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TN State Board 11th Commerce Model Question Paper 2 English Medium


  1.  The question paper comprises of four parts.
  2.  You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
  3. questions of Part I, II. III and IV are to be attempted separately
  4. Question numbers 1 to 20 in Part I are objective type questions of one -mark each. These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
  5. Question numbers 21 to 30 in Part II are two-marks questions. These are to be answered in about one or two sentences.
  6. Question numbers 31 to 40 in Parr III are three-marks questions, These are to be answered in about three to five short sentences.
  7. Question numbers 41 to 47 in Part IV are five-marks questions. These are to be answered) in detail. Draw diagrams wherever necessary.

Time: 2\(\frac{1}{2}\) Hours
Maximum Marks: 90

Part – I

Choose the correct answer. Answer all the questions: [20 × 1 = 20]

Question 1.
Production which involves several stages for manufacturing finished products is known as …………
(a) Analytical industry
(b) Synthetic industry
(c) Processing industry
(d) None of these
(c) Processing industry

Question 2.
The classification of companies on the basis of incorporation are …………
(i) Chartered companies
(ii) Public companies
(iii) Statutory companies
(iv) Private companies
(a) (i) and (ii)
(b) (i) and (iii)
(c) (ii) and (iv)
(d) (i) and (iv)
(b) (i) and (iii)

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 3.
Which of the following helps in maximizing sale of goods to society?
(a) Business success
(b) Laws and Regulations
(c) Ethics
(d) Professional Management
(c) Ethics

Question 4.
An organisation carrying out activities to move goods from the producer to consumers is …………
(a) Transport
(b) Logistics
(c) Channels
(d) Marketing
(a) Transport

Question 5.
A Co-operative fails because of …………
(a) Unlimited Membership
(b) Cash trading
(c) Mismanagement
(d) Loss making
(c) Mismanagement

Question 6.
Activities undertaken out of love and affection or with social service motive are termed as:
(a) Economic activities
(b) Monetary activities
(c) Non-economic activities
(d) Financial activities
(c) Non-economic activities

Question 7.
The largest commercial bank of India is …………
(a) ICICI Bank
(b) SBI
(c) PNB
(d) RBI
(b) SBI

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 8.
Match List – I with List – II and select the correct answer using the codes given below:
List – I
(i) Bonded warehouses
(ii) Private warehouses
(iii) Refrigerated warehouses
(iv) Special commodity warehouses

List – II
1. Private Business enterprise
2. Tobacco, Cotton
3. Non-payment of customers duty
4. Cold storages

(a) (i) 1, (ii) 2, (iii) 3, (iv) 4
(b) (i) 3, (ii) 1, (iii) 4, (iv) 2
(c) (i) 3, (ii) 2, (iii) 4, (iv) 1
(d) (i) 2, (ii) 1, (iii) 3, (iv) 4
(b) (i) 3, (ii) 1, (iii) 4, (iv) 2

Question 9.
Small shops which deal in a particular line of products are called as …………
(a) Market traders
(b) Single line stores
(c) Supermarket
(d) Street market
(b) Single line stores

Question 10.
Which one of the following is correctly matched?
(а) Income Tax – Indirect tax
(b) Internal trade – Within the boundaries of a nation
(c) SGST – Direct tax
(d) Export trade – Home trade
(b) Internal trade – Within the boundaries of a nation

Question 11.
………… banks were nationalised in India, in the year 1969.
(a) 20
(b) 14
(c) 6
(d) 21
(b) 14

Question 12.
The Institutional warehouse started with the support of the Government is …………
(a) Bonded warehouse
(b) Public warehouse
(c) Food Corporation of India
(d) Custom Bonded
(c) Food Corporation of India

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 13.
A partner neither contribute capital, nor he is entitled to manage the business is known as …………
(a) Active Partner
(b) Dormant partner
(c) Nominal Partner
(d) Secret Partner
(c) Nominal Partner

