Important Questions – Page 3

TN Board 11th Commerce Important Questions Chapter 32 Direct Taxes

December 1, 2021

TN State Board 11th Commerce Important Questions Chapter 32 Direct Taxes

Question 1.
What is Income tax?
Answer:
Tax is a compulsory contribution to state revenue by the Government. It is levied on the income or profits from business of individuals and institutions.

Question 2.
What is meant by previous year?
Answer:

The year of earning income is called ‘Previous Year’.
The year in which assessment of income is done is called ‘Assessment Year’.
The income tax return of previous year’s income is filed in the relevant assessment year.

Question 3.
Define the term person?
Answer:
The term ‘person’ has been defined under the Income tax Act. It includes Individual, Hindu Undivided Family, Firm, Company, Local authority, Association of person or body of Individual or any other artificial juridical persons.

Question 4.
Define the term assessee?
Answer:

Assessee means a person by whom any tax or any other sum of money is payable under this Act.
It includes every person in respect of whom any proceeding has been taken for the assessment of his income or assessment.

Question 5.
What is an assessment year?
Answer:

The year in which tax is paid is called the assessment year.
It normally consisting of a period of 12 months commencing on 1st April every year . and ending on 31st March of the following year.

Question 6.
What is Gross Total Income?
Answer:
Income from five heads namely salaries, house property, profits and gains of business or profession, capital gains and other sources, in computed separately according to the provisions given in the Act. Income computed under these heads shall be aggregated after adjusting past and present losses and the total so arrived at is known as ‘Gross Total Income’.

Question 7.
List out the five heads of income.
Answer:
These five heads of income are:

Income from ‘Salaries’ [Sections 15-17];
Income from 4House Property’ [Sections 22-27];
Income from ‘Profits and Gains of Business or Profession’ [Sections 28- 44];
Income from ‘Capital Gains’ [Sections 45-55]; and
Income from ‘Other Sources’ [Sections 56-59].

Question 8.
Write a note on Agricultural Income.
Answer:
Any rent or revenue derived from land which is situated in India and is used for agriculture purposes. Agricultural income is fully exempted from tax u/s 10(1) and as such does not form part of total income.

Question 9.
What do you mean by Total Income.
Answer:
Out of Gross Total Income, Income tax Act 1961 allows certain deductions under section 80. After allowing these deductions the figure which we arrive at is called ‘Total Income’ and on this figure tax liability is computed at the prescribed rates.
Gross Total Income * * * *
Less Deductions (Sec.80C to 80U) * * * *
Total Income (T.I.) * * * *

80C Deductions:
Contribution to Provident Fund, life Insurance Premium, Children’s Tuition Fees, Health Insurance Premium, Investment in National Savings Certificate, interest paid for home loans, etc.

Question 10.
Write short notes on:
(i) Direct Tax,
(ii) Indirect Tax.
Answer:
(i) Direct Tax:
If a tax levied on the income or wealth of a person and is paid by that person (or his office) directly to the Government, it is called direct tax e.g. Income-Tax, Wealth Tax, Capital Gains Tax, Securities Transaction Tax, Fringe Benefits Tax (from 2005), Banking Cash Transaction Tax (for ₹ 50,000 and above – from 2005), etc. In India all direct taxes are levied and administered by Central Board of Direct Taxes.

(ii) Indirect Tax:
If tax is levied on the goods or services of a person (seller). It is collected from the buyers and is paid by seller to the Government. It is called indirect tax. eg: GST.

Question 11.
Elucidate any five features of Income Tax.
Answer:
(i) Levied as Per the Constitution:
Income tax is levied in India by virtue of entry No. 82 of list I (Union List) of Seventh Schedule to the Article 246 of the Constitution of India.

(ii) Levied by Central Government:
Income tax is charged by the Central Government on all incomes other than agricultural income. However, the power to charge income tax on agricultural income has been vested with the State Government as per entry 46 of list II, i.e., State List.

(iii) Direct Tax:
Income tax is direct tax. It is because the liability to deposit and ultimate burden are on same person. The person earning income is liable to pay income tax Out of his own pocket and cannot pass on the burden of tax to another person.

(iv) Annual Tax:
Income tax is an annual tax because it is the income of a particular year which is chargeable to tax.

(v) Tax on Person:
It is a tax on income earned by a person. The term ‘person’ has been defined under the Income tax Act. It includes individual, Hindu Undivided Family.

(vi) Tax on Income: It is a tax on income.
The Income tax Act has defined the term income and it includes salary income, house property income etc.

(vii) Applicability:
Income Tax is applicable throughout India including the state of Jammu and Kashmir.

Question 12.
Define Tax. Explain the term direct tax and indirect tax with an example.
Answer:
Tax is a compulsory contribution to state revenue by the Government. It is levied on the income or profits from business of individuals and institutions. It may be added to the price of goods, services of transactions. Tax is the basic source of revenue to the Government, This revenue is utilised for the expenses of civil administration, internal and external security, building infrastructure, etc.

Types of Taxes:
There are two types of taxes – direct taxes and indirect taxes.

(i) Direct Tax:
If a tax levied on the income or wealth of a person and is paid by that person (or his office) directly to the
Government, it is called direct tax e.gIncome-Tax, Wealth Tax, Capital Gains Tax, Securities Transaction Tax, Fringe Benefits Tax (from 2005), Banking Cash Transaction Tax (for ₹ 50,000 and above – from 2005), etc. In India all direct taxes are levied and administered by Central Board of Direct Taxes.

(ii) Indirect Tax:
If tax is levied on the goods or services of a person (seller). It is collected from the buyers and is paid by seller to the Government. It is called indirect tax. eg: GST.

(iii) 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, company, etc.)

Question 13.
List out any ten kinds of incomes chargeable under the head income tax.
Answer:
Income includes the followings:

Profits and gains of business or profession.
Dividend.
Voluntary contribution received by a charitable / religious trust or university / education institution or hospital/ electoral trust [w.e.f. 01.04.2010]
Value of perquisite or profit in lieu of salary taxable u/s 17 and social allowance or benefit specifically granted either to meet personal expenses or for performance of duties of an office or an employment of profit.
Export incentives, like duty drawback, cash compensatory support, sale of licenses, etc.
Interest, salary bonus, commission earned by a partner of a firm from such firm.
Capital gain chargeable u/s 45.
Profits and gains from the business of banking carried on by a co-operative society with’the members.
Winning from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature what so ever.
Deemed income u/s 41 or 59.

Question 14.
Discuss the various kinds of assessee.
Answer:
Assessee means a person by whom any tax or any other sum of money is payable under this Act. It includes every person in respect of whom any proceeding has been taken for the assessment of his income or assessment of fringe benefits.
Kinds of assessee:
(i) Ordinary person or an individual he is an ordinary assessee:
(a) The persons who are covered under income tax Act are called assesse.
(b) Every person want to pay income tax out of receiving salaries or income from house properties. Any person who is entitled to refund of tax

(ii) Representative assessee:
(a) A person may not be lichle only for his own profit or loss but also on the profit or loss of other persons, eg: guardian of a minor, Agent of non-resident,
(b) In the above case one person who is responsible for the assessment of income of such persons are called representative to be an assessee.

(iii) Assesssee in default:
(a) A person is deemed to be an assessee in default. If he fails to fulfil his statutory obligations.
(b) In case an employer paying salary or professional employer ’s duty is the deduct tax source and deposit the amount of tax. So collected in treasury,
(c) If a person fails to deduct tax at source or deduct tax but does not deposit in the treasury. He is known as treasury in default.

Choose the Correct Answer:

Question 1.
Income Tax is:
(a) a business tax
(b) a direct tax
(c) an indirect tax
(d) none of these
Answer:
(b) a direct tax

Question 2.
Period of assessment year is:
(a) 1st April to 31st March
(b) 1st March to 28th Feb
(c) 1st July to 30th June
(d) 1st Jan. to 31st Dec.
Answer:
(a) 1st April to 31st March

Question 3.
The year in which income is earned is known as:
(a) assessment year
(b) previous year
(c) light year
(d) calendar year
Answer:
(b) previous year

Question 4.
The aggregate income under five heads is termed as:
(a) gross total income
(b) total income
(c) salary income
(d) business Income
Answer:
(b) total income

Question 5.
Agricultural income earned in India is:
(a) Fully Taxable
(b) Fully Exempted
(c) Not Considered for Income
(d) None of the above
Answer:
(b) Fully Exempted

Samacheer Kalvi 11th Commerce Notes Chapter 32 Direct Taxes

→ Tax is a contribution to state revenue by the government. It is levied on the income or profits from business of individuals and institutions. It may be added to the price of goods, services or transactions. Tax is the basic source of revenue to the government. This revenue is utilized for the expenses of civil administration. Internal and external security, building infrastructure, etc.

→ There are two types of taxes direct tax and indirect tax.

→ Direct tax:
If a tax levied on the income or wealth of a person and is paid by that person (or his office) directly to the government. It is called direct tax. eg: Income tax, wealth tax. In India all direct taxes are levied and administered by central board of direct taxes.

→ Indirect tax:
If tax is levied on the goods, or services of a person(seller). It is collected from the buyers and is paid by seller to the government. It is called indirect tax. eg: GST 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, company, etc) Features of income tax in India.

Levied as per the constitution
Levied by central government
Direct tax
Annual tax
Tax on person
Tax on income
Income of “previous year” is assessable in “assessment year”.
Charged at prescribed rates.
Administrated by the central government.
Applicability.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 10 Reserve Bank of India

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 10 Reserve Bank of India

Question 1.
What are the services included in Service business?
Answer:
Educational, Medical, Hospitality.

Question 2.
Write the meaning of ‘Bank’.
Answer:
Bank plays a vital role by providing the money required for their regular functioning and development.

Question 3.
Briefly explain about Central Bank.
Answer:
Every country has a Central Bank of its own which is called as Central bank. It is the apex bank and the statutory institution in the market of a country. The Central Bank occupies a central position in the monetary and banking system of the country and is the superior financial authority. In India, The Reserve Bank of India is the Central Bank of our country.

Question 4.
Mention the importance of banking services.
Answer:

Banking is considered to be the nerve center of trade, commerce and business in a country.
It plays a vital role in distributing the money for the development of trade, industry and commerce.
Bank is an institution which deals in money and credit.

Question 5.
Explain the origin of RBI.
Answer:
The Imperial Bank of India carried out the note issue and other functions of the central bank. In 1926 the Hilton-Young Commission or the Royal Commission on Indian Currency and Finance (J. M. Keynes and Sir Ernest Cable were its members) made recommendation to create a central bank.

