MOCK PAPER

Class-XII
BUSINESS STUDIES [054]
Max. Time: 3 Hours Max. Marks: 80
General Instructions:
1. This question paper contains 34 questions.
2. Marks are indicated against each question
3. Answers should be brief and to the point
4. Answers to the questions carrying 3 marks may be from 50 to 75 words
5. Answers to the questions carrying 4 marks may be about 150 words
6. Answers to the questions carrying 6 marks may be about 200 words
7. Attempt all parts of the questions together.
1 In CROW Co. Ltd. The production and sales department have to coordinate their work, so that 1
production takes place according to the demand in the market. State the feature of coordination
highlighted here.
(a) Coordination integrates group efforts (b) Coordination ensures unity of action
(c)Coordination is a continuous process (d) Coordination is an all-pervasive function
2 Match the concept of management in Column I with their respective explanation in column II. 1
Column I Column II
A. Authority i. It refers to the right to take decisions inherent in a managerial
position to tell people what to do and expect them to do it.
B. Responsibility ii. Obligation of a subordinate to properly perform the assigned
duty
C. Accountability iii. Answerability for the final outcome of the assigned task.
(a) (i), (ii), (iii) (b) (i), (iii), (ii)
(c) (ii), (iii), (i) (d) (iii), (ii), (i)
3 “Titan” is the name for watches manufactured by the Tata Company. This is ________ 1
(a) Generic name (b) Trade Name, since it is legally protected
(c) The Brand Name, the part that is spoken (d) Brand Mark, which can be recognised.
4 Sajitha is one of the most successful managers of her company, ‘Kobe Ltd.’ She uses her creativity 1
and initiative in handling challenging situations at work. The knowledge gained by her during her
student days at a renowned management institute as well as through her observation and experience
over the years is applied by Sajitha in a skilful manner in the context of the realities of a given
situation. She often reads books and other literature in various fields of management to keep her
knowledge updated. An aspect of the nature of management is being highlighted in the above
description. Identify the aspect.
(a) Management as a science (b) Management as an art
(c) Management as a profession (d) Management is both art and science
5 According to Taylor, even a small production activity like loading pigs of iron into boxcars can be 1
scientifically planned and managed. This can result in tremendous saving of human energy as well as
avoiding wastage of time and materials. The more sophisticated the processes, greater would be the
savings. In the present context, the use of internet has brought about dramatic improvements in
internal efficiencies and customer satisfaction.
Identify the principle of scientific management highlighted above:
(a) Science, not rule of thumb
(b) Harmony, not discord
(c) Cooperation, not individualism
(d) Development of each and every person to his/her greatest efficiency
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6 Why did Fayol introduce the concept of Gang Plank in the principle of Scalar Chain? 1
(a) To avoid delay in communication
(b) To create formal lines of authority from top to bottom
(c) To improve effectiveness in communication
(d) Both a and b
7 Decisions rendered by various commissions and agencies at every level of the government is an 1
example of ____________ environment of business.
(a) Economic environment (b) Political environment
(c) Social Environment (d) Legal Environment
8 Due to spread of education during last 25 years, people have become aware of health care. As a 1
result, the demand for health projects and services is multiplying day by day. Which characteristic of
business environment is highlighted above?
(a) Certainty (b) Uncertainty
(c) Dynamic nature (d) Inter – relatedness
9 Which among the following is the correct impact of Demonetisation on private wealth and public 1
sector wealth?
(a) Private wealth decreased and public sector wealth increased
(b) No effect on private wealth and public sector wealth decreased
(c) Private wealth increased and public sector wealth decreased
(d) No effect on public sector wealth and private wealth decreased.
Read the following text and answer the question No. 10 – 13
Mr. Sanjay Kumar was the Chairman of Triumph Bank. The bank was earning good profits. Shareholders
were happy as the bank was paying regular dividends. The market price of their shares was also steadily
rising. The bank was about to announce taking over of Vedha Bank. Mr. Sanjay Kumar know that the
share price of Triumph Bank would rise on this announcement. Being a part of the bank, he was not
allowed to buy shares of the bank. He called one of his friend Sridhar and asked him to invest Rs. 5 crore
in shares of his bank promising him the capital gains.
As expected, the share prices went up by 40% and the market price of Sridhar’s shares was now ₹. 7 crore.
He earned a profit of ₹. 2 Crore. He gave ₹. 1 Crore to Mr. Sanjay Kumar and kept ₹ 1 Crore with himself.
On regular inspection and by conducting enquiries of the brokers involved, Securities Exchange Board of
India (SEBI) was able to detect this irregularity. The SEBI imposed a heavy penalty on Mr. Sanjay
Kumar. The SEBI further undertook various research programmes to improve the activities of capital
markets and streamline the functioning of stock exchange
10 Which function of SEBI is highlighted in the line, “On regular inspection and by conducting enquiries 1
of the brokers involved, Securities Exchange Board of India (SEBI) was able to detect this
irregularity?
(a) Regulatory (b) Protective (c) Developmental (d) Both a and b
11 Which function of SEBI is highlighted in the line, ‘The SEBI imposed a heavy penalty on Mr. Sanjay 1
Kumar’?
(a) Regulatory (b) Protective (c) Developmental (d) Both a and b
12 Which function of SEBI is highlighted in the line, “The SEBI further undertook various research 1
programme to improve the activities of capital markets and streamline the functioning of stock
exchange?
(a) Regulatory (b) Protective (c) Developmental (d) Both a and b
13 Which other function falls in the category of function identified in Q.No.12? 1
(a) Registration of players (b) Regulation of Intermediaries
(c) Investors’ protection (d) Training of intermediaries
14 Read the following statements – Assertion (A) and Reason (R): 1
Assertion (A): A large sized organisation can be totally decentralized.
Reason (R): As an organisation grows in size and complexity, there is a tendency to move towards
decentralized decision – making. Complete centralization would imply concentration of all decision-