Question 14.
The primary objective of the state enterprise is to …………
(a) Earn profit
(b) Provide employment
(c) Serve the people
(d) All the above
(c) Serve the people

Question 15.
The basic principle of Insurance is …………
(a) Insurable interest
(b) Co-operation
(c) Subrogation
(d) Proximate causa
(b) Co-operation

Question 16.
Buying and selling of goods through electronic network is known as …………
(a) E-commerce
(b) Internet
(c) Website
(d) Trade
(a) E-commerce

Question 17.
The members in the Joint Hindu family are called …………
(a) Karta
(b) Co-parceners
(c) Generations
(d) Partners
(b) Co-parceners

Question 18.
The oldest form of organisation in public sector is …………
(a) Public Sector undertakings
(b) Departmental undertakings
(c) Multinational corporations
(d) Statutory corporation
(b) Departmental undertakings

Question 19.
Which one helps in announcing the arrival of new products and their uses to the people?
(a) Advertising
(b) Banking
(c) Trade
(d) Transport
(a) Advertising

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 20.
Which one is internal source of finance?
(a) Retained earnings
(b) Shares
(c) Debentures
(d) Public deposits
(a) Retained earnings


Answer any seven questions in which Question No. 30 is compulsory. [7 x 2 = 14]

Question 21.
What do you mean by balance of trade?
Balance of trade denotes the difference between the value of import and the value of export during a year.

Question 22.
What is meant by statutory company?
Companies established by a Special Act passed in a Parliament or Assembly is known as Statutory company. It is also called as Statutory Corporation, (e.g.,) LIC, Food Corporation of India and RBI.

Question 23.
What is income Tax?
Income tax is a direct tax under which tax is calculated on the income, gains or profits earned by a person such as individuals and other artificial entities (a partnership firm and company etc.).

Question 24.
What is GATT?
The General Agreement on Tariffs and Trade (GATT) was signed at Geneva on 30th October 1947 by 23 countries. It came into effect on 1st January 1948.

Question 25.
Joint Hindu family is created by Hindu law. The membership of this form of business is acquired by birth. Who will look after the business in this kind?
‘Karta’ is the head of the family and he looks after the Joint Hindu Family Business. He is also called as the manager. The Karta is entitled to deal with outsiders.

Question 26.
What are the non-corporate enterprises?

  • Sole trading concern
  • partnership firm
  • Joint Hindu family business

Question 27.
What is meant by limited liability?
The liability of a shareholder is limited. The risk of loss is limited to the unpaid amount on the face value of shares held.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 28.
Write any two advantages of water transport.

  • It is considered as the cheapest mode of transport among the other modes of transport.
  • It is most suitable for heavy loads.

Question 29.
Define the term Assessee.
Assessee means a person by whom any tax or any other sum of money is payable under Income Tax Act. It includes every person in respect of whose income is assessed every year.

Question 30.
What is a Self Help Group?
Rural development is one of the main pillars of progress of India. It has lagged behind in many aspects of development even after six decades of the independence of India. Self Help Group has emerged as a new model for combating poverty.


Answer any seven questions in which Question No. 40 is compulsory. [7 x 3 = 21]

Question 31.
Write any three characteristics of sole proprietorship.

  • Ownership by one man:
    This is owned by single person. The sole trader contributes the required capital. He is not only the owner of the business but also manages the entire affairs.
  • Freedom of work and Quick Decisions:
    Since an individual is himself as a owner, he need not consult anybody else. Hence he can take quick decisions.
  • Unlimited Liability:
    When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

Question 32.
Explain the features of Self Help Groups.
Features of Self Help Groups:

  • The motto of every self help group members should be “Saving first – Credit later”.
  • Self help group is homogeneous in terms of economic status.
  • The ideal size of a self help group ranges between 10 and 20 members.

Question 33.
What is meant by pathways transport?
Pathways transport is the oldest form of transport found in hilly areas, forest areas and in remote places. These are used by human beings for transport.