As a result, the RBI Act 1934 was passed and RBI launched in operations from April 1, 1935. RBI was established with a share capital of ₹ 5 crores divided into shares of ₹ 100 each fully paid up. The entire share capital was owned by private shareholders. Its head office was in Calcutta and moved to Mumbai in 1937.

Question 6.
Who are the persons involved in RBI administration?
Answer:

One governor and four deputy governors appointed for a period of four years.
Ten directors from various fields.
Two Government officials.
Four directors – one each from local boards.

Question 7.
Classify the various functions of Reserve Bank of India.
Answer:
A. Leadership and Supervisory Functions
B. Traditional Functions and
C. Promotional Functions.

A. Leadership and Supervisory Functions:

India’s Representative in World Financial Institutions.
Regulator and Supervisor of Indian Banking System.
Monetary Authority.
Closely Monitoring Economic Parameters.

B. Traditional Functions:

Banker and Financial Advisor to the Government.
Monopoly of Note Issue.
Banker’s Bank.
Controller of Credit and Liquidity.
Quantitative Methods of Credit Control.

C. Promotional Functions:

Nurturing Banking Habits among the Public.
Grievance Settlement Measures.
Agricultural Development.
Promotion of Small Scale Industries.
Facilitates Foreign Trade.
Supports co-operative sector.

Question 8.
Explain the organizational structure of RBI.
Answer:
The head office of the RBI is situated in Mumbai. This central office has 33 ‘ departments in 2017. It has four zonal offices in Mumbai, Delhi, Calcutta and Chennai functioning under local boards with deputy governors as their heads. It also has 19 regional offices and 11 sub-offices (2017). The RBI is governed by a Central Board of Directors. The 21 member board is appointed by the Government of India. It consists of;

One governor and four deputy governors appointed for a period of four years,
Ten directors from various fields
Two Government officials
Four directors – one each from local boards.

Question 9.
A Debate on demonetisation and – remonetisation.
Answer:
Demonetisation:

To crop whip against black money.
To drive out counterfeit currency in circulation.
Formalization of cash dependent business
Dismantling the financial strength of terrorism and naxalism. This leads to No black money.
“All must pay correct taxes,
All are equal. ”

Remonetisation:

There were ₹ 17.118 billion value of ₹ 5000 and ₹ 1000 currency notes in circulation before demonetization.
They consisted of around 2203 Crore: pieces of notes.
Now remonetisation was carried out by issuing new ₹ 2000 and ₹ 500 currency notes to circulate.
‘All economic problems solved now”.

Question 10.
Know the Central Banks of Some other Countries. The Central Bank of Russia is the Bank of Russia. The Central Bank of Sri Lanka is the Central Bank of Sri Lanka. The Central Bank of the USA is ………(1)……. The Central Bank
of Pakistan is ……(ii)…….
Answer:

Central Bank of America is Federal Reserve.
Central Bank of Pakistan is the State Bank of Pakistan.

Question 11.
Mention the names of Central Banks in three other countries.
Answer:

Central Bank of Bhutan – Bhutan.
Reserve Bank of Australia – Australia
Central Bank of China – China.
Bank of Canada – Canada.

Question 12.
Understand the concepts monetary authority, banking system, financial system.
Answer:
Formal financial system of four segments. These are financial institutions, financial markets, financial instruments, and financial services.

Question 13.
Collection of names of RBJ Gove tors.
Answer:

D. Subbarao. IAS – September 5, 2008
Raghuram Rajan – September 4, 2013
Urjit Patel – September 5, 2016.

Question 14.
Collection of photo copy of currencies and coins in India.

TN Board 11th Commerce Important Questions Chapter 10 Reserve Bank of India 1

Answer:

Currency rare Indian 2 rupees.
Rare 1908 King Edward VII
My coin collections two rupee.

Question 15.
Take up a recent newspaper clipping about . RBI such as the measures taken to reduce NPA. etc.
Answer:
Central banks are not known to be trigger happy. RBI is no exception. Indeed it has often been criticised for being much too cautious. Especially when it come to loosening Capital A/c.’

Question 16.
Arrange for a group discussion on customer grievances and the cases settled by Banking Ombudsman offices.
Answer:
The RBI today said it will bring about a customer grievances redressal mechanism for non-banking finance companies NBFCs by this month end.

Question 17.
Visit the RBI website www.rbi.org.in to read and have a discussion on any annual report, etc.
Answer:
The asset quality of the banking sector continued to be a concern during 2016-2017. In the aftermath of the assets quality review (AQR) undertaken by the RBI.

Choose the Correct Answer:

Question 1.
Which bank has the power to issue bank notes?
(a) Central bank
(b) Commercial bank
(c) Co-operative banks
(d) Foreign banks
Answer:
(a) Central bank

Question 2.
The Central bank of India is:
(a) PNB
(b) SBI
(c) ICICI
(d) RBI
Answer:
(d) RBI

Question 3.
The Reserve Bank of India commenced its operations from April 1,
(a) 1936
(b) 1935
(c) 1934
(d) 1933
Answer:
(b) 1935

Question 4.
Bankers are not only dealers of money but also leaders in
(a) Economic development
(b) Trade development
(c) Industry development
(d) Service development
Answer:
(a) Economic development

Question 5.
Which of the following is not a function of a central bank?
(a) Guiding and regulating the banking system of a country
(b) Deal with the general public
(c) Acts essentially as Government banker
(d) Maintains deposit accounts of all other banks
Answer:
(b) Deal with the general public

Samacheer Kalvi 11th Commerce Notes Chapter 10 Reserve Bank of India

→ Reserve bank of India was established in 1935. It is the central bank of India. Central – bank of India is important in our economic development. RBI Only issue our currency notes. Its main function is act as a banker to the government and banker’s bank.

→ RBI controls money supply and credit maintain price stability in the country. RBI follows some credit control methods. RBI using two method. Quantitative credit control and qualitative credit control methods.

→ Every country have central banks. All banks work as a nerve centre of every business. All commercial banks financial requirements is fulfilled by reserve bank of India. Our country’s nerve centre is reserve bank of India

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 9 Government Organisation

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 9 Government Organisation

Question 1.
State the different types of public sectors enterprises.
Answer:
Different types of public sectors enterprises are –

Departmental undertaking,
Public corporation,
Government companies.

Question 2.
What is the basic feature of a Departmental undertaking?
Answer:
Basic feature of a Departmental undertaking are:

Ultimate Responsibility.
Governmental Financing.
Accounting and Audit.
Managed by Civil Servants.
Sovereign Immunity.

Question 3.
Give two examples for each of the following:
(i) Private sector enterprises,
(ii) Global enterprises,
(iii) Public enterprises.
Answer:
(i) Private sector enterprises:
Example of private sector include sole proprietorship, partnership, Joint Hindu Family.

(ii) Global enterprises:
An MNC is a company whose, business operations extend beyond the country in which it has been incorporated,
(a) Coca cola corporation,
(b) Unilever Limited.

(iii) Public enterprises:
Hindustan Machine Tools, TamilNadu Police Department, LIC, ONGC, Coal mines.

Question 4.
State the form of public enterprises which is most suitable for projects related to National Security.
Answer:
Strategic industries like defence and atomic power cannot be better managed other than government departments. Departmental undertakings can maintain secrecy in their working.

Question 5.
The Industrial Policy Resolution 2001 exclusively reserved for few industries for the public sector. Name these industries.
Answer:
A public corporation enjoys internal operational autonomy; as it is free from Governmental control. Atomic power, Coal mines, Lignite, Mineral oil, Defence, Armed forces and Defence equipments.

Question 6.
List the areas where the state or central ownership is a preferred form of business organisation. Justify your choice of areas.
Answer:

Coal mines Authority Limited.
Steel Authority of India Limited.
Bharath Heavy Electrical Limited.
Indian Telephone Industries.
TamilNadu Agro Industries.
TamilNadu State Transport Corporation Limited.
TamilNadu Small Industries.

A company owned managed and controlled by central government or state government is called a government company. 51% of the paid up share, capital is held by State or Central government.

Question 7.
What are the different kinds of organisations that come under the public sector?
Answer:
Departmental undertaking This is considered as a department attached to the ministry of a government. Its administration is in the hands of the chief administrative officer of the ministry.

Public corporation:
This is established under a specific statute passed in the parliament. It is known as a statutory corporation because it is created by a statute.

Government Company:
A Government company is one in which not less than 51% of the paid up capital is held by the Central Government or by ahy one or more State Governments or partly by the Central Governments and partly by one or more State Governments.
eg: Bharat Heavy Electricals Limited, Steel Authority of India Limited, etc. A subsidiary of a Government company is also treated as a Government company. A Government company also enjoys a separate corporate existence. It should not be identified with the Government and its employees are not Government employees.

Question 8.
List the names of some enterprises under the public sector and classify them.
Answer:
Departmental undertaking: post and Telegraph, atomic power.

Public corporation:

RBI,
LIC,
UTI

Government companies:

Coal mines authority Limited,
Bharath Heavy Electricals Limited,
Steel Authority of India Ltd.

Question 9.
Define Departmental undertakings.
Answer:
This is considered as a Department attached to the Ministry of Government. Its Administration is in the hands of Chief Administrative Officer of the Ministry. Here the Department is a part of the Government.
This is oldest form of State enterprise.
eg: Radio and Television, BSNL, Railways, Post and Telegraph, Atomic Power, Defence.

Question 10.
What is meant by Government Company?
Answer:
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”.

Question 11.
What are the advantages and disadvantages of Departmental undertaking?
Answer:
Advantages:
Following are the advantages of the departmental undertaking.
(i) Easy Formation:
It is easy to set up a departmental undertaking. The depart¬mental undertaking is created by an administrative decision of the Government, involving no legal formalities for its formation.

(ii) Direct and Control of Parliament or State Legislature:
The departmental undertaking is directly responsible to the Parliament or the State legislature through its overall head i.e. the minister concerned.

(iii) Secrecy Maintained:
Strategic industries like defence and atomic power cannot be better managed other than government departments. Department undertakings can maintain secrecy in their working.

(iv) Lesser Burden of Tax on Public:
Earnings of departmental undertaking are entirely paid into Government treasury, resulting in lesser tax burden on the public.

(v) Instrument of Social Change:
Government can promote economic and social justice through departmental undertakings. Hence, a departmental undertaking can be used by the Government, as an instrument of social change.

Disadvantages:
Following are the major limitations of the departmental undertaking.
(i) Red-tapism:
There is too much of procedures which results in delay. Commercial organisation cannot afford delay in taking decisions.

(ii) Incidence of Additional Taxation:
Losses incurred by a departmental enterprise are met out of the treasury. This very often necessitates additional taxation the burden of which falls on the common man.

(iii) Lack of Competition:
Civil Servants are given control of these undertakings who may not have business outlook or commercial experience. So, they run the undertaking in their own fashion without considering the sovereignty of the consumers.

