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TN State Board 11th Commerce Model Question Paper 3 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.
Coca-cola company is an example of ………….
(a) MNC
(b) Govt Company
(c) Joint Venture
(d) Public company
(a) MNC

Question 2.
A Government company purchases shares in the name of ………….
(a) Prime minister
(b) President
(c) Chief Justice of India
(d) State Chief Minister
(b) President

Question 3.
The terms used in insurance are ………….
(i)) Nomination
(ii) Fixed Deposit
(iii) Indent
(iv) Surrender value
(a) (i) and (ii)
(b) (i) and (iv)
(c) (iii) and (iv)
(d) (ii) and (iii)
(b) (i) and (iv)

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 4.
The partnership deed is also called ………….
(a) Articles of Association
(b) Articles of partnership
(c) Partnership Act
(d) Partnership
(b) Articles of partnership

Question 5.
A warehouse holds goods as a center ………….
(a) marketing
(b) storing
(c) distribution
(d) selling
(c) distribution

Question 6.
Match List – I with List – II and select the correct answer using the codes given below:
List – I
(i) Chain stores
(ii) Market traders
(iii) Speciality stores
(iv) Auctioneers

List – II
1. Internal trader
2. Mercantile agent
3. Fixed shop large retailers
4. ixed shop small retailers

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

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 7.
Which of the following is not a land transport?
(a) Bullock cart
(b) Tramways
(c) Air transport
(d) Railway transport
(c) Air transport

Question 8.
The main benefits of logistics is ………….
(a) productivity
(b) cost minimisation
(c) profitability
(d) storage
(b) cost minimisation

Question 9.
…………. In Joint Hindu family business, how one gets the membership?
(a) By agreement
(b) By birth
(c) By investing capital
(d) By Managing
(c) By investing capital

Question 10.
Co-operative fails because of ………….
(a) Unlimited Membership
(b) Cash trading
(c) Mismanagement
(d) Loss-making
(c) Mismanagement

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 11.
Occupation of an engineer is ………….
(a) Employment
(b) Business
(c) Profession
(d) Sole proprietor
(b) Business

Question 12.
Hindrance of risk is removed by ………….
(a) Transport
(b) Insurance
(c) Warehouse
(d) Advertisement
(b) Insurance

Question 13.
Which of the following is not an electronic banking function?
(a) NEFT
(b) RTGS
(c) ECS
(d) Safety lockers
(d) Safety lockers

Question 14.
…………. is an acknowledgement of receipt of goods issued by dock authorities to the owner of the goods.
(a) Dock receipt
(b) Dock warrant
(c) Warehouse warrant
(d) Delivery order
(a) Dock receipt

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 15.
Investment limit of micro enterprise under manufacturing sector does not exceed lakhs.
(a) 10
(b) 20
(c) 25
(d) 50
(c) 25

Question 16.
The main aim of home trade is ………….
(a) To raise the standard of living
(b) To provide the essential goods and services economically
(c) To raise the national income
(d) To obtains all type of goods
(b) To provide the essential goods and services economically

Question 17.
Day market is called as ………….
(a) Angadi
(b) Market
(c) Nalangadi
(d) Allangadi
(c) Nalangadi

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 18.
In which form, the owner, establisher and manager is only one?
(a) Joint enterprise
(b) Govt company
(c) Co-operative society
(d) Sole proprietor
(d) Sole proprietor

Question 19.
Re-export trade is otherwise called as trade.
(a) Entrepot
(b) Export
(c) Import
(d) Foreign
(a) Entrepot

Question 20.
The Head quarters of WTO is located at ………….
(a) New york
(b) London
(c) Geneva
(d) Brazil
(c) Geneva


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

Question 21.
What is meant by Allangadi?
The night market was called as Allangadi according to Saint Poet Ilango in Silapathigaram, Madurai-Kanchi.

Question 22.
An organization which is formed voluntarily for the public service ‘One man – One vote’ principle is followed in this organization. What is that organization? Write a short note about this.
It is a co-operative organisation. Co-operative organisation is formed for the service of the members. It can be voluntarily organised by the public. In this organisation, man is given importance than money.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 23.
Who is called Karta?
All the affairs of a Joint Hindu Family are controlled and managed by one person who is known as‘Karta or Manager’.

Question 24.
Write a note on ECS.
Electronic Clearing Service (ECS) was launched by the RBI in 1995. It is an electronic method of fund transfer from a bank to another bank.