Question 34.
Distinguish between Extractive industries and Genetic industries.

Extractive Industries:

  • These industries extract or draw out products from natural sources.
  • Extractive industries supply some basic raw materials that are mostly products of geographical or natural environment.

Genetic Industries:

  • These industries remain engaged in breeding plants and animals for their use in further reproduction.
  • The seeds, nursery companies, poultry, diary, piggery, hatcheries, nursery, fisheries and apiary, etc.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 35.
Write a short note about state warehousing corporation.
State Warehousing Corporation (SWC):
Every state government is given power to establish its own Warehousing Corporation after getting approval from the Central Warehousing Corporation (CWC). 50% of the capital is contributed by the CWC and the balance 50% contributed by State Government.

Question 36.
What is the need for corporate governance?
Corporate Governance is the system by which businesses are directed and controlled in the best interests of all stakeholders. It maintains balance among individual goals, societal goals, economic goals and social goals. Good corporate governance enables corporate success and economic development.

Tamil Nadu 11th Commerce Model Question Paper 1 English Medium

Question 37.
What is bill of lading?
Bill of Lading refers to a document signed by ship owner or to his agent mentioning that goods specified have been received and it would be delivered to the importer or his agent at the port of destination, if in good condition subject to terms and conditions mentioned therein.

Question 38.
Write any three demerits of UGST.

  • Several Economists says that GST in India would impact negatively on the real estate market. It would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.
  • Another criticism is that COST, SGST are nothing but new names for Central Excise/ Service Tax, VAT and CST. Hence, there is no major reduction in the number of tax layers.
  • A number of retail products currently have only four percent tax on them. After GST, garments and clothes could become more expensive.

Question 39.
Write a note on housing co-operatives.
The co-operative housing societies are meant to provide residential accommodation to their members. People who want to build houses of their own join together and form housing societies.


  • They advance loans to members to build houses.
  • Instead of granting loan, they construct houses for their members.

Question 40.
Explain the term NEFT.
National Electronic Fund Transfer (NEFT) was launched by the RBI in 2005. Under this electronic funds transfer system, bulk transfer of transactions are settled in batches during specific timings across India. Individuals and institutions which maintain accounts with a NEFT enabled bank branch are eligible for using NEFT.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Part – IV

Answer all the questions. [7 x 5 = 35]

Question 41 (a).
Write a note on consumer co-operative society.
Consumer co-operatives are organized by consumers that want to achieve better prices or quality in the goods or services they purchase. In contrast to traditional retail stores or service providers, a consumer co-operative exists to deliver goods or services rather than to maximize profits from selling those goods or services.

Nationally, the most, widely used co-operative form is the credit union, with some 90 million members. Credit union assets have grown a hundred-fold in three decades. Credit unions are essentially co-operatives of people that use banking services. Students’ co-operative stores, co-operative provision stores, supermarkets set up on co-operative societies of India are examples of this type.


Question 41 (b).
What is meant by prospectus? Explain any six contents of the prospectus.
According to Section 2(36) of the Companies Act, any document inviting the public to buy its shares or debentures comes under the definition of prospectus. It also applies to advertisements inviting deposits from the public. A prospectus is “the only window through which a prospective investor can look into the soundness of a company’s venture”.

  • The prospectus contains the main objectives of the company.
  • The name and address of the signatories of the Memorandum of Association.
  • The name, address and occupation of directors and managing directors.
  • The number and classes of shares and debentures.
  • Name and address of the auditors, bankers and solicitors of the company.
  • Time and place where copies of balance sheets, profits and loss account and the auditor’s report may be inspected.

Question 42 (a).
Explain services rendered by wholesalers to retailers.