(iv) Casual Approach to Work:
As officers of a departmental undertaking are subject to frequent transfers; they develop a sense of casual approach to work. As a result, the operational efficiency of the undertaking suffers a lot.

(v) Government Interference:
There is an excessive government interference and control in department organisation. These undertakings are not given freedom to decide their own policies. Centralised control leads to delay in action. Red-tapism and bureaucracy have become the limiting features of these organisations.

Question 12.
What are the features of Public corporation?
Answer:
(i) Special statute:
A public corporation is created by a special Act of the Parliament or the State Legislature. The Act defines its powers, objectives, functions and relations with the ministry and the Parliament (or State Legislature).

(ii) Separate Legal Entity:
A public corporation is a separate legal entity with perpetual succession and common seal. It has an existence, independent of the Government.
It can own properly; can make contracts and file suits, in its own name.

(iii) Capital Provided by the Government:
The capital of a public corporation is provided by the Government or by agencies controlled by the government. However, many public corporations have also begun to raise money from the capital market.

(iv) Financial Autonomy:
A public corporation enjoys financial autonomy. It prepares its ‘ own budget; and has authority to retain and utilize its earnings for its business.

(v) Management by Board of Directors:
Its management is vested in a Board of Directors, appointed or nominated by the Government. But there is no Governmental interference in the day-to-day working of the corporation.

Question 13.
What are the Features of Government company?
Answer:
(i) Registration Under the Companies Act:
A Government company is formed through registration under the Companies Act, 1956; and is subject to the provisions of this Act, like any other company. However, the Central Government may direct that any of the provisions of the Companies Act shall not apply to a Government company or shall apply with certain modifications.

(ii) Executive Decision of Government:
A Government company is created by an executive decision of the Government, without seeking the approval of the Parliament or the State Legislature.

(iii) Separate Legal Entity:
A Government company is a legal entity separate from the Government. It can acquire property; can make contracts and can file suits, in its own name.

(iv) Whole or Majority Capital Provided by Government:
The whole or majority (at least 51%) of the capital of a Government company is provided by the Government; but the revenues of the company are not deposited into the treasury.

(v) Majority of Government Directors:
Being in possession of a majority of share capital, the Government has authority to appoint majority of directors, on the Board of Directors of a government company.

(vi) Own Staff:
A Government company has its own staff; except Government officials who are sent to it on deputation. Its employees are not governed by civil service rules.

Question 14.
What are the advantages and disadvantages of Public corporation?
Answer:
Advantages of Public Corporation:
(i) Bold Management due to Operational Autonomy:
A public corporation enjoys internal operational autonomy; as it is ’ free from Governmental control. It can, therefore, run in a businesslike manner. Management can take bold decisions involving experimentation in its lines of activities, taking advantage of business situations.

(ii) Legislative Control:
Affairs of a public corporation are subject to scrutiny by Committees of Parliament or State Legislature. The Press also keeps a watchful eye on the working of a public corporation. This keeps a check on the unhealthy practices on the part of the management of the public corporation.

(iii) Qualified and Contented Staff:
Public corporation offers attractive service conditions to its staff. As such it is able to attract qualified staff. Because of qualified and contented staff, industrial relations problems are not much severe. Staff has a motivation to work hard for the corporation.

(iv) Tailor-Made Statute:
The special Act, by which a public corporation is created, can be tailor-made to meet the specific needs of the public corporation; so that the corporation can function in the best manner to achieve its objectives.

(v) Not Affected by Political Changes:
Being a distinct legal entity, a public corporation is not much affected by political changes. It can maintain continuity of policy and operations.

Disadvantages of Public Corporation:
(i) Autonomy and Flexibility, Only in Theory:
Autonomy and flexibility advantages of a public corporation exist only in theory. In practice, there is a lot of interference in the working of a public corporation by ministers, government officers and other politicians.

(ii) Misuse of Monopolistic Power:
Public corporations often enjoy monopoly in their field of operation. As such, on the one hand they are indifferent to consumer needs and problems; and on the other hand, often do not hesitate to exploit consumers.

(iii) Rigid Constitution:
The constitution of a public corporation is very rigid. It cannot be changed, without amending the Statute of its formation. Hence, a public corporation could not be flexible in its operations.

(iv) Low Managerial Efficiency:
Quite often civil servants, who do not possess management knowledge and skills, are appointed by the government on the public corporation. Board of Directors, of a public corporation. As such, managerial efficiency of public corporation is not as much as found in private business enterprises.

(v) Problem of Passing a Special Act:
A public corporation cannot be formed without passing a special Act which is a time consuming and difficult process. Hence, the scope for setting up public corporations is very restricted.

Question 15.
What are the features of Departmental organisation?
Answer:
Features of Departmental organisation:
The salient features of a departmental undertaking are as follows:

(i) Ultimate Responsibility:
The ultimate responsibility for the management of a departmental undertaking lies with the minister concerned; who is responsible to the Parliament or State Legislature for the affairs of the departmental undertaking. The minister, in turn, delegates his authority downwards to various other management levels, in the departmental undertaking.

(ii) Governmental Financing:
The departmental undertaking is financed through annual budget appropriations by the Parliament or the State Legislature. The revenues of the undertaking are paid into the government treasury.

(iii) Accounting and Audit:
The departmental undertaking is subject to the normal budgeting, accounting and audit procedures, which are applicable to all Government departments.

(iv) Managed by Civil Servants:
The departmental undertaking is managed by civil servants, who are subject to same service conditions as applicable to civil servants of the Government.

(v) Sovereign Immunity:
A departmental undertaking cannot be sued anybody, without the consent of the Government.

Question 16.
Name any two examples of Departmental undertaking business.
Answer:
Examples of Departmental undertaking:

Radio and Television.
Post and Telegraph.

Question 17.
Name any two examples of Public corporation.
Answer:
Examples of Public corporation:

RBI – Reserve Bank of India.
UTI – Unit Trust of India.

Question 18.
Name any two examples of Government Company.
Answer:

Maruti Udyog.
BHEL – Bharath Heavy Electricals Limited.

Question 19.

(i) Organise a debate in your class on the motion “Public Enterprises in India have failed to achieve their objectives”. Select a few good speakers for the purpose. State the points for and against the motion.
Answer:
Favourable:

Excesssive government control
Interference
Delay and Redtapism.
Tax burden to public
Inefficiency.

Unfavourable:

Proper use of funds
Source of income for government.
Secrecy.
Useful to specific industries.

(ii) Recently a discussion on “The objectives of Public sector undertakings was organised by the Friends Circle, a private cultural, organization of the city of Chennai. One of the participants, Mr. Ramesh happened to be a social worker. He observed, “the j objective of Public Enterprises is to serve the Society and not to earn profits”. Mr. Deepesh, an advocate, objected to Mr. Ramesh’s statement and gave his own view point. Thus continued the discussion.
If you have participated in that discussion, what should have been your stand and why?
Answer:
Public enterprises not to earn profit. But run as commercial lines. Defence industries are look after departmental undertakings. In emergency situation private sector cannot co-operate to the government.
The objectives of public sector undertakings is to serve the society and not to earn profit.

Question 20.
You are a newly appointed MD of a foreign sector tourist Bus transport company. The management of the bus Transport undertaking of your city finds that its buses are not able to attract very many tourists. Private Mini-Buses are seen to be preferred by people on certain routes. As a result, the undertaking is incurring losses. Therefore, management wants to reformulate its price policyTAs a CEO or MD what advice can you give to it? Explain.
Answer:
people likes attractions. Tourist bus transport company earn profit.

Question 20.
Mr.Sudhan is studying in B.Com, 1st year. His father, Mr.Somu is a leading businessman in Chennai. Somehow, Mr. Sudhan does not know anything about utilities. But he is to prepare a lesson for his class in this topic. He request his father for help. His father tells Mr. Sudhan that Public utilities are no different from his own business except that these are controlled by Government instead of private people.

Meanwhile, Mr. Chandrasekaran a friend of Mr. Somu comes there. Mr. Chandrasekaran is an employee of Chennai Electricity Supply Undertaking. Mr. Chandrasekaran intervenes in the conversation going on between Mr. Somu and his son and hold that Mr. Sudhan is not correct; there are other special features of public utilities, too. Perform the characters of Mr, Sudhan, Mr. Somu and Mr. Chandrasekaran and state your positions.
Answer:
Government undertakes to provide various necessities like electricity, water, goal,-gas, transport, communication facilities to the people. Above public utility services given by public enterprises.

Characters of Somu: He is a business man.
(i) Private business people pay tax regularly.
(ii) Government employees are paid servants. So he cannot work efficiently.

Characters of Mr. Chandra Sekar:
He is an employee of Chennai Electricity supply board. He explains electricity is very important to the public electricity board -supplies electricity to common people, Industries and all trade.

Characters of Mr. Sudhan:
He is a BCom student. He knows everything from his textbook and also his father is also a businessman. He is getting information about business from his father.

Choose the Correct Answer:

Question 1.
The share capital of the government company must not be less than:
(a) 49 %
(b) 51 %
(c) 50 %
(d) 25 %
Answer:
(b) 51 %

Question 2.
Airport Authority of India is a public enterprise. Identify the form of organisation
(a) statutory corporations
(b) departmental undertakings
(c) multi-national corporations
(d) state owned company
Answer:
(b) departmental undertakings

Question 3.
The oldest form of organisation in public sector:
(a) public sector undertakings
(b) departmental undertakings
(c) multi national corporations
(d) statutory Corporation
Answer:
(b) departmental undertakings

Question 4.
A Government company purchases shares in the name of:
(a) Prime Minister
(b) President
(c) Chief Justice of India
(d) State Chief Minister
Answer:
(b) President

Question 5.
The primary obj ective of the state enterprises is to:
(a) earn profit
(b) provide employment
(c) serve the people
(d) all the above
Answer:
(c) serve the people

Samacheer Kalvi 11th Commerce Notes Chapter 9 Government Organisation

→ State enterprise as a form of organisation gained economic importance in most of the countries of the world in recent years. During 20th century various government started to participating in industrial and commercial activities. Industrial revolution helped all round growth of industries. State enterprises helping all-round industrialisation, developing basic industries and also to provides necessities to the public.

→ The government can organise an industrial or commercial unit in any one of the following form. Department of the government separate corporation and joint stock company. In department organisation secrecy can be maintained in strategic industries like defence and atomic power. Public corporation it is an autonomous body corporate create by a special statute of a state or central government. Its main aim is to provide service to the public at reasonable price.

