benefits it provides.
Ans: Insurance mitigates financial risks in business by compensating for losses due to unforeseen events. 

Benefits: 
(i) Indemnity: Compensates for losses from events like fire, e.g., covering repair costs for a factory damaged by fire, ensuring business continuity. 
(ii) Risk Sharing: Distributes risk among many policyholders, reducing the financial burden on a single business, e.g., spreading fire loss across insured firms. 
(iii) Protection: Offers peace of mind by safeguarding against financial losses, e.g., insuring inventory against theft, allowing confident operations.

Q9: What is e-banking? Discuss three advantages it offers to businesses.
Ans: E-banking refers to conducting financial transactions like fund transfers or balance checks via electronic platforms, such as mobile apps or websites. 

Advantages: 
(i) 24/7 Availability: Enables businesses to access banking services anytime, e.g., transferring funds at midnight for urgent payments. 
(ii) Convenience: Allows transactions from anywhere using devices like laptops, e.g., paying suppliers without visiting a bank. 
(iii) Reduced Workload: Automates transactions, reducing manual processes for banks and businesses, e.g., online bill payments save time for a retailer.

Q10: Define merchant banking and explain three services provided by merchant bankers.
Ans: Merchant banking involves financial intermediaries managing capital issues and corporate restructuring. 

Services: 
(i) Issue Management: Assists companies in issuing shares or bonds, e.g., preparing a prospectus for a public offering. 
(ii) Underwriting: Guarantees the sale of securities, ensuring funds for the issuer, e.g., underwriting a company’s IPO. 
(iii) Corporate Advisory: Provides guidance on mergers, acquisitions, or restructuring, e.g., advising a firm on merging with a competitor to expand market share.

Q11: Discuss three telecom services that enhance business operations with examples.
Ans: Telecom services facilitate communication and data transfer for businesses. 

Services: 
(i) Cellular Mobile Service: Supports voice, text, and data transfer, e.g., a sales team coordinating with clients via mobile calls. 
(ii) DTH Service: Delivers media content via satellite, e.g., a retail store using DTH for in-store promotional broadcasts. 
(iii) VSAT Service: Enables data transfer to remote locations, e.g., a mining company using VSAT to connect remote sites with headquarters for real-time updates.

Q12: Explain three types of bank accounts and their suitability for different users.
Ans: 
(i) Current Account: Offers high liquidity with no transaction limits, ideal for businesses needing frequent transactions, e.g., a retailer managing daily supplier payments. 
(ii) Savings Account: Provides interest and flexibility for deposits/withdrawals, suitable for individuals saving surplus income, e.g., a salaried employee saving monthly earnings. 
(iii) Recurring Deposit Account: Allows fixed monthly deposits for a set period, ideal for disciplined savers, e.g., a student saving ₹2,000 monthly for future expenses.

Q13: Describe the role of commercial banks in supporting businesses with three key functions.
Ans: Commercial banks support businesses by managing financial transactions. 

Functions: 
(i) Lending Funds: Provide loans or overdrafts to meet business needs, e.g., a loan for a factory to purchase machinery, earning banks interest. 
(ii) Accepting Deposits: Manage savings, current, or fixed deposits, paying interest, e.g., a business depositing daily earnings in a current account. 
(iii) Fund Transfers: Facilitate quick and secure money transfers, e.g., a company paying suppliers via bank drafts, ensuring efficient transactions.

Q14: What is the principle of indemnity in insurance? Explain its application with an example.
Ans: The principle of indemnity ensures that insurance compensates only for the actual loss suffered, preventing profit from claims. It applies to non-life insurance like fire or marine policies. Example: If a shop insured for ₹20 lakh suffers fire damage worth ₹10 lakh, the insurer pays ₹10 lakh, not the full insured amount, ensuring the shop owner is restored to their pre-loss financial position without gaining profit.

Q15: Explain the role of the Indian Postal Department in providing business services with three examples.
Ans: The Indian Postal Department supports businesses through financial and communication services. 

Examples: 
(i) Financial Facilities: Offers savings schemes like Public Provident Fund (PPF), enabling businesses to invest surplus funds securely, e.g., a small retailer investing profits in PPF. 
(ii) Parcel Services: Facilitates shipping of goods, e.g., an e-commerce business sending products to customers via postal parcels. 
(iii) Speed Post: Ensures fast delivery of documents or goods, e.g., a company sending urgent contracts to clients, enhancing operational efficiency.