  1. Financial Assistance:
    Wholesalers provide financial assistance to retailers by selling goods on credit.
  2. Meeting the Requirements:
    Due to limited capital and lack of space in his facility a retailer cannot hold large variety of products.
  3. Introduction of New Products:
    Wholesalers bring new products and their uses to the notice of retailers.
  4. Price Stability:
    Wholesalers reduce price fluctuations by adjusting supply and demand and save the retailers from loss arising from price fluctuations.
  5. Economy in Transport:
    A wholesaler often delivers goods at the door steps of retailers and save their time and cost of transport.
  6. Regular Supply:
    Wholesalers keep large stock of varieties, of goods and provide a regular supply of goods as per the retailer’s need.


Question 42 (b).
Describe the importance of international trade.

  1. International finance helps in calculating exchange rates of various currencies of nations and the relative worth of each and every nation in terms thereof.
  2. It helps in comparing the inflation rates and getting an idea about investing in international debt securities.
  3. It helps in ascertaining the economic status of the various countries and in judging the foreign market.
  4. International Financial Reporting System (IFRS) facilitates comparison of financial statements made by various countries.
  5. It helps, in understanding the basics of international organisations and maintaining the balance among them.

Question 43 (a).
Partnership is formed by agreement. It is desirable to have a written agreement. What is the name of the agreement? Explain the contents of it.
(1) Name:
Name of the Firm.

(2) Nature of Business:
Nature of the proposed business to be carried on by the partners.

(3) Duration of Partnership:
Duration of the partnership business whether it is to be run for a fixed period of time or whether it is to be dissolved after completing a particular venture.

(4) Capital Contribution:
The capital is to be contributed by the partners. It must be remembered that capital contribution is not necessary to become a partner for, one contribute his organizing power, business acumen, managerial skill, etc., instead of capital.

(5) Withdrawal from the Firm:
The amount that can be withdrawn from the firm by each partner.

(6) Profit / Loss Sharing:
The ratio in which the profits or losses are to be shared, If the profit sharing ratio is not specified in the deed, all the partners must share the profits and bear the losses equally.

(7) Interest on Capital:
Whether any interest is to be allowed on capital and if so, the rate of interest.

(8) Rate of Interest on Drawing:
Rate of interest on drawings, if any.

(9) Loan from Partners:
Whether loans can be accepted from the partners and if so the rate of interest payable thereon.

(10) Account Keeping:
Maintenance of accounts and audit.

(11) Salary and Commission to Partners:
Amount of salary or commission payable to partners for their services. (Unless this is specifically provided, no partner is entitled to any salary).

(12) Retirement:
Matters relating to retirement of a partner. The arrangement to be made for paying out the amount due to a retired or deceased partner must also be stated.

(13) Goodwill Valuation:
Method of valuing goodwill on the admission, death or retirement of a partner.

(14) Distribution of Responsibility:
Distribution of managerial responsibilities. The work that is entrusted to each partner is better stated in the deed itself.

(15) Dissolution Procedure:
Procedure for dissolution of the firm and the mode of settlement of accounts thereafter.

(16) Arbitration of Dispute:
Arbitration in case of disputes among partners. The deed should provide the method for settling disputes or difference of opinion. This clause will avoid costly litigations.


Question 43 (b).
Explain any five principles of Co-operatives.
(1) Voluntary and Open Membership:
Cooperatives are voluntary organizations, open to all people able to use its services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

(2) Democratic Member Control:
Cooperatives are democratic organizations controlled by their members – those who buy the goods or use the services of the cooperative who actively participate in setting policies and making decisions.

(3) Member’s Economic Participation:
Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.

(4) Autonomy and Independence:
Cooperatives are autonomous, self-help organizations controlled by their members. If the cooperative enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the members and maintains the cooperative’s autonomy.

(5) Education, Training, and Information:
Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperative. Members also inform the general public about the nature and benefits of cooperatives.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 44 (a).
State the constraints of barter system.
(1) Lack of double coincidence of wants:
Unless two persons who have surplus have the demand for the goods possessed by each other, barter could not materialize. If this “coincidence of wants” does not exist, Barter cannot take place.