→ Government company owned and controlled by state or central government, annual reports regarding working of the company must placed before both the houses of parliament or legislature.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 20 International Finance

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 20 International Finance

Question 1.
Who are Foreign Institutional Investors?
Answer:
Fils are the investments made by an individual investor or an investment fund, into the financial markets of another nation. Organisations like hedge funds, insurance companies, pension funds and mutual funds can be called as institutional investors.

Question 2.
What is a Depository Receipt?
Answer:

A depository receipt is a negotiable financial instrument issued by a bank to represent a foreign company’s equity shares or securities.
They are issued to attract a greater amount 01s investment from other countries. Any foreign investor can invest in a foreign stock directly without worrying about differences in currency, accounting practices, or language barriers, etc.

Question 3.
What is a GDR (Global Depository Receipt)?
Answer:
GDR is an instrument issued abroad by a company to raise funds in some foreign currencies and is listed and traded on a foreign stock exchange.

Question 4.
What is an American Depositary Receipt (ADR)?
Answer:
ADR is a dollar denominated negotiable certificate representing a non-US company in US market which allows the US citizens to invest in overseas securities.

Question 5.
What is a Foreign Currency Convertible Bonds?
Answer:
Foreign currency convertible bond is a special type of bond issued in the currency other than the home currency. In other words, companies issue foreign currency convertible bonds to raise money in foreign currency.

Question 6.
Explain the importance of international finance.
Answer:
Importance of International finance:
International finance plays a pivotal role in the international trade and in the sphere of exchange of goods and services among the nations.

International finance helps in calculating exchange rates of various currencies of nations and the relative worth of each and every nation in terms thereof.
It helps in comparing the inflation rates and getting an idea about investing in international debt securities.
It helps in ascertaining the economic status of the various countries and in judging the foreign market.

Question 7.
What are Foreign Currency Convertible Bonds?
Answer:
Foreign currency convertible bond is a special type of bond issued in the currency other than the home country. In otherwords, companies issues foreign currency convertible bonds to raise money in foreign currency.

Question 8.
Explain any three disadvantages of FDI.
Answer:
(i) Exploiting Natural Resources:
The FDI Corhpanies deplete natural resources like water, forest, mines etc. As a result such resources are not available for the usage oN common man in the host country.

(ii) Heavy Outflow of capital:
Foreign companies are said to take away huge funds in the form of dividend, royalty fees etc. This causes a huge outflow of capital from the host country.

(iii) Not Transferring Technology:
Some foreign enterprises do not transfer the technology to developing countries. They mostly transfer second hand technology to the host country.

Question 9.
State any three features of ADR.
Answer:

ADRs are denominated only in US dollars.
They are issued only to investors who are American residents.
The depository bank should be located in US.

Question 10.
State any three features of GDR.
Answer:

It is a negotiable instrument and can be traded freely like any other security.
Indian companies with sound financial track of three years are readily allowed to access international financial markets through GDR. However clearances are required from the Foreign Investment Promotion Board (FIPB) and the Ministry of Finance.
GDRs are issued to investors across the country. It is denominated in any acceptable freely convertible currency.

Question 11.
Describe the importance of international finance?
Answer:

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

Question 12.
Distinguish between GDR and ADR.
Answer:

TN Board 11th Commerce Important Questions Chapter 20 International Finance 1

Question 13.
State any five features of FCCB.
Answer:

FCCB is issued by an Indian company in foreign currency.
These are listed and traded in foreign stock exchange and similar to the debenture.
It is a convertible debt instrument. It carries interest coupon. It is unsecured.
It gives its holders the right to convert for a fixed numbers of shares at a pre-determined price.
It can be converted into equity or depository receipt after a certain period.

Question 14.
Explain any five advantages of FDI.
Answer:
(i) Achieving Higher Growth in National Income:
Developing countries get much needed capital through FDI to achieve higher rate of growth in national income.

(ii) Help in Addressing BOP Crisis:
FDI provides inflow of foreign exchangeresources into a country. This helps the country to solve adverse balance of payment position.

(iii) Faster Economic Development:
FDI brings technology, management and marketing skills along with it. These are crucial for achieving faster economic development of developing countries.

(iv) Generating Employment Opportunities:
FDI generates a lot of employment opportunities in developing countries, especially in high skill areas.

(v) Encouraging Competition in Host Countries:
Entry of FDI into developing country promotes healthy competition therein. This leads to enterprise in developing countries operating efficiently and effectively in the market. Consumers get a variety of products of good quality at market determined price which usually benefits the customers.

Question 15.
Role of World Bank in globalization.
Answer:
The Bretton woods institutions the IMF and World Bank have an important role to play in making globalization work better. They were created in 1944 to help restore and sustain the benefits of global integration by promoting international economic co-operation.

Question 16.
The concept of Hot Money.
Answer:
Hot money refers to funds that are controlled by investors who actively seek short term returns. These investors scan the market for short term, high interest rate investment opportunities. A typical short term- investment opportunity that attracts hot money is the certificate of deposit.

Question 17.
Possibilities of making the western and American countries in favour of Indian Depository Receipt (IDR).
Answer:
An IDR is meant to diversify your holding across regions to free you from a region bias or the risk of a port folio getting too concentrated in the home market you need to study the firms. Financials before you buy its IDR.

Question 18.
Petrodollar system and its future.
Answer:
If you have never heard of the petrodollar system. It will not surprise me. It is certainly not a topic that makes its way out Washington and wall street circles too often. The mainstream media rarely if ever discusses the inner working of the petrodollar system.

Choose the Correct Answer:

Question 1.
An instrument representing ownership interest in securities of a foreign issuer is called:
(a) an ownership certiìcate
(b) a depositary receipt
(c) an ownership receipt
(d) None of the above
Answer:
(b) a depositary receipt

Question 2.
Issuance of DRs is based on the increase of demand in the:
(a) international market
(b) local market
(e) existing shareholders
(d) all of the above
Answer:
(a) international market

Question 3.
ADRs are issued in:
(a) Canada
(b) China
(c) India
(d) the USA
Answer:
(d) the USA

Question 4.
Depositary receipts that are traded in an international market other than the United States are called:
(a) Global Depositary Receipts
(b) International Depositary Receipts
(c) Open Market Depositary Receipts
(d) Special Drawing Rights.
Answer:
(a) Global Depositary Receipts

Question 5.
________ bond is a special type of bond issued in the currency other than the home currency.
(a) Government Bonds
(b) Foreign Currency Convertible Bond
(c) Corporate Bonds
(d) Investment Bonds
Answer:
(b) Foreign Currency Convertible Bond

Samacheer Kalvi 11th Commerce Notes Chapter 20 International Finance

→ International finance is a branch of financial economics that deals with the monetary interaction that occur between two or more – countries. This section is concerned with topics that include foreign direct investment and currency exchange rate. It involves issues pertaining to financial management such as political and foreign exchange risk that comes with managing multinational corporation.

→ International finance place on important role ADRs are issued in the international trade and in the sphere of
exchange of goods and services among the nations.

→ Importance of international finance. International finance helps in calculating exchange rates of various currencies nations.

→ It helps in comparing the inflation rates. It help in ascertaining the economic status of various countries. International finance organisation such as IMF, world bank etc. Mediate and resolve financial disputes among member nations.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Question 1.
Define Multinational Company.
Answer:
“A multinational corporation owns and manages business in two or more countries.” -Neil HJacoby
“MNC is defined to be an enterprise operating in several countries but managed from one country”.

Question 2.
Write any two advantages of MNC.
Answer:
Low cost labour:
MNC set up their facilities in low cost countries and produce goods/ service at lower cost. It gains cost advantage and sells its products and services of good quality at low cost.

Quality products:
The resource experience and expertise of MNC in the sphere ofresearch and development enables the host country to establish its research and development system which helps it in producing quality goods and services at least possible cost.

Question 3.
Give two examples of MNC.
Answer:

TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs) 1

Question 4.
Name the type of business enterprise which operates in more than one country.
Answer:

TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs) 2

Question 5.
What are the advantages of MNC’s?Answer:
Advantages of MNC:
(i) Labour:
MNC set up their facilities in low cost countries and produce goods/service at lower cost. It gains cost advantage and sells its products and services of good quality at low cost.

(ii) Quality Products:
The resource, experience and expertise of MNCs in the sphere of research and development enables the host country to establish its research and development system which helps it in producing quality goods and services at least possible cost.

(iii) Proper Use of Idle Resources:
Because of their advanced technical knowledge, MNCs are in a position to properly utilise idle physical and human resources of the host country. This results in an increase in the Nationalfncome of the host country.

Question 6.
What are the disadvantages of MNC’s?
Answer:
Disadvantages of MNC’s
(i) Danger for Domestic Industries:
MNCs, because of their vast economic power, pose a danger to domestic industries; which 1 are still in the process of development. Domestic industries cannot face challenges posed by MNCs. Many domestic industries have to wind up, as a result of threat from MNCs. Thus MNCs give a setback to the of economic growth host countries.

(ii) Transfer of Outdated Technology:
Where MNCs transfer outdated technology to host nation, it serves no purpose.

(iii)No Benefit to Poor People:
MNCs produce only those things, which are used by the rich. Therefore, poor people of host ) countries do not get, generally, any benefit, out of MNCs.

Question 7.
Name any 2 Indian Multinational Companies in abroad?
Answer:

Indian MNC in abroad.
Suzuki Marathi Suzuki
Timex Timex watches.

Question 8.
Name any 2 Foreign Companies in India?
Answer:

Coca-cola corporation.
International Business Machine.

Question 9.
Multinational companies establish themselves in developing countries to enjoy huge profits by selling consumer goods or luxury items. They start business by offering wide variety of goods at prices cheaper than local retailers offer. But once they are established they increase prices.

(i) State the values the government of a developing country ignores while allowing MNCS to establish in their country.
Answer:

MNC’s produce only those things which are used by the rich, poor people do not get any benefits.
MNC leads to use natural resources of the host country carelessly.
MNC’s tend to promote their culture in home country.
Many domestic industries have to windup, as a result of threat from MNC’s.

(ii) What value do the MNCs violate?
Answer:

Neglect of Industrial and Economic growth of home country.
An investment in home country is not profitable.
Money value also decreased

Question 10.
Public enterprises are established to achieve the goal of economic and social development of the country. They are managed and controlled by Central or State Governments through ministers or government officials. Many times their poor performance i influences the policy formulation and running of the enterprise into loss. Even the big business houses use their influence and get the policies formulated in their favour. State the role of ministers or government to frame the policies for the success of public enterprises.
Answer:

Government policies favourable towards N public enterprise.
Public and human resources also developed in our country.
By providing good services to increase profit.
Government must frame the policies for the success of public enterprise.
No one Can misuse these policies for personal use.
National income will raise by starting MNC’s in home country.