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 making functions at the apex of the management hierarchy.
Select the correct alternative:
(a) Both Assertion (A) and Reason (R) are true.
(b) Both Assertion (A) and Reason (R) are false.
(c) Assertion (A) is true and Reason (R) is false.
(d) Assertion (A) is false and Reason (R) is true.
15 Directing prepares a framework for action and its implementation in the organisation. Which 1
characteristic of directing is highlighted here?
(a) Initiates action (b) Takes place at every level of management
(c) Continuous process (d) Flows from top to bottom
16 Now a days Closed Circuit Television (CCTV) is used in organisations as a means to control on 1
wrong behaviour and to prevent theft etc. Which point of importance of control does this illustrate?
(a) Accomplishing organisational goals (b) Making efficient use of resources
(c) Improving employee motivation (d) Ensuring order and discipline
Read the following text and answer question no. from 17 – 20
As a project work in Business Studies Subject, the Commerce students of Creative Public School thought of
setting up a recycling plant to recycle all the waste papers from the school and prepare exercise books to be
used by the school students. They approached their principal who not only appreciated the idea of the
students but also gave her consent for the same. The principal insisted that they must focus on quality
performance and features of their products. At the same time, production must be pollution free. The school
also decided to donate 50% of the revenue generated from the sale of registers and exercise books to a nearby
school for visually challenged children.
17 Identify the product related decisions to be taken by the children in the marketing of registers and 1
exercise books
(a) Deciding the price of registers and exercise books
(b) Deciding about the quality of registers and exercise books
(c) Deciding the brand name of registers and exercise books.
(d) All the above
18 Identify the communication tool most appropriate for promotion of registers and exercise books. 1
(a) Advertising (b) Sales promotion (c) Personal selling (d) Public Relations
19 Which of the following factor should be kept in mind while choosing the right name for the exercise 1
books and registers?
(a) It should be distinctive
(b) It should be adaptable to packaging or labelling requirements
(c) It should be short and easy to pronounce
(d) All the above
20 Identify the marketing philosophy discussed in the given case. 1
(a) The production concept (b) The product concept
(c) The societal marketing concept (d) Both b and c
21 ABC Ltd. is facing a lot of problems these days. The company’s profit margin is declining day by 3
day. The production manager is blaming marketing management, whereas marketing is blaming
production department for not maintaining the quality. Finance Department is blaming both. What
quality of management do you think is lacking here? Explain
22 Explain ‘Internship Training’ and Vestibule training and classify them as on the job and off the job 3
methods of training.
[OR]
Distinguish between Training and Development.
23 “Money market is essentially a market for short – term funds.” In the light of this statement, State any 3
three features of money market.
[OR]
Explain Certificate of Deposit as an instrument of money market.
24 Explain the following importance of controlling 3
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 (i) Accomplishing organisational goals
(ii) Making efficient use of resources
(iii) Ensuring order and discipline
25 Maslow’s need hierarchy is considered fundamental to understanding of motivation. State the 4
assumptions of Maslow’s needs theory of Motivation.
26 “Financial Planning is a financial blueprint of an organisation’s future operations.” Explain the twin 4
objectives of financial planning in the light of this statement.
27 Mohit is working with White Security Services Ltd. He is also recruiting security guards for the 4
company. The company provides security services in Delhi and Noida at short notice to various
companies. The guards are recruited on temporary basis. The guards provided by this company are
known for their honesty and punctuality. Mohit is well known in his village for providing employment
to unskilled people.
(i) Name the source of recruitment used by “White Security Services Ltd.”
(ii) State any one disadvantage of this source of recruitment.
(iii) Identify the need of Security Guards which is being fulfilled by the company as per Maslow’s
need hierarchy.
28 Who are not considered as consumers as per the Consumer Protection Act, 2019? 4
[OR]
Lakshay purchased a two litre bottle of packed juice. His wife started vomiting after drinking the
juice. Lakshay later saw that there were three insects inside the bottle. He complained about it to the
retailer. The retailer replied that he should contact the manufacturer. Despite making many
complaints in the company, he did not get any response.
(i) Identify and explain the two rights of Lakshay which have been violated.
(ii) Suggest him the appropriate authority where he could file his complaint.
29 Shriram is the manager in the Production department of Rockers Ltd., which is known for its 4
electronic products. All products are manufactured under Shriram’s guidance. The various activities
in the production department are initiated in accordance to his instructions. He is very clear and
specific in issuing instructions to his subordinates in order to ensure smooth working of the
department. He personally oversees the method followed by the workers for production of each item.
He misses no opportunity to praise his subordinates for their good work. All his team members feel
very happy and satisfied while working under his guidance. He provides constant guidance to them in
order to improve upon the quality and also encourages them to innovate and be more creative at their
work.
Identify various elements of Directing mentioned highlighted above by quoting the lines.
30 There are various factors to be considered while making an investment decision. Explain the factors in 4
the light of above statement.
[OR]
“The decision regarding dividend should be taken keeping in view the overall objective maximising
shareholder’s’ wealth.’ In the light the above statement, explain the following factors affecting the
dividend decision of a company:
(i) Shareholder’s’ preference
(ii) Amount of Earnings
(iii) Stability of Earnings
(iv) Cash Flow position
31 ‘Indian Drugs and Pharmaceuticals Ltd.’ is engaged in the manufacturing and distribution of 6
medicines. The company has set up an objective of increasing its sales turnover by 20%. To achieve
this objective the company has decided to diversify into baby health care products. Since the
company has already set its objectives and developed the premises based on the same, it wants your
help for the remaining steps to be taken in this process. Explain briefly these steps.