Question 25.
What do you mean by industry?
Industry refers to economic activities, which are connected with conversion of resources into useful goods. The production side of business activity is referred as industry.

Question 26.
Who is a sleeping partner?
A sleeping partner is the one who contributes capital and shares in the profits or losses of the firm but does not take part in the management of the business.

Question 27.
Write the meaning of the term ‘bank’.
In simple words, bank is an institution, which deals in money and credit. The Bank, normally refers to Commercial Bank.

Question 28.
What is a crop insurance?
This policy is to provide financial support to farmers in case of a crop failure due to drought or flood. It generally covers all risks of loss or damages relating to production of rice, wheat, millets, oil seeds and pulses, etc.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 29.
What do you mean by Articles of Association?
Articles of Association is a secondary document which contains the purpose, duties and responsibilities of the members. It has to be filed with the registrar of companies at the time of forming the company. It contains the details of the internal management of the company.

Question 30.
What is Mutual funds?
An individual investor, who wants to invest in equities and bond with a balance of risk and return generally can invest in mutual funds. Nowadays people invest in stock markets through a mutual fund.


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

Question 31.
What is meant by Government company?
A “Government company” is defined under Section 2(45) of the Companies Act, 2013 as “any company in which not less than 51% of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company”.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 32.
Explain any three features of public corporation.
A public corporation is a form of public enterprise, which is created by a special Act of Parliament or State Legislature.

  1. Special Statute:
    It is created by a special Act of the Parliament or the State Legislature. The Act defines its objectives, functions and relations to the ministry.
  2. Separate Legal Entity:
    A public corporation is a separate legal entity with perpetual succession and common seal.
  3. Capital Provided by the Government:
    The capital of a public corporation is provided by the government or by agencies of the government.

Question 33.
Who can demand performance?

  1. Promisee – Only a promisee can demand performance and not a stranger demand performance of the contract.
  2. Legal Representative – Legal representative can demand Exception performance. Contrary intention appears from the contract. Contract is of a personal nature.
  3. Third party – Exception to “stranger to a contract”.

Question 34.
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 good condition subject to terms and conditions mentioned therein.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 35.
Write short notes on:
(a) Industry
(b) Employment
(a) Industry:
It includes all those business activities which are connected with raising, production or processing of consumer goods. Example – bread, butter and shoes.

(b) Employment:
It refers to the occupation in which people work for others and get remuneration in the form of wages or salaries. Example – manager, clerk, bank official.

Question 36.
What are the different modes of discharge by implied consent?
Different modes of discharge by implied consent are:
(a) Novation
(b) Alteration
(c) Recession
(d) Remission
(e) Accord and Satisfaction
(f) Waiver
(g) Merger

Question 37.
State two disadvantages of franchising.
(1) Franchising fees:
The initial franchising fee and the subsequent renewal fee can be very high in case of successful businesses. From the franchisee’s point of view, this may be a deterrent.

(2) Fixed royalty payment:
The franchisee has to make payment of royalty to the franchiser on a regular basis. This considerably reduces the income of the franchisee.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 38.
Who is a del-credere agent?
The agent who guarantees to the principal the collection of cash from credit sales is called ‘del-credere agent’. If they do not pay the agent would bear the loss himself. He is given an additional commission known as del-credere commission bearing the risk.

Question 39.
Point out any three objectives of WTO.

  1. Improving the standard of living of people in member countries.
  2. Making optimum utilization of world’s resources for sustainable development of member countries.
  3. Promoting an integrated more viable and durable trading system in the sphere of international business.

Question 40.
What are the contents of indent?
Contents of an Indent:
(a) Quantity of goods sent
(b) Design of goods
(c) Price
(d) Nature of packing shipment
(e) Mode of shipment
(f) Period of delivery
(g) Mode of payment

Part – IV

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

Question 41(a).
Dissolution of firm means dissolution of partnership. In this, the business comes to an end. Dissolution of partnership means the termination of the original partnership agreement. Explain the circumstances of dissolving the partnership through court.
Dissolution of partnership means that the business comes to an end. It may be dissolution of firm, or dissolution of partnership.
Dissolution of firm is taken in two ways:

  1. Without order of the court
  2. With the order of the court

Dissolution with the older of the court: The court may order dissolution of a firm at a suit of a partner in any of the following circumstances:
(a) When a partner becomes insane.
(b) Permanent incapacity of any partner.
(c) Misconduct of any partner.
(d) Breach of agreement which makes the business impracticable.
(e) Transfer of interest to third person.
(f) Continued loss.
(g) When the court finds that it is just and equitable to dissolve the firm.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium


Question 41 (b).
Explain any five general utility functions of commercial banks.
Secondary functions of commercial banks can be classified into agency services and general utility services.