Choose the Correct Answer:

Question 1.
A Multinational Corporation can be defined as a firm which:
(a) is beyond the control of any government
(b) is one of the top 200 firms in the world
(c) owns companies in more than one country
(d) all. the above
Answer:
(c) owns companies in more than one country

Question 2.
Centralised control in MNC’s implies control exercised by:
(a) branches
(b) subsidiaries
(c) headquarters
(d) parliament
Answer:
(c) headquarters

Question 3.
Enterprises operating in several countries but managed from one country is termed as:
(a) government company
(b) multinational company
(c) private company
(d) joint venture
Answer:
(b) multinational company

Question 4.
Dispersal of decision making power to branches/affiliates/subsidiaries by head office represents:
(a) centralisation
(b) decentralisation
(c) power
(d) integration
Answer:
(b) decentralisation

Question 5.
Coca-Cola company is an example of:
(a) MNC
(b) government company
(c) joint venture
(d) public company
Answer:
(a) MNC

Samacheer Kalvi 11th Commerce Notes Chapter 8 Multi-National Corporations (MNCs)

→ The business is coming to realize that education is to business what fertilizer is to farming.

→ The term “ multinational “ consists of two different words “ multi” and “national”. The prefix “multi” means “many” while the word national refers to nations or countries.

→ Multinational company may be defined as a company that operates in several countries such a company has factories, branches and in more than are country.

→ According to the united nations commission on multinational corporations, a multinational corporation is a corporation which operates, in addition to the country in which it is incorporated in one or more other countries.

→ It is also known as global giant, or “ world enterprise “ or international enterprise all forms of business organisation that transcend political frontiers may be called as multinational firms.

→ A multinational company is operated in more than one country simultaneously. It is very large in size. Its purpose is to reduce transport j cost and to make use of raw material, labour, capital and market foreign countries.
(US 60%, Asia 30% and Africa 10%) MNCS.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 13 Warehousing

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 13 Warehousing

Question 1.
What is Warehouse?
Answer:
The term “Ware” means products or goods. “Warehousing”, generally means storage place or godowns which is located near a factory to keep the raw materials and finished products. Storage is only a holding place of goods.

Question 2.
List the various types of Warehouses.
Answer:
A. On the Basis of Ownership:

Private Warehouses.
Government Warehouse.
Public Warehouses.
Co-operative Warehouses
Bonded Warehouses.
Institutional Warehouses.
Distribution Centre Warehouses.

On the Basis of Commodities Stored:

General Warehouses.
Special Commodity Warehouses.
Cold Storages or Refrigerated Warehouses.
Climate Controlled Warehouses.

Question 3.
Give any three functions of Warehouses.
Answer:

Storage.
Price stabilization.
Equalization of Demand and supply.
Businesss, Finance.
Risk bearing.

Question 4.
Tabulate the three differences between warehouse warrant and warehouse receipt.
Answer:

Warehouse Warrant	Warehouse Receipt
It is a document of title of goods	It is not a document of title of goods
It is not only an acknowledgement for the receipt of goods but also gives an authority to get delivery of goods by the owner or by third party.	It is only an acknowledgement for the receipt of goods.
It can be negotiated or transferred to others.	It cannot be transferred to others.

Question 5.
Give a note on FCI.
Answer:
It provides storage facilities for food grains. Food Corporation of India also hires storage capacity from other sources such as Central Warehousing Corporation, State Warehousing Corporation and private parties.

Question 6.
Differentiate the warehouse warrant from the warehouse receipt.
Answer:

Warehouse Warrant	Warehouse Receipt
It is a document of title of goods.	It is not a document of title of goods.
It is not only an acknowledgement for the receipt of goods but also gives an authority to get delivery of goods by the owner or by third party.	It is only an acknowledgement for the receipt of goods.
It can be negotiated or transferred to others.	It cannot be transferred to others.
It can be given a collateral security for getting financial assistance.	It cannot be given as collateral security.
Delivery of goods effected by surrendering this warrant with endorsement,	Delivery is effected by surrendering this receipt with letter from depositor.

Question 7.
Comment on cold storage warehouse.
Answer:
Goods are transported in refrigerated containers and stored in refrigerated warehouses. These warehouses are used for storing perishable goods like fruits, vegetables, eggs, butter, fish, meat, etc. Goods stored in cold storages without deterioration in quality, can be made available throughout the year.

Question 8.
Explain the different types of warehouse.
Answer:
A. On the Basis of Ownership:
(i)Private Warehouses:
Private warehouses are built and owned by private business enterprises in order to store the products produced by them. They are exclusively for their use.

(ii) Government Warehouses:
They are created and operated by the Government to implement the programmes of the Government. Their services mostly available to government only.

(iii)Public Warehouse:
It is open for public at large. Most of the business organisations, especially small and medium scale units cannot afford to have their own warehouses. They may be owned by an individual or some agency.

(iv) Co-operative Warehouses:
There are warehouses owned and managed by the marketing co-operative societies or agricultural co-operative societies. They are set up to provide warehousing facilities to their members. Example, National Co-operative Development Corporation (NCDC).

(v) Bonded Warehouses:
Bonded warehouses are those warehouses, which are licensed by the government to accept storage of imported goods which are not cleared due to nonpayment of customs duty by the importer.

(vi) Institutional Warehouses:
Different institutions and bodies have their own warehouses on account of the nature ofN their operations. For example, Banks, Railways, etc, have their own warehouses for conducting their activities.

(vii) Distribution Center Warehouses:
Goods which need to be temporarily stored for one or two days so that they can be distributed to other offices or customers are stored in Distribution Centers. They are owned by th; manufacturer or wholesalers.

B. On the Basis of Commodities Stored:

(i) General Warehouses:
They are ordinary warehouses which are useful for storing most of the dry food grains, fertilisers, etc.

(ii) Special Commodity Warehouses:
These warehouses are specially constructed for storing specific type of commodities like tobacco, cotton, wool etc. These warehouses reduce loss of quality and quantity to a great extent.

(iii) Cold Storages or Refrigerated Warehouses:
Goods are transported in refrigerated containers and stored in refrigerated warehouses.

(iv) Climate Controlled Warehouses:
The controlled climate environment can reduce the rate of metabolism in fruits and vegetables.

(v) Automated Warehouses:
Automated facilities which can handle several hundreds of kilograms of product at a time. Inside the warehouse premises physical distribution activities are carried out by moving product filled pallets (i.e. platforms that hold large amounts of product). It requires huge investment, latest technology and large turnover of goods.

Question 9.
Explain the advantages of warehousing functions.
Answer:

It safeguards the stock of the merchants who do not have storing place.
Warehouses reduce 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 appoint a wholesaler or retailer.
It assists in maintaining the continuous sales and avoids the possibilities of “out of stock” position.
It creates employment opportunities for both skilled and unskilled workers, to improve their standard of living.

Question 10.
The warehouse of the future: How will it impact efficiency?
Answer:
From 2019, new technology could be revolutionary and improving efficiency in warehouse by Warehousing Management System (WMS). Technologies including artificial intelligence, 3D printing and self- driving vehicle could be more widely used in warehouses- everywhere sooner than you think. By 2030, warehouses will be a part of initiative to achieve Zero net energy.

Warehouse buildings will operate 24 × 7 × 365 and be designed with sustain¬ability. By creating strategies, warehouse will save costs and prevent harmful emissions. Solar panels will become the main sources of energy for warehouses. This will assist in running the warehouse lighting and equipment. As well as recharging the electric vehicles that make deliveries. New technologies could be increasing the efficiency of how warehouse are run from as soon 2019.

Choose the Correct Answer:

Question 1.
Warehouses remove the hindrance of:
(a) person
(b) time
(c) risk
(d) knowledge
Answer:
(b) time

Question 2.
A warehouse holds goods as a _______ center.
(a marketing
(b) sorting
(c) distribution
(d) spiling
Answer:
(c) distribution

Question 3.
_______ can be given as a collateral security for getting financial assistance from bank.
(a) Dock warrant
(b) Warehouse receipt
(c) Dock receipt
(d) Warehouse warrant
Answer:
(d) Warehouse warrant

Question 4.
_______ warehouses are licensed by the government and are permitted to accept the goods on bond.
(a) Bonded
(b) Cold Storage
(c) Public
(d) All the Above
Answer:
(a) Bonded

Question 5
_______ warehouses are used for storing perishable goods like fruits, vegetables etc.
(a) Bonded
(b) Private
(c) Cold storage
(d) Co-operative
Answer:
(c) Cold storage

Question 6.
The document which authorizes to deliver the goods either in part or full is called:
(a) warehouse warrant
(b) dock receipt
(c) dock warrant
(d) none of these
Answer:
(c) dock warrant

Question 7.
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.
Answer:
(c) food corporation of india

Samacheer Kalvi 11th Commerce Notes Chapter 13 Warehousing

→ People demand different products at different seasons. There may not be demand for all goods in all seasons. For example woolen clothes are demanded in winter and cotton clothes are demanded in summer. But production of these items has to be started before the season begins. Storage is a palace where goods are stored.

→ After production these goods have to be carefully stored preserved till the time they are demanded warehouse it is located near the market to perform other marketing functions such as grading, standardization blending, mixing, packing etc. therefore we may say that a warehouse center helds goods as a distribution center.

→ Here the question of wastage of goods does not arise. The central warehousing corporation was established in 1957 storage capacity is 6.77 million food corporation of India. Available tonnes storage capacity is 20.33 million tonnes. State warehousing corporation storage capacity is 9.70 million tonnes.

→ Tamil Nadu warehousing corporation storage capacity is 6.3 lakh tonnes. All farmers using this facilities for their agriculture inputs. Wastages of products avoided by the all warehouses.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 12 Functions of Commercial Banks

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 12 Functions of Commercial Banks

Question 1.
What is Mobile Banking?
Answer:
Most of the commercial banks have designed computer programs palled apps which can be downloaded in smart phones. With this app in the smart phone a customer can operate his account transactions from anywhere. This service is known as mobile banking.

Question 2.
Briefly explain the need for Debit card.
Answer:
ATM card is also called debit card. This card is more useful in purchase of goods and services anywhere in India, if the shop maintains a swiping machine facility. VISA card and Maestro card services are offered by Visa Corporation and Mastercard both from the USA. RuPay cards services were launched in March 2012 by the National Payments Corporation of India.

Question 3.
Briefly explain the term – Credit card.
Answer:
Banks issue credit cards to customers and other eligible persons. With this card, the holder can purchase goods and services on credit at any shop in India. If the dues are paid within the stipulated time no interest is charged. The credit limit is fixed by the issuing bank based on the income of the card holder.

Question 4.
What do you mean by ATM?
Answer:
A customer can withdraw money anytime, anywhere in India from the ATM machine using the ATM card given by his/her bank. The machine also shows the balance available in the customers’ account, provides statement print of the few past transactions, etc.

