Long Answer Questions: Business Services | Business Studies (BST) Class 11 - Commerce PDF Download

Q1: Describe briefly Types of warehouses?
Ans: Warehousing is the process of keeping things in a systematic and orderly way in order to preserve their worth and quality. Warehouses provide not only storage but also logistical services by locating the appropriate amount in the right place at the right time and at the right price.
The different types of warehouses are:

• Private Warehouses: Large manufacturers and merchants own and run private warehouses to meet their own storage needs. Big businesses who require a lot of storage space on a regular basis and can afford it build and manage their own warehouses.
• Public Warehouses: A public warehouse is a specialised business entity that charges a fee for providing storage facilities to the general public. An individual or a cooperative organisation may own and operate it. It operates under a government-issued license and follows all applicable rules and regulations. Small producers and traders can store their goods for free in public warehouses. To assure the safe custody of commodities, these warehouses are well-built and guarded 24 hours a day, seven days a week. Public warehouses are typically found around railway, highway, and canal intersections.
• Duty-paid Warehouses: If an importer encounters any difficulties in transporting goods after paying duty, the products can be housed at a duty-paid warehouse. All duty-paid warehouses are open to all importers and are public warehouses. Importers benefit from duty-paid warehouses because the items are properly cared for and processed, such as sorting and repacking.
• Government Warehouses: The federal and state governments, as well as public authorities, own, administer, and control these warehouses. Because owning a warehouse is difficult for small farmers, businesses, and traders, these government warehouses aid them in storing their goods for a fee.
• Co-operative Warehouses: Co-operative societies own, manage, and administer these warehouses. They mostly provide warehousing services at the most affordable prices. Farmers, traders, and the general public benefit greatly from these types of warehouses.
• Cold storage warehouses: Cold storage warehouses are used to store perishable goods such as fruits, flowers, vegetables, dairy products, and other perishable items. Goods are held and chilled at extremely low temperatures in cold storage facilities in order to preserve them and utilize them in the future. These warehouses have made international trade possible.

Q2: A factory owner gets his stock of goods insured, but he hides the fact that 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 ?
Ans: No, he cannot claim the compensation. This is because he has hidden a very crucial fact about his factory wirings. Therefore, he has violated the principle of Utmost Good faith.
This principle states that the insurance contracts require that both parties act with the utmost good faith. This means that both parties must provide all relevant information honestly and completely. This not only measures the level of risk, but also helps insurance companies accurately price premiums for insurance applicants. Insurance policies can be declared null and void if an applicant provides wrong representation of material fact that was relied on by the insurance company.

Q3: Write notes on the RTGS system and NEFT. Also, state the difference between them.
Ans: The notes are:

• NEFT: The acronym NEFT stands for National Electronic Funds Transfer. It is an internet technique for moving payments within India from one banking institution to another (usually banks). The system was introduced in November 2005, and it was designed to take over the SEFT clearing system's query bank. NEFT is a Deferred Net Basis system, in which transactions are packaged and deferred for a defined period of time. Also, in NEFT, the transactions are processed in batches with no minimum and maximum limits.
• RTGS: The abbreviation RTGS stands for Real Time Gross Settlement. RTGS is a real-time gross funds transfer system that allows money to travel from one bank to another in real time. RTGS is the fastest way to transfer money when using the banking method. The term 'real-time' refers to the lack of a waiting period in the payment process, as the transaction will be finished, as soon as the processing is done. Also, gross settlement means a transfer is performed one by one, without being grouped with other transactions.

Following are the Difference Between RTGS and NEFT:


Q4: Divya Garments Ltd. has a loan of Rs. 10,00,000 to pay. They are short of funds so they are trying to find means to arrange funds. Their manager suggested claiming from the insurance company against stock lost due to a fire in the warehouse. He actually meant that they can put their warehouse on fire and claim from an Insurance company against stock insured. They will use the claim money to pay the loan.
(a) Will the company receive a claim if the surveyor from the company comes to know the real cause of the fire?
Ans: No, the company will not be reimbursed if the surveyor discovers the true cause of the fire, and the contract will be voided.
(b) Which values did the company ignore while planning to arrange money from the false claims?
Ans: When attempting to arrange money from a false claim, the principle of utmost good faith is disregarded. Insurance contracts demand that both parties operate in the best interests of the other. This means that both parties must provide all relevant information honestly and completely. This maintains impartiality while also assisting insurance firms in appropriately pricing premiums for applicants. If an applicant makes a major fact deception that the insurance company relies on, the policy might be deemed null and void.
Hence, the values disregarded are trust, honesty and transparency.
(c) Explain three elements of fire insurance.
Ans: There are three aspects to fire insurance:

• Insurable Interest: The insured must have an insurable interest in the insurance's subject matter. The insurance contract is void if there is no insurable interest.
• Utmost Good Faith: When providing information to the insurance company about the subject matter of the policy, the insured should be accurate and honest .
• Indemnity: The contract for fire insurance is a rigorous indemnity contract. In the case of a loss, the insured can sue the insurer for the full amount of the loss. This is subject to the maximum amount of insurance coverage for the subject matter.