General Utility Functions:

  1. Issue of demand drafts and bankers’ cheques:
    Demand drafts and Bankers’ cheques are issued to public and customers. Instead of sending money they can attach these instruments.
  2. Accepting bill of exchange:
    Banks accept bills on behalf of customers and make payments to the foreign exporter.
  3. Safety Lockers:
    Valuable documents and jewels etc can be kept in a vault provided by a bank for a rent.
  4. Letter of credit:
    This document is given by bank on behalf of importing customer to exporter, guaranteeing payment for the imports.
  5. Travellers’ cheques:
    Customers need not carry cash during travel in India or abroad. The denomination and words are printed in the cheque.

Question 42(a).
What are the hindrances of business? Explain any five hindrances.
There are so many hindrances of business. They are as follows:

  1. Hindrance of Person:
    The manufacturers and consumers do not know each other. It is called as hindrance of a person. It is removed by the trade or trader. The trader is connecting the producer and the consumer.
  2. Hindrance of Place:
    The manufacturing place is different from the place of consumption. This difficulty is known as hindrance of place. It is removed by the transport.
  3. Hindrance of Time:
    Goods are produced in one season but may be demanded throughout the year. Some goods are produced throughout the year, but may be used in certain season. It is known as hindrance of time. It is removed by the warehouse.
  4. Hindrance of risk:
    Fire, theft, floods, etc., may bring huge loss to the business. It is known as hindrance of risk. It is overcome by the insurance companies.
  5. Hindrance of knowledge:
    The difficulty of not knowing the place and availability of goods is known as hindrance of knowledge. It is removed by advertising and communication.


Question 42 (b).
Every business enterprise has certain objectives which regulate and generate its activities. The objectives may be classified into five types. Explain the objectives of business.

(1) Economic Objectives:
Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objective, which includes creation of customers, regular innovations and best possible use of available resources.

(2) Social Objectives:
Social objectives are those objectives of business, which are desired to be achieved for the benefit of the society. Since business operates in a society by utilizing its scarce resources, the society expects something in return for its welfare.

(3) Organizational Objectives:
The organizational objectives denote those objectives an organization intends to accomplish during the course of its existence in the economy like expansion and modernization, supply of quality goods to consumers and customers’ satisfaction, etc.

(4) Human Objectives:
Human objectives refer to the objectives aimed at the well-being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped and deprived of proper education and training. The human objectives of business may thus include economic well-being of the employees, social and psychological satisfaction of employees and development of human resources.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

(5) National Objectives:
Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations.

Question 43(a).
Write the procedure for registration of a partnership firm.
Procedure for registration of a partnership firm:
A statement should be prepared stating the following particulars:

  • Name of the firm
  • The principal place of business
  • Name of other places where the firm carried on business
  • Names and addresses of all the partners
  • The date on which each partner joined the firm
  • The duration of the firm

This statement signed by all the partners should be produced to the Registrar of Firms along with the necessary registration fee of Rs. 3. Any change in the above particulars must be communicated to the Registrar within 14 days of such alteration.


Question 43 (b).
Write short notes on:

  1. Analytical Industry
  2. Genetic Industry
  3. Construction Industry


  1. Analytical Industry:
    It analyses and separates different elements from the same materials, as in the case of oil refinery.
  2. 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, apiary and etc., are classic examples of genetic industries.
  3. Construction Industries:
    These industries are involved in the construction of building, dams, bridges, roads, as well as tunnels and canals.

Question 44 (a).
Explain any five essentials of a valid contract.

  1. Offer and Acceptance:
    There must be two parties to an agreement namely one party making the offer and the other party accepting it.
  2. Legal Relationship:
    The parties must have the intention to create legal relationship between them. An agreement of Social or domestic nature is not at all a contract.
  3. Lawful Consideration (quid pro quo):
    As per Contract Act under Sec. 2(d) Consideration means something in return. A contract without consideration becomes invalid.
  4. Lawful Object (Section 23):
    The object of agreement should be lawful and legal. It must not be immoral, illegal or opposed to public policy.’
  5. Free Consent (Section 13 and 14):
    Consent of the parties must be free and genuine. Consent means agreeing upon same thing in the same sense at the same time i.e. there should be consensus – ad – idem. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.