Question 5.
Write a note on – ECS.
Answer:
ECS was launched by the RBI in 1995. It is an electronic method of fund transfer from a bank to another bank. ECS credit can be used to credit salary, dividend, interest, pension etc. and ECS debit is used to debit monthly telephone bills, electricity bills, equated monthly installments (EMI) payments in the clearing house.

Question 6.
What is E-Banking?
Answer:
This reduces cost and time and makes banking service convenient to the customers. It is operated through Internet. This service is a substitute for drafts, cheques and other paper based transfer of funds.

Question 7.
Write a short note on RTGS.
Answer:
Real Time Gross Settlement systems:
It was launched by the RBI in 2013. The transactions are settled on real time basis. Gross settlement means the transaction is settled between one bank and another bank without adding any other transactions.

Question 8.
Briefly explain the Diversified banking services of commercial banks.
Answer:
Competition in the banking industry has reduced their profits. Therefore the commercial banks started identifying and offering new and diversified financial services. They are purely other than banking services. Providing all such banking and other financial services is also called universal banking.

Question 9.
Explain – NEFT.
Answer:
National Electronic Fund Transfer: This 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. Transactions do not occur under real time basis. Once in every half hour from 8.00 am to 7.30 pm. 23 settlements are allowed in a day.

Question 10.
What do you mean by Core Banking Solutions?
Answer:
‘CORE’ stands for ‘Centralized Online Real time Exchange’. In the centralized server of the bank, all the details of all the accounts of all the branches of the bank are available. A customer can withdraw money through cheque at any branch of that bank throughout the world. Similarly anyone can deposit money into the account. Entry of the transactions is recorded in the centralized server of the bank in real time and can be seen in all the branches of the bank. This facility is called core banking solutions.

Question 11.
Discuss the various primary functions performed by the commercial banks.
Answer:
The primary functions of a commercial bank are of three types. They are:
(a) Accepting Deposits,
(b) Granting Loans and Advances , and
(c) Creation of Credit.
(a) Accepting Deposits:
The basic deposit accounts offered by commercial banks are listed below. In these days banks compete with each other to attract customers by adding facilities to these deposit accounts. Broadly deposit accounts can be classified into demand deposits and time deposits.

(i) Demand Deposits:
These deposits are repayable on demand on any day. This consists of savings deposits and current deposits.

(ii) 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.

(iii) 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. If not penal interest is charged. No interest is paid for’the balance in this account. Some banks have started offering interest on these account balances.

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

(v) Fixed Deposits (FD):
Certain amount is deposited for a fixed period for a fixed rate of interest. FDR (fixed deposit receipt) is given to the depositor. Rate of interest is higher than savings account. On the date of maturity the principal along with interest for the fixed period is paid.

(vi) 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. At the end of the period the deposited amounts along with interest .are returned to the customer.

(b) Granting Loans and Advances:
The second primary function of commercial banks is lending money in order to earn interest income.

(A) Advances:
(i) Overdraft:
It is a credit facility extended mostly to current account holding business community customers. It is an arrangement reached between the banker and the credit worthy customers.

(ii) Cash Credit:
It is a secured credit facility given mostly to business institutions. Stock in hand, raw materials, other tangible assets, etc. are provided as collateral. A certain sum is allowed as credit for a short period.

(iii) Discounting of Bills:
Business customers approach banks to discount the commercial bills of exchanges and provide money.

(B)Loans:
Short term and medium term loans are provided by commercial banks against eligible collaterals to business concerns. It is a definite sum of money lent for a definite period. It is repayable in one lump sum or in installments.

Housing Loan,
Consumer Loan,
Vehicle Loan,
Educational Loan,
Jewel Loan.

(C) Creation of Credit:
Apart from the currency money issued by the RBI, the credit money in circulation created by commercial banks influence economic activities of a country to a large extent. Credit money of commercial banks is far greater in volume than the currency money.

Question 12.
Explain the various secondary functions of commercial banks.
Answer:
Apart from the basic or primary functions commercial banks render various other services which are known as secondary functions. These services can be broadly classified into agency services and general utility services.

I. Agency Functions:
Banks act as agents of customers and provide certain services. They are called Agency Functions which are as follows:

(i) Transfer of Funds:
Banks issue demand drafts, bankers’cheques, travelers’cheques, etc. and help in transfer of funds from one place to another.

(ii) Periodic Payment of Premiums, Rent, etc:
After instruction from the customers, banks undertake the monthly payment of insurance premium, rent, telephone bill, etc. from the accounts of customers.

(iii) Collection and Payment of Cheques:
On behalf of customers bank collect the cheques deposited into the accounts of customers from other banks and deposit cash in the customers’ accounts. Similarly cheques issued by a customer is honoured and the amount paid as directed by the customer.

(iv) Acting as Executors, Trustees and Attorneys:
Banks act as executors of will of the customers and implement their will after their death.

(v) Conduct Share Market Transactions:
A Demat account should be opened with Depository Participant and that demat account should be linked with savings bank account by the customer.

II. General utility functions:
In addition to primary, secondary and agency functions, commercial banks offer some services for the general welfare of the customers. They are called general utility services. They are as follows.

issue of demand drafts and bankers’ cheques.
Accepting Bills of Exchange on behalf of Customers.
Safety lockers.
Letters of credit.
Travellers cheques.
Gift cheques.

Question 13.
In all ATM Centers, there are one or two machines, sometime it may be four or five. All ATM machines have some amount of money inside the box. In this way lot of currency notes are locked day by day. Think about the alternate way for avoiding this locking of currency notes. Debate about the security problem in E-Banking system of services.
Answer:
Bank visit:
I want to go to bank of India. First I asked regarding how to open bank account. How to operate bank account. What is the minimum balance. How to take money from the bank. How to use ATM cards. Operate E-Banking system. How will you get credit card.

When you want loan:
We want to get loan. First of all open bank account. Operate bank account atleast one year correctly. Want to get loan bank will check our credit worthiness, our monthly salary or by way of getting monthly income. The eligibility to get loan. To show our all our ID proofs and address proofs, pan card etc. Bank also want to check our credit score. Then only get bank loans. Surety want to give against loan.

Question 14.
Field visit – nearest – collect information about rate of interest payable on Savings deposit, Fixed deposit, Current deposit and Recurring deposit. Collect photo copies of the various cards used in our day- to-day life. Nowadays debit card, credit card, smart cards and other cards are used for day to day purposes. In future how many cards we may use for our purposes.
Answer:

Commercial banks: Canara bank, Punjab National Banks, Industrial banks.
Industrial Banks: IDBI; Industrial Development Bank of India. ICICI: Industrial Credit and Investment Corporation of India.
Co-operative banks: Central co-operative bank, Agricultural co-operative bank. .
Foreign bank: Standard charter bank. HSBC.

Question 15.
A person forgot his password of Debit card, How to get password? Give guidelines to him.
Answer:
Forget his password:
1st Step:
Banker asked his customer his registered phone number. Then from bank we can get one time password (OTP) through the registered phone number and get password easily.

2nd step:
Customer can get new password from bank manager. The manager will guide properly and help the customer to get new password.

3rd Step:
Using ATM card and customer registered phone number he can get password.

Choose the Correct Answer:

Question 1.
Electronic banking can be done through:
(a) Computers
(b) Mobile phones
(c) ATM
(d) All of the above
Answer:
(d) All of the above

Question 2.
Minimum how much amount can be transferred through RTGS?
(a) Any amount
(b) 50,000
(c) 2 lakh
(d) 5 lakh
Answer:
(c) 2 lakh

Question 3.
The largest commercial bank of India:
(a) ICICI
(b) SBI
(c) PNB
(d) RBI
Answer:
(b) SBI

Question 4.
In which kind of account, it is compulsory to deposit certain amount at certain time?
(a) Saving deposit
(b) Fixed deposit
(c) Current deposit
(d) Recurring deposit
Answer:
(d) Recurring deposit

Question 5.
Which of the following is not a type of advance provided by commercial bank?
(a) Collecting and supplying business information
(b) Overdraft
(c) Cash credit
(d) Discounting of bills
Answer:
(a) Collecting and supplying business information

Samacheer Kalvi 11th Commerce Notes Chapter 12 Functions of Commercial Banks

→ Banks play a very important role in economic development. Banking is considered to be the nerve centre of trade, commerce and business in a cquntry. It plays vital role in distributing the money for the development of trade, industry and commerce.

→ Bankers are not only dealers in money but also leaders in economic development. Bank is an institution which deals in money and credit.

→ Banks which help for the development of trade and commerce are called commercial banks. The commercial banks may be owned by government or owned by private sector functions of commercial banks can be classified into two categories.
(a) Primary or Banking functions.
(b) Secondary or Subsidiary functions.

→ Primary function includes accepting deposits and making loans and advances. Secondary functions includes agency functions and utility functions or services.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 11 Types of Banks

November 30, 2021

TN State Board 11th Commerce Important Questions Chapter 11 Types of Banks

Question 1.
Give the meaning of commercial banks.
Answer:
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. They also provide other services like remittance of funds, safe keeping of valuables, collection of cheques, issue of letters of credit, etc.

Question 2.
What do you mean by industrial Banks?
Answer:

These banks assist to promote industrial development by providing medium and long term loans. For eg: IDBI, ICICI, are known as industrial banks.
Huge, finance required for investment, expansion and modernisation of big indus¬tries and others are granted by a separate type of banks called development banks.

Question 3.
Briefly explain about Correspondent Banks?
Answer:

Banking Correspondents (BCs) are retail agents engaged by banks for providing banking services at low cost in locations other than a bank branch/ATM. They are not separate banks recognized by the RBI.
BC model was introduced by the RBI in 2006 to provide services at door steps.

Question 4.
What are Foreign Banks?
Answer:
Banks which have registered office in a foreign country and branches in India are called foreign banks. These banks open their offices in big cities and port towns only.

Question 5.
Write a short note on Local Area Banks, Give two examples.
Answer:
Local Area Bank (LAB) scheme was introduced by the RBI in August 1996. LABs are small private sector banks established in rural and semi-urban areas. Each bank serves two or three adjoining districts only.
eg:

Coastal Local Area Bank, Vijayawada, Andhra Pradesh.
Krishna Bhima Smruddhi Local Area Bank, Mahabubnagar, Telangana.

Question 6.
What are the objectives involved in Regional Rural Banks?
Answer:
The RRBs were formed under the Regional Rural Bank Act 1976, jointly by the Central Government, State Government, and a sponsor bank. Their share capital is contributed by these sponsors in the ratio of 50:15:35. They are established as low cost institutions in rural areas.