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32 Compare and Contrast Fayol and Taylor’s Principles of Management. 6
33 What do you mean by Packaging? Explain the various levels and any two functions of packaging. 6
34 E – Solutions Ltd. started its operations in the year 2000. At the time of its inception, the company 6
had only ten employees with two departments, a production department and an administration
department. The products supplied and the services provided by the company started gaining
popularity over the years. The management had faith in the abilities of the employees and thus they
allowed them freedom of action. The management recognised that the decision – makers at different
levels of organisation need to be given more autonomy. They took a policy decision that there will be
less control of supervisors over subordinates. This increased the role of the subordinates in the
organisation and now they were in a position to take numerous as well as important decisions. As a
result, its business has diversified into many areas. Presently, it has operations throughout the country
with seven branches overseas. Its organisational structure has now changed into divisional structure
and ten thousand people are working with the company.
I. Identify the concept of management which helped the company to diversify into many areas
and branches abroad.
II. Explain any five points of importance of the concept identified in (a) above.

PREPARED BY

NIRMAL SINGH RANA

PGT COMMERCE
SHRIJI BABA SARASWATI VIDYA MANDIR MATHURA
MOB: 09411967377

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 MOCK SAMPLE PAPER
Class-12
BUSINESS STUDIES [054]
Answer Key