Q5: Write a detailed note on various facilities offered by the Indian Postal Department and different types of telecom services offered?
Ans: The Indian Postal and Telegraph Department provides a variety of postal services throughout the country.
Facilities provided by Indian Postal Department 

• Financial facilities: 
  Post offices provide a range of savings options to the general public. These facilities are provided through the post office's savings schemes like:
  • Public Provident Fund (PPF)
  • Kisan Vikas Patra
  • National Saving Certificate (NSC)Recurring Deposit Scheme
  • Fixed Deposit Scheme 
• Mail facilities: 
  Mail services include:
  • Parcel facilities: They make it easier to transport an item from one location to another.
  • Registration services: These services ensure that the article being sent is secure.
  • Insurance facilities: These cover the risks associated with postal transmission.
• The following are some of the mail services supplied by banks:
  • Postcards: This is the least expensive method of mail delivery.
  • Letter: It is enclosed in an envelope and guarantees the confidentiality of the information communicated.
  • Registered mail: Registered mail ensures that the mail sent to the recipient is delivered or returned to the sender if it is not.
• Additional Services: 
  Greeting cards, media mail, international money transfers, speed mail, passport services, and e-billing services are also offered by these departments.

Telecom Services

• Cellular mobile service: This includes voice and non-voice transmission, as well as data transmission.
• Radio paging service: This is a one-way communication system that sends out information in the form of a tone, numeric, or alphanumeric message.
• Fixed-line service: This type of service entails the installation of fibre optic cables across the nation for the transmission of data, including voice and non-voice communications.
• Cable service: This service transmits media-related information to a designated operational region for which a licence has been obtained. The information flow is one-way with this sort of telecom service.
• VSAT service: VSAT stands for "Very Small Aperture Terminal" and refers to a satellite-based communication service that allows information to be sent to far-flung and remote locations. As a result, businesses benefit from a broader reach and greater flexibility.
• DTH service: DTH stands for Direct-To-Home, and it is a form of telecommunications service provided by DTH providers. Customers receive TV channels through satellites from the corporations. Customers may watch several channels by connecting their television to a tiny dish antenna and a set-top box.

Q6: State Six Difference Between Life Insurance, Fire Insurance, and Marine Insurance?
Ans: The difference between Life Insurance, Fire Insurance, and Marine Insurance is:




Q7: Explain in detail the principles of Insurance?
Ans: Insurance is a service that protects you from certain sorts of risks that can occur as a result of unforeseeable circumstances. It provides confidence to individuals by offering a set amount of money in the event of death or damage to personal property. In exchange for this assurance, the insured must pay a premium. The concepts of insurance on which insurance contracts are built are as follows:

• Principle of Absolute good faith: Both the insurer and the insured must believe in each other and the contract they have signed. For example, if Rahul has a heart condition, he should tell his insurance firm about it while purchasing a life insurance policy.
• Principle of Insurable interest: The insurable interest requires that the owner of a particular insurance policy has an insurable interest in the subject matter of the insurance policy. For example, a wife having insurable interest in her husband’s life due to financial dependency, a person’s interest in his property etc.
• Principle of Indemnity: The goal of an insurance contract, according to the indemnity principle, is to restore the insured to the same financial position as before the loss. to he or she For example, if a person loses Rs. 1 lakh in a fire, the insurance company will only accept a claim up to Rs. 1 lakh and not more.
• Principle of Proximate cause: The proximate cause insurance principle states that the nearest or closest cause should be considered, and the insurance company will compensate only for the causes that have been mentioned in the insurance contract, or any proximate causes, and not the remote causes of damage. For example, if a person is injured in a fire, this should be included in the contract so that the individual may collect the insurance benefits.
• Principle of Subrogation: Once the compensation is paid, the insurer gains ownership of the damaged item, preventing the insured from profiting from the sale of the damaged property. For example, if a person receives Rs. 1 lakh for a damaged stock, the stock's ownership will be transferred to the insurance company, and the person will no longer have control over the stock.
• Principle of Contribution: If an individual purchases many insurance policies for the same item, the insurers will pool their resources to reimburse the insured for the real loss. If a person A insures his or her home for Rs. 2 lakh with insurance B and Rs. 1 lakh with another insurer, say C, then in the event of a loss of Rs. 90,000, insurer B and insurer C will pay A Rs. 90,000 in total and no more.
• Mitigation: The insured shall treat the insured thing with the same care as he or she would if the insurance were not present. For example, if a person obtains fire insurance, he or she should take all reasonable steps to minimise property damage in the event of a fire, just as he or she would have done if the insurance had not been purchased.