Their objective is to develop, rural economy and play supplementary role to cooperative societies. They mobilise deposits from the rural public and provide finance to rural artisans, small entrepreneurs and farmers and try to avoid their dependency on money lenders. As on 31.3.2016, there were 56 RRBs in India with 14,494 branches. They are regulated and supervised by NABARD.

Question 7.
Mention the purposes of Agricultural and Co-operative banks.
Answer:
All cooperative banks in India are owned by its customers or members who are farmers, small traders and others. Cooperative banks in India are either urban based or rural based. Rural cooperative banking structure in India has three tier structure for short term loans and two tier structure for long term loans (refer chart).

For both these structures the apex body is National Bank for Agricultural and Rural Development – NABARD. All cooperative banks in Tamil Nadu are registered under Tamil Nadu Cooperative Societies Act 1983. They are controlled by both RBI and the State Government. Their foremost objective is providing service to its members for rural and agricultural development and not profit earning.

Question 8.
Explain the various types of banks based on organization with examples.
Answer:
On the basis of organsiation the banking may be branch banking and unit banking.
(i) Branch banking:
In most of the countries a typical commercial bank will be large institution with a network of branches scattered all over the world. Branch banking it is a big organisation with head office regional office and branches. Britain is the pioneer in this system, eg: In England big four banks. Namely Midland, Lioyds, Bardays.

(ii) Unit banking:
It refers to banking operation with only one office without any branches or some branches within the strictly limited area. The United States of America plays a vital role in unit banking system.

Question 9.
Explain the types of banks based on ownership pattern.
Answer:
Based on the Ownership Pattern:
Any bank in which not less than 51 percent of shares are owned by the Government are called Government banks or public sector commercial banks (Total21). All nationalized banks (19 banks, in 2017), SBI and IDBI Ltd. are public sector commercial banks. All of them are joint stock company type banks.

There are corporation type banks. Each corporation type bank is established by a separate Act of Parliament and is fully owned by Government of India, eg: IFCI, SIDBI, EXIM Bank, etc.

All banking companies owned by private people are called private sector commercial banks. All cooperative banks are owned by its members from the public.

In 1969, there were 14 private banks which were concentrated in cities and towns. Their objective was to earn more profits. In order to channelize the funds with these commercial banks towards national priorities and to develop agricultural and rural sector . nationalization of banks was undertaken.

Government paid the share capital of those banks to the private owners and took over as Government banks. This is called nationalization of banks. 6 more banks were nationalised in 1980. New Bank of India one of the nationalised bank merged with Punjab National Bank in 1980 and today there only 19 nationalised bank (2017).
eg:
(i) Nationalised Banks: Indian bank, Indian Overseas Bank, Oriental Bank of Commerce.
(ii) Public Sector Banks: State Bank of India, IDBI Bank Ltd. and all nationalised banks.
(iii) Private Sector Banks: Lakshmi Vila Bank, Karur Vysya Bank, Kotak Mahindra bank.
Note: Bharatiya Mahila Bank was established on 19, November 2013 to serve exclusively women members of the public was merged with SBI on 31 March, 2017.

Question 10.
Debate about the benefits of various banks.
Answer:

Savings and capital formation.
Canalization of savings.
Implementation of monetary policy.
Encouragement to industries.
Regional development.
Development of Agriculture of other neglected sectors.

Question 11.
Bank visit – write an essay about the bank you visited.
Answer:
While filling the form. I asked for her ID proof. To my amazement she took out a polythene bag full of all sorts of cards. Some cards had her picture on them and some were of her husband. 1 look for her Adhaar Card and filled in the details after 15 minutes of interrogation.

I completed her from where applicants signatures were required. She with all her concentration held the pen as if it was a discomforting object to hold and wrote her name in Hindi. Her hand writing similar to that of a kid of UKG class may be a bit better.

Question 12.
When you want loan how will you get the loan from bank?
Answer:

Banks are see the eligibility to get loans.
Salaried people to get loan.
Three months bank statement.
ID proof.
Address proof.
Repayment sources.
Equal asset as a surety.

Question 13.
Mention the names of Commercial Banks, Industrial Banks, Cooperative Banks and Foreign Banks in your areas.
Answer:
Commercial banks are:

Canara Bank
Punjab National Bank
Lakshmi Villas Bank.

Industrial banks are:

IDBI : Industrial Development Bank of India.
ICICI; Industrial Credit and Investment Corporation of India.

Co-operative banks are;

Central co-operative bank.
Land Development bank.

Foreign banks are:

Standard Chartered Bank.
Bank of England.

Question 14.
Collection of pictures related to different types of banks.
Answer:

TN Board 11th Commerce Important Questions Chapter 11 Types of Banks 1

Question 15.
You are the Agricultural bank manager; a farmer approaches you for loan from your bank for purchasing a tractor and other farm equipment. How would you sanction the loan?
Answer:
Regarding land details: Whether he is small farmer. Whether he is eligible to get loan repayment sources.

Question 16.
Due to natural calamities, the farmer could not repay the loan. He has no other way to repay the loan. How to collect loan from the farmer?
Answer:
Banker collect loan from farmer by way of Personal property. But without interest banker collect loan from the farmer. Sometimes farmer has no way to repay the loan. Loan will become bad debt.

Choose the Correct Answer:

Question 1.
Which bank is not an Industrial Bank?
(a) ICICI
(b) HSBC
(c) SIDBI
(d) IDBI
Answer:
(b) HSBC

Question 2.
The Local Area Banks are promoting:
(a) Rural savings
(b) Business savings
(c) Industrial development
(d) Agricultural development
Answer:
(a) Rural savings

Question 3.
Foreign banks are begun their operation since:
(a) 1978
(b) 1979
(c) 1980
(d) 1981
Answer:
(c) 1980

Samacheer Kalvi 11th Commerce Notes Chapter 11 Types of Banks

→ There are different types of banks performing different sets of functions. Though all types of banks deal in money, each type cater to the needs of different sectors, study of all these types of bank is essential.

→ In the modem money economy. Banks play a vital role in economic development. Banks are play a important role in monetary policy, Success of business is determined by volume of finance available.

→ Such finance is provided by banks. So study of banking is important in commerce. Banks provide finance to the farmers, industrialists, traders and other business organisation.

→ Function of banks. Banks accepts deposits from public and grant loans to traders and individuals.

→ Huge finance is required by industries. Loans are granted by development banks.

→ The functions of co-operative banks loan granted by co-operative banks to farmers, Small scale business.

→ In modem times internet banking and mobile banking are very popular.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 19 Sources of Business Finance

November 29, 2021

TN State Board 11th Commerce Important Questions Chapter 19 Sources of Business Finance

Question 1.
Write a short notes on debentures.
Answer:
The term debenture refers to a document issued by a company acknowledging a debt due by it to its holders. It also provides for payment of interest at a fixed rate at stated intervals. It also contains an undertaking to repay the debt or at its option. It is usually under the common seal of the company.

Question 2.
What do you mean by public deposits?
Answer:
Under this method, companies invite public deposits by giving advertisement in the media. It offers deposit schemes for a longer tenure. Person interested in making public deposit has to undergo a simple formality. The interest rates offered by companies on public deposits .are relatively higher than the bank.

Question 3.
Name any two sources of funds classified under borrowed funds.
Answer:
The term ‘borrowed funds ’ denotes the funds raised through loans or borrowings. For example debentures, loans from banks.
eg: debentures, loans from banks and financial institutions.

Question 4.
Name any two internal sources of business finance.
Answer:
This includes all those sources generated from within the business enterprises. For instance retained earnings, collection from receivables (trade debtors and bills receivable). Surplus from sale of old fixed assets etc.

Question 5.
State any two factors that affect the choice of source of finance.
Answer:

Cost.
Financial Capacity of the Firm.
Forms of Organisation.
Time period.
Control.

Question 6.
Define Business finance.
Answer:
“Finance is that business activity which is concerned with the acquisition and conservation of capital fund in meeting the financial needs and overall objectives of business enterprises.” – B.O.Wheeler

Question 7.
What is pledge?
Answer:
A customer transfers the possession of an article with the creditor (banker) and receives loan. Till the repayment of loan, the article is under the custody of the borrower. If the debtor fails to refund the loan, creditor (banker) Will auction the article pawned and adjust the outstanding loan from the sale proceeds.

Question 8.
List sources of raising long-term and short-term finance.
Answer:

Business finance is classified into three types with reference to time period i.e. Long term finance (more than 5 years), Medium term finance (above 1 year but below 5 years) and Short term finance (within one year) for carrying on business operations.
Long term finance can be mobilized by issue of shares and debentures, term loans from commercial banks and financial institutions, and retained earnings. Short term fiance can be raised through public deposits, trade credit, customer advance, hypothecation, cash credit, bank overdraft, pledge, mortgage etc.

Question 9.
For which purpose fixed capital is needed in business?
Answer:
“Finance is the lifeblood of any business.” No business enterprise can function without finance. Business enterprises need finance for fixed and working capital requirement. Fixed capital requirements include purchase of plant, machinery, furniture, fixtures, vehicles etc.

Question 10.
What do you mean by working capital requirement of business?
Answer:
Working capital requirements include purchase of raw materials, payment of salary and wages, incurring operating expenses like telephone bills, carriage inward and outward, electricity charges, premium, stationery, etc.

Question 11.
List out the various sources of financing.
Answer:
I. On the basis of period:
The different sources of finance can be further grouped into three categories on the basis of period.
(i) Short term finance.
(ii) Medium term finance.
(iii) Long term finance.

(i) Sources of Short term Finance:
Loans and Advances, Bank Overdraft, Discounting Bills of Exchange, Trade Credit, Pledge, Hypothecation, Mortgage, Loans Against the Securities, Clean Loan, Commercial Paper (CP), Hire Purchase Finance, Factoring.
(ii) Sources of Medium Term Finance: Loans from Banks, Loan from Financial Institutions and Lease Financing.
(iii) Sources of Long Term Finance: Shares, Equity Shares, Preference Shares, Debentures, Retained Earnings, Public Deposits, Long Term Loan from Commercial Banks, The Loans from Financial Institutions.

II. On the Basis of Ownership:
(i) Owner’s Funds
(ii) Borrowed Funds

III. On the Basis of Generation of Funds :
(i) Internal Sources
(ii) External Sources.

Question 12.
What are the different types.of short term finances given by commercial banks?
Answer:
(i) Loans and advances:
Loan is a direct advance made in lump sum which is credited to a separate loan account in the name of borrower. The borrower can withdraw the entire amount in cash immediately.

(ii) Bank overdraft:
Bank overdraft refers to an arrangement whereby the bank allows the customers to overdraw the required amount from its current deposit account within a specified limit.

(iii) Discounting bills of exchange:
When goods are sold on credit, the suppliers generally draw bills of exchange upon customers who are required to accept it.