Max. Time: 3 Hours Max. Marks: 80

1 (b). Coordination ensures unity of action 1
2 (a). (i), (ii), (iii) 1
3 (c) Brand Name, the part that is spoken 1
4 (b). Management is an art 1
5 (a). Science not rule of thumb 1
6 (a.) To avoid delay in communication 1
7 (d). Legal Environment 1
8 (d) Inter – relatedness 1
[OR]
(c). Changes in fashion
9 (d). No effect on public sector wealth and private wealth decreased. 1
10 (a). Regulatory 1
11 (b). Protective 1
12 (c). Developmental 1
13 (d). Training of intermediaries 1
14 (d) Assertion (A) is false and Reason (R) is true. 1
15 (a). Initiates action 1
16 (d). Ensuring Order and discipline 1
17 (c). Deciding the brand name of the registers and exercise books 1
18 (a). Advertising 1
19 (d). All the above 1
20 (d). Both b and c 1
21 The quality which is lacking in the above case is ‘Coordination’. The manager is able to execute all 3
the functions but he is unable to coordinate these functions and coordination is a mere function of
manager but it is the essence of management.
22 Internship Training – It is a joint programme of training in which educational institutions and 3
business firms cooperate. It is the on-the-job training.

Vestibule Training – Employees learn their jobs on the equipment they will be using, but the training
is conducted away from the actual work floor. It is the off-the-job training.

[OR]

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 TRAINING DEVELOPMENT
It is a process of increasing knowledge and skills. It is a process of learning and growth.
It is to enable the employee to do the job better. It is to enable the overall growth of the
employee.
It is a job-oriented process. It is a career-oriented process.
23 Features of Money Market: 3
i. It is a market for short term funds which deals in monetary assets whose period of maturity
is up to one year
ii. Money market instruments are highly liquid
iii. Money market instruments are less risky
[OR]
Certificate of Deposit:
It is a short term, unsecured, negotiable instrument issued by commercial banks or developmental
financial institutions to individuals, corporations and companies.
It issued during periods of tight liquidity when the deposit growth of banks is slow but the demand for
credit is high.

24 Importance of Controlling 3

1. Accomplishing organisational goals: It helps in accomplishing organisational goals by bringing

to light, deviations if any and indicating corrective action
2. Making efficient use of resources: It helps in making efficient use of resources by ensuring that
each activity is performed in accordance with pre – determined standards.
3. Ensuring order and discipline: It ensures order and discipline among employees by 4keeping a
close check on their activities.

25 Maslow’s theory is based on the following assumptions: 4

(i) People’s behaviour is based on their needs. Satisfaction of such needs influences their
behaviour.
(ii) People’s needs are in hierarchical order, starting from basic needs to other higher level needs.
(iii) A satisfied need can no longer motivate a person; only next higher level need can motivate
him.
(iv) A person moves to the next higher level of the hierarchy only when the lower need is
satisfied.

26 Objectives of financial planning: 4

a. To ensure availability of funds whenever required which involves estimation of the funds
required, the time at which these funds are to be made available and the sources of these funds.
b. To see that the firm does not raise resources unnecessarily as excess funding is almost as bad as
inadequate funding. Financial planning ensures that enough funds are available at right time.

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27 (i) External source of recruitment/Labour contractor 4
(ii) Disadvantages of external source of recruitment (Any one)
(a) It may lead to dissatisfaction among exiting employees as they may feel that their changes
of promotion are reduced.
(b) It is a lengthy process as the vacancies have to be notified and applications received
before selection.
(c) It is a costly process as a lot of money is spent on advertisement and processing of
applications
(iii) Basic physiological needs

28 Following persons are not considered as Consumers under Consumer Protection Act: 4
a. The person who obtains goods for re-sale
b. The person who uses the goods without the approval of the buyer
c. The person who avails of the services without the approval of the hirer
d. The person who obtains goods without consideration.
e. The person who hires or avails any services without any consideration.
[OR]
(i) Right to safety and right to be heard with explanation.
(ii) District commission

29 The various elements of Directing mentioned in the above case are as follows: 4

Elements of Directing

Communication Leadership

Motivation
Supervision

a. Communication – “He is very clear and specific in issuing instructions to his subordinates in
order to ensure smooth working of the department.”
b. Supervision – “He personally oversees the method followed by the workers for production of
each item.”
c. Motivation – “He misses no opportunities to praise his subordinates for their good work.”
d. Leadership – “He provides constant guidance to them in order to improve upon the quality and
also encourages them to innovate and be more creative at their work.”