(2) Non-existence of common measure of value:
Barter system could not determine the value of commodities to be exchanged as they lacked commonly acceptable measures to evaluate each and every commodity.

(3) Lack of direct contact between producer and consumers:
It was not possible for buyers and sellers to meet face to face in many contexts for exchanging the commodities for commodities.

(4) Lack of surplus stock:
Absence of surplus stock was one of the impediments in barter system. If the buyers and sellers do not have surplus then no barter was possible.


Question 44 (b).
RBI is the central bank of our country. It is the apex bank and also controls the other banks. The functions of RBI can be grouped under three heads:
A. Leadership and Supervisory functions
B. Traditional functions
C. Promotional functions
Explain any five traditional functions of RBI:
Traditional Functions of RBI:
(1) Banker and Financial Advisor to the Government:
The RBI accepts money into the Central and State Governments’ accounts and makes payments on their behalf. It advises the government on the quantum, timing and terms of new loans.

(2) Monopoly of Note Issue:
The RBI is the sole authority to print and issue all currency notes in India except one rupee note. One rupee note and all coins are issued by the Ministry of Finance.

(3) Banker’s Bank:
The relationship between RBI and other banks in the country is just like the relationship of a commercial bank with its customers. All commercial banks can receive loans from RBI by rediscounting of bills.

(4) Controller of Credit and Liquidity:
Controlling the credit money in circulation and the interest rate in the country is a major function of RBI.

(5) Lender of the Last Resort:
In times of emergency, any bank in India can approach RBI for financial assistance. RBI provides them credit.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 45 (a).
Explain the advantages of warehousing.

  • It safeguards the stock for the merchants who do not have storage place.
  • Warehouses reduce the distribution cost of the traders by storing the goods in bulk and allow the trader to take the goods in small lots to his shop.
  • It helps in selection of channel of distribution. The producer will prefer whether to a wholesaler or retailer.
  • It assists in maintaining the continuous sale and avoid the possibilities of “Out of Stock”.
  • It creates employment opportunities for both skilled and unskilled workers to improve their standard of living.


Question 45 (b).
Explain the principles of insurance.
(1) Utmost Good Faith:
According to this principle, both insurer and insured should enter into contract in good faith. Insured should provide all the information that impacts the subject matter. Insurer should provide all the details regarding insurance contract.

(2) Insurable Interest:
The insured must have an insurable interest in the subject matter of insurance. Insurable interest means some pecuniary interest in the subject matter of the insurance contract.

(3) Indemnity:
Indemnity means security or compensation against loss or damages. In insurance, the insured would be compensated with the amount equivalent to the actual loss and not the amount exceeding the loss. This principle ensures that the insured does not make any profit out of the insurance. This principle of indemnity is applicable to property insurance alone.

(4) Causa Proxima:
The word ‘Causa proxima’ means ‘nearest cause’. According to this principle, when the loss is the result of two or more cause, the proximate cause, i.e., the direct. The direct, the most dominant and most effective cause of loss should be taken into consideration. The insurance company is not liable for the remote cause.

(5) Contribution:
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.

(6) Subrogation:
Subrogation means ‘stepping the shoes on others’. According to this principle, once the claim of the insured has been settled, the ownership right of the subject matter of insurance passes on to the insurer.

(7) Mitigation:
In case of a mishap, the insured must take off all possible steps to reduce or mitigate the loss or damage to the subject matter of insurance.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

Question 46(a).
Banks can be classified as follows:
(a) Based on the functions of banks
(b) Based on the status given by RBI
(c) Based on the ownership pattern
What are the banks based on functions? Explain any five kinds of banks.
(1) Commercial banks:
Banks which accept deposits from the public and grant loans to traders, individuals, agriculture, industries, transport, etc., in order to earn profit. Their lending is in comparatively small amounts and mostly for short and medium period. e.g., State Bank of India.