Question 44 (b).
Tax is classified into direct and indirect tax. Tax is a revenue to the government. It is used for the welfare of the country. Distinguish between direct and indirect taxes.
Tamil Nadu 11th Commerce Model Question Paper 3 English Medium - 1
Question 45 (a).
Explain the advantages of warehousing.

  1. It safeguards the stock for the merchants who do not have storage place.
  2. 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.
  3. It helps in selection of channel of distribution. The producer will prefer whether to a wholesaler or retailer.
  4. It assists in maintaining the continuous sale and avoid the possibilities of “Out of Stock”.
  5. 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.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

(3) Indemnity:
It 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:
It 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 3 English Medium

Question 46 (a).
Who are the intermediaries in the Export trade? Explain.
Intermediaries involved in export trade include the following:
(1) Forwarding agent:
Forwarding agent is appointed by exporter to fulfill the customs and shipping related formalities and certain logistic functions.

(2) Commission agents:
Commission agent is an international agent who is paid a certain percentage of commission for the order booked by him. He offers product to potential customers in the territory allotted to him.

(3) Export trading houses:
Export trading house has been established to increase the export, strengthen the global market, capacity and get necessary facilities to increase the export.


Question 46 (b).
Describe the benefits of Outsourcing.
(1) Focusing on Core Activities:
Companies can focus on their core competence, a few areas where the company has distinct capability. The rest of the activities (non-core) can be outsourced to outside agencies.

(2) To Fillip Economic Development:
Outsourcing stimulates entrepreneurship, encourages employment opportunities, expands exports, enables tremendous growth of the economy.

(3) Encourages Employment Opportunities:
Companies that are outsourcing their non-core activities provide chances for other small business units to take up the activities. This paves way for more job opportunities and new employment avenues.

(4) Reduction in Investment:
Companies through outsourcing avails the services of outsiders
which in turn reduces the investment requirements. The amount so available can be utilized productively and this increases the profits.

(5) Quest for Excellence:
Outsourcing enables the firms to pursue excellence in two ways namely excelling themselves in the activities they do and excel outsiders by extending their capabilities through contracting out.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Question 47 (a).
Explain the need and concept of Social Responsibilty.
The term social responsibility is defined in various ways. Every businessman earns prosperity from business and should give back the benefit of this prosperity to society. This is voluntary. This benefit is the moral responsibility of business. As this benefit is supposed to be passed on to society, it can be said to be social responsibility of business. Need:

  1. Self-Interest:
    Abusiness unit can sustain in the market for a longer period only by assuming some social obligations. Normally businessmen recognise that they can succeed better by fulfilling the demands and aspirations of society.
  2. Creation of Society:
    Business is a creation of society. Therefore, it should fulfil its obligations to society.
  3. Social Power:
    Businessmen have considerable social power. Their decisions and actions affect the lives and fortunes of the society.
  4. Image in the Society:
    A business can improve its image in public by assuming social obligations, good relations with workers, consumers and suppliers help in the success of business.


Question 47 (b).
Write short notes on-
1. Retained Earnings
2.  Lease Financing
1. Retained Earnings
Retained earnings refer to the process of retaining a part of net profit year after year and reinvesting them in the business. It is also termed as ploughing back of profit. An individual would like to save a portion of his/her income for meeting the contingencies and growth needs. Similarly profit making company would retain a portion of the net profit in order to finance its growth and expansion in near future. It is described to be the most convenient and economical method of finance.

2. Lease Financing
Lease financing denotes procurement of assets through lease. For many small and medium enterprises, acquisition of plant and equipment and other permanent assets will be difficult in the initial stages. In such a situation, Leasing is helping them to a greater extent.

Tamil Nadu 11th Commerce Model Question Paper 3 English Medium

Leasing here refers to the owning of an asset by any individual or a corporate body which will be given for use to another needy business enterprise on a rental basis. The firm which owns the asset is called ‘Lessor’ and the business enterprise which hires the asset is called ‘Lessee’. The contract is Called ‘Lease’. The lessee pays a fixed rent on agreed basis to the lessor for the use of the asset.

The terms and conditions like lease period, rent fixed, mode of payment and allocation of maintenance, are mentioned in the lease contract. At the end of the lease period, the asset goes back to the lessor. Alternatively lessee can own the asset taken on lease by paying the balance of price of asset concerned to lessor. Hence lease finance is a popular method of medium term business finance.