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30 Factors affecting investment or capital budgeting decision 4

1. Cash flow of the project: whenever a company is investing huge funds in an investment proposal it
expects some regular amount of cash flow to meet day to day expenses. The amount of cash flow of an
investment proposal will be able to generate must be assessed properly before investing in the proposal
2. Return on investment: the most important criteria to decide the investment proposal is rate of
return it will be able to bring back for the company in the form of income.
3. Investment criteria: along with returns, risk, cash flow there are various other criteria which helps
in selecting an investment proposal such as availability of labour, technologies input machinery,
etcetera. The decision to invest in a particular project involves number of calculations regarding the
amount of investment, interest rate, cash flow and rate of return.
[OR]
Factors affecting dividend decision are as follows
(a) Shareholders’ Preference: While declaring dividends, managements must keep in mind the
preferences of the shareholders in this regard. If the shareholders in general desire that at least a
certain amount is paid as dividend, the companies are likely to declare the same. There are always
some shareholders who depend upon a regular income from their investments
(b) Amount of Earnings: Dividends are paid out of current and past earning. Therefore, earnings is
a major determinant of the decision about dividend.
(c) Stability Earnings: Other things remaining the same, a company having stable earning is in a
better position to declare higher dividends. As against this, a company having unstable earnings is
likely to pay smaller dividend
(d) Cash Flow Position: The payment of dividend involves an outflow of cash. A company may be
earning profit but may be short on cash. Availability of enough cash in the company is necessary
for declaration of dividend.
31 Following are the steps in the planning process. 6

1 Identifying alternative course of action

2 Evaluating alternative courses:

Planning
Process 3 Selecting alternative

4 Implementation of plan

5 Follow – up action:

1. Identifying alternative course of action – Once objectives are established and assumptions
are made, then the next step is to determine alternative courses of action which may be used to
achieve the set objectives. There is hardly any plan for which alternatives do not exist.
Generally, there are many alternatives to achieve the objectives and the manager must know all
the ways to reach the objectives.
2. Evaluating alternative courses: The next step is to weigh the pros and cons of each
alternative. The positive and negative aspects of each proposal are evaluated in the light of the
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 objective to be achieved.
3. Selecting alternative – This step involves selection of the best alternative. This is the real
point of decision making.
4. Implementation of plan – This is the step where other managerial functions also come into the
picture. Implementing the plan is concerned with putting the plan into action.
5. Follow – up action: It means o see whether plans are being implemented and activities are
performed according to the plans.
32 Basis Henri Fayol F W Taylor 6
1. Perspective Top Level Management Shop floor level of a factory
2. Unity of command Taylor did not follow this principle He was strict follower of the
and stressed on minimum eight principle of unity of command.
bosses.
3. Applicability Applicable universally Applicable to specialised situations.
4. Basis of formation Personal experience Observations and experimentation
5. Focus Improving overall administration Increasing productivity
6. Personality Practitioner Scientist
7. Expression General Theory of Administration Scientific Management

33 Packaging refers to the act of designing and producing the container, box or a wrapper of a product. 6

Levels of Packaging –
 Primary Packaging- It refers to the product’s immediate container. Like- Toothpaste tube.
 Secondary Packaging- It refers to the additional package, which provides additional layer
protection to the product. Like-Cardboard box or toothpaste.
 Transportation Packaging-it refers to further packing, which is necessary to protect the
product in the process of transportation and storage.

Functions of packaging.- (any TWO)

 Product identification – Packaging helps in identification of the product out of various
products. It contains brand, features of the product etc.
 Product protection – Packaging protects the products from spoilage, damage, leakage,
pilferage, humidity etc.
 Facilitating use of the product-The size and shape of the package should be convenient to
open, handle and use for consumers.
 Product promotion – Packaging acts as a good salesman as it promotes the product and
increases it sale.

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34 I. Decentralization 6
II. Importance of Decentralization:
(1) Develops Initiative among the subordinates: Decentralisation helps the lower level
managers to take all those decisions, which are for the improvement of enterprise, on
their own and to develop appropriate solutions for solving different kinds of difficulties
or problems they face.
(2) Develop managerial talent for future: Under decentralisation, managers working at
middle level and lower level learn the art of taking independent decisions. It provides
them a chance to prove their talent by handling various assignments independently.
(3) Quick Decision Making: It helps in quick decision – making as there is no requirement
for approval from many levels.
(4) Relief to top management: Decentralisation diminishes the amount of direct
supervision exercised by a superior over the activities of a subordinate because they are
given the freedom to act within the prescribed limits
(5) Facilitates Growth: Decentralisation provides considerable liberty to the managers at
lower level. This allows them to do the work in a manner best suited to their
department.
(6) Better Control: It leads to better control by evaluating performance at each level of
management.

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