(2) Development Banks:
Huge finance required for investment, expansion and modernisation of big industries and others are granted by a separate type of banks called development banks. They are also called industrial banks, e.g., IFCI and SIDBI.

(3) Co-operative Banks:
All cooperative banks in India are owned by its customers or members who are farmers, small traders and others. Co-operative banks in India are either urban based or rural based, e.g., NAFED and Tamil Nadu State Apex Co-operative Bank – Head Office, Chennai.

(4) Foreign Banks:
Banks which have registered office in a foreign country and branches in India are called foreign banks, e.g., Bank of America – USA.

(5) Regional Rural Banks (RRBs):
The RRBs were formed under the Regional Rural Bank Act 1976, jointly by the Central Government, State Government, and a sponsor bank. e.g., Pandian Grama Bank.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium


Question 46 (b).
In India, Joint Hindu Family Business is a distinct form of organisation. A person can become member by birth. What are the features of Joint Hindu Family Business? Explain any five features.
Features of Joint Hindu Family Business are:

  1. Governed by Hindu Law
  2. Management
  3. Membership by birth
  4. Liability
  5. Permanent existence
  6. Implied authority of Karta
  7. Minor as a co-parcener;
  8. Dissolution


  1.  Governed by Hindu law:
    The business of the Joint Hindu Family is controlled and managed by the Hindu law.
  2. Membership by birth:
    The membership of the family can be acquired only by birth. As soon as a male child is bom in the family, the child becomes a member.
  3.  Liability:
    Except the Kartha, the liability of all other members is limited to their shares in the business.
  4. Minor also as a co-parcener:
    In a Joint Hindu Family firm, even a new bom baby can be a co-parcener.
  5.  Dissolution:
    It can be dissolved only at the will of the members of the family.

Question 47 (a).
What are the contents of Memorandum of Association?
(1) Name Clause:
The name clause requires you to state the legal and recognized name of the company. You are allowed to register a company name only if it does not bear any similarities with the name of an existing company.

(2) Situation Clause:
The registered office clause requires you to show the physical location of the registered office of the company. You are required to keep all the company registers in this office in addition to using in handling all the outgoing and incoming communication correspondence.

(3) Objective Clause:
The objective clause requires you to summarize the main objectives for establishing the company with reference to the requirements for share holding and use of financial resources. You also need to state ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives.

(4) Liability Clause:
The liability clause requires you to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving. You should show that shareholders are liable only to their shareholding and/or to their commitment to contribute to the dissolution costs upon liquidation of a company limited by guarantee.

(5) Capital Clause:
The capital clause requires you to state the company’s authorized share capital, the different categories of shares and the nominal value (the minimum value per share) of the shares. You are also required to list the company’s assets under this clause.

Tamil Nadu 11th Commerce Model Question Paper 2 English Medium

(6) Association Clause:
The association clause confirms that shareholders bound by the MOA are willingly associating and forming a company. You require seven members to sign an MOA for a public company and not less than two people for a MOA of a private company. You must conduct the signing in the presence of witness who must also append his signature.


Question 47 (b).
Explain the various kinds of deposits accepted by commercial banks.
Broadly deposit accounts can be classified into demand deposits and time deposits.
(A) Demand Deposits:
These deposits are repayable on demand on any day. This consists of savings deposits and current deposits.

  1. Savings Deposits:
    General public deposit their savings into this account. This account can be opened in one individual’s name or more than one name.
  2. Current Deposits:
    This account is suitable for business institutions. Individuals too can open this account. A higher minimum balance should be kept in this account.

(B) Time Deposits:
These include fixed deposits and recurring deposits which are repayable after a period.

  1. Fixed Deposits (FD):
    Certain amount is deposited for a fixed period for a fixed rate of interest.
  2. Recurring Deposits (RD):
    Certain sum is deposited into the account every month for one year or five years or the agreed period. Interest rate is more than savings deposits and almost equal to fixed deposits.

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