(iv) Trade credit:
Trade credit is the credit extended by one trader to another for the purpose of purchasing goods and services. Purchaser need not pay money immediately after the purchase.

(v) Pledge:
A customer transfers the possession of an article with the creditor (banker) and receives loan. Till the repayment of loan, the article is under the custody of the borrower. If the debtor fails to refund the loan, creditor (banker) will auction the article pawned and adjust the outstanding loan from the sale proceeds.

Question 13.
Write short notes on (i) Retained Earnings (ii) Lease financing.
Answer:
(i) Retained earnings:
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.

(ii) 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. 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.

Question 14.
Write short notes on
(i) owner’s funds
(ii) borrowed funds.
Answer:
(i) Owner’s funds:
Owner’s funds mean funds which are provided by the owner of the enterprises who may be an individual, or partners or shareholders of a company. The profits reinvested in the business (ploughing back of profit or retained earnings) come under owner’s funds. These funds are not required to be refunded during the life time of business enterprise. It provides the owner the right to control the management of the enterprise.

(ii) Borrowed funds:
The term ‘borrowed funds’ denotes the funds raised through loans or borrowings. For example debentures, loans from banks and financial institutions, public deposits, trade credit, lease financing, commercial papers, factoring, etc. represent borrowed funds.

(a) These borrowed sources of funds provide specific period before which the fund is to be returned.
(b) Borrower is under legal obligation to pay interest at given rate at regular intervals to the lender.
(c) Generally borrowed funds are obtained on the security of certain assets like bonds, land, building, stock, vehicles, machinery, documents of title to the goods, and the like.

Question 15.
Explain any four personal investment avenues.
Answer:
(i) Public Provident Fund (PPF):
It is the safest long-term investment option for the investors in India. It is totally tax-free. PPF account can be opened in bank or post office. The money deposited cannot be withdrawn before 15 years and an investor can earn compound interest from this account.

However the investor can extend the time frame for the next five years if the investor does not opt to withdraw the amount matured for payment at maturity date. PPF investor can take loan against PPF account when he/she experiences financial difficulties.

(ii) 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. Systematic.investment plan is one of the best investment options in India.

(iii) Direct Equity or Share Purchase:
An individual can opt for investment in shares. But he has to analyse the market price of various shares traded in stock exchange, reputation of the company, consistency in the payment of dividend, the nature of the project undertaken by the company, growth prospects of industry in which a company is operating, before investing in shares.

If the investment is made for a long time, it may yield good return. However there is equally risky to invest in shares as there is no guaranteed return therein.

(iv) Real Estate Investment:
Real estate is one of the fastest growing sectors in India. Buying a flat or plot is supposed to be the best decision amongst the investment options. The value of the real asset may increase substantially depending upon the area of location and other support facilities available therein.

However an investor in real estate has to be cautious and circumspect in verifying the genuineness of the title deeds before investing in real estate assets and also the reputation of seller of real assets.

Question 16.
Gokul Steel Ltd is a large and credit worthy company that manufactures steel for the Indian market. It now wants to cater the Asian market and decides to invest in new hi-tech machines. Since the investment is large, it requires long term finance. It decides to raise funds by issuing equity shares. The issue of equity shares involves huge floatation cost. To meet the expenses of floatation cost, the company decides to tap money market.

(a) Name and explain the money-market instrument the company can use for the above purpose.
Answer:
The help the central bank in regulating liquidity in the economy. Money market help short-term fund user to fulfill their needs reasonable costs.

(b) What is the duration for which the com party can get funds through the instrument?
Answer:
These instruments are shoft-term notes issued by state and municipal governments although they carry some what more risk than T-bills and tend to be less negotiable. They feature the added benefit that the interest is not subject to federal income tax. For this reason corporation find that the lower yield is worth while on this type of short-term investment.

(c) State any other purpose for which this instrument can be used.
Answer:
Financial instruments are assets that can be traded. They can also be seen as packages of capital that may be traded. Most type of financial instruments provide an efficient flow and transfer of capital all throughout the world investors. These assets can be cash a contractual right to deliver or receive cash or another type of financial instrument or evidence of one’s ownership of an entity.

Question 17.
Working of chit funds.
Answer:
Equity mutual funds are managed by professional and certified funds managers who have expertise and experience in financial markets. As mutual funds collect money from many investors the cost of asset management is divided between a larger number of people. Thus reducing the assets management fee per person.

Question 18.
Finance for bonded labour.
Answer:
“Debt bondage” also known as debt slavery or bonded labour is a person’s pledge of labour or service as security for the repayment for a debt or other obligation where there is no hope of actually repaying the debt.

Question 19.
Export finance for small entrepreneurs.
Answer:
Exporting goods and services can bring significant opportunities for companies of all sizes. By tapping into new markets and new revenue streams. Companies can access a larger customer base and grow their business. Importantly these opportunities are not limited to large corporations.

Question 20.
Financing software companies run by young graduates.
Answer:
Even employees already working in the financial sector eyeing opportunities in tech; In a new study of over 800 financial services employees in partnership with kronos. We found that one-fourth are more interested in working in the tech industry than finance. Finance as a career choice is down 22% from 2008 and graduates from the top 10 MBA schools are now 40% less likely to work’ in investment banking.

Choose the Correct Answer:

Question 1.
What is defined as the pro vision of money at the time when it is required?
(a) finance
(b) bank
(c) cash management
(d) none of these
Answer:
(a) finance

Question 2.
Internal sources of capital are those that are:
(a) generated through outsiders such as suppliers
(b) generated through loans from commercial banks
(c) generated through issue of shares
(d) generated within the business
Answer:
(d) generated within the business

Question 3.
Debenture holders are entitled to a fixed rate of:
(a) dividend
(b) profits
(c) interest
(d) ratios
Answer:
(c) interest’

Question 4.
Public deposits are the deposits which are raised directly from:
(a) the public
(b) the directors
(c) the auditors
(d) the owners
Answer:
(a) the public

Question 5.
Equity shareholders are the _________ of a company.
(a) creditors
(b) owners
(c) debtors
(d) employees
Answer:
(b) owners

Question 6.
Funds required for purchasing current assets is an example for:
(a) fixed capital requirement
(b) ploughing back of profits
(c) working capital requirement
(d) lease financing
Answer:
(c) working capital requirement

Question 7.
Which of the following holder is given voting right?
(a) Debentures
(b) Preference Shares
(c) Equity shares
(d) Bonds
Answer:
(c) Equity shares

Question 8.
It may be wise to finance fixed assets through:
(a) creditors
(b) long term debts
(c) bank overdraft
(d) bills discounting
Answer:
(b) long term debts

Samacheer Kalvi 11th Commerce Notes Chapter 19 Sources of Business Finance

→ First study the concept of business. Need for the business finance, sources of funds and the importance of savings and personal investment avenues.

→ Finance is the lifeblood of any business no business can run without finance. Business enterprises need finance for fixed and working capital requirement. Fixed capital requirement include purchase of plant, machinery, furniture, fixtures, vehicles and so on.

→ While working capital requirement, includes purchase of raw materials, payment of salary and wages, incurring operating expenses like telephone bills carriage inward and outward, electricity charges, premium stationary etc. owner or promoter has to estimate the business finance and accordingly look for various sources of financing the operations of the enterprises.

→ Sources of finance loans from banks, trade credit pledge the article land and building mortgage loan, loans against securities. Commercial paper getting loan in the form of promissory note, loans from financial institutions (medium term finance). Long term sources issue of shares debentures.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 18 Business Ethics and Corporate Governance

November 28, 2021

TN State Board 11th Commerce Important Questions Chapter 18 Business Ethics and Corporate Governance

Question 1.
What is ethics?
Answer:
Ethics is derived from the Greek word ‘ethos’ which means a person’s fundamental orientation towards life. It governs the behaviour, derived from the moral standards which help to determine right or wrong, good or evil.

Question 2.
What do you mean by code?
Answer:
The organisation principles are defined in the written document is called code.

Question 3.
State two ways by which ethics influences behavior.
Answer:

To offer goods at fair prices.
To supply quality goods and not to deal in spurious and sub standard products.

Question 4.
What is need for Corporate Governance?
Answer:

Corporate governance is the system by which businesses are directed and controlled in the best interest of all stakeholders.
Good corporate governance enables corporate success and economic development.

Question 5.
What are MNCs?
Answer:

A Multinational corporation is an organization doing business in more than one country.
It engages in various activities like exporting, manufacturing in different countries.

Question 6.
Define business ethics.
Answer:
Business ethics may be defined as a set of moral standards to be followed by ) owners, managers and business people. ( These standards determine the conduct and behaviour of business people. Business ethics reflects the conduct in the context of business.

Question 7.
What do you mean by the concept of business ethics?
Answer:

‘Business houses need to go beyond the interests of their companies to the communities they serve.’
Ratan Tata, Former Chairman of the Tata group.
‘A business that is in the making of only money is a poor kind of business’.
Hendry Ford, Founder of Ford Motor Corporation.

Question 8.
Why is ethics necessary in business?
Answer:
Business exists to supply goods and services to the people from social point of view but from individual point of view, the primary objective of any business unit is to make profit. The individual objective should not be in conflict with societal objective. These two objectives normally contradict each other, as one business enterprise may be good in individual objective and bad at societal objective and vice versa.

All business units have realised that ethics is vitally important for the existence and progress of the business as well as the society. It is very important as it improves public image, earns public confidence, and leads to greater success. Ethics and profits go together in the long run. It enhances the quality of life, standard of living and business.

Question 9.
What are the benefit of Corporate Governance to Share holders?
Answer:

Good corporate governance enables corporate success and economic development.
Ensures stable growth of organizations.
Aligns the interests of various stakeholders.
Improves investors’ confidence and enables raising of capital.
Reduces the cost of capital for companies.
Has a positive impact on the share price.
Provides incentive to managers to achieve organizational objectives.

Question 10.
Illustrate with example the working of a MNC.
Answer:
Any company is referred to as a Multinational company or corporation (MNC) when that company manages its operation or production or service delivery from more than a single country. It has its headquarter based in one country with several other operating branches in different othet countries.
eg: IBM, Coca Cola, Pepsi.

Question 11.
Explain the different key elements of business ethics.
Answer:
(i) Top Management Commitment:
Top management has a very important role to guide the entire organization towards ethical behaviour. The top level personnel in any organisation should work openly and strongly committed towards ethical conducts arid guide people working at middle and low level to follow ethical behaviour.

(ii) Publication of a “Code”:
Generally organisations formulate their own ethical codes for the conduct of the enterprise; it should followed by the employees of the organisation. The organisation principles are defined in the written document called code.

(iii) Establishment of Compliance Mechanise:
To make sure that actual decisions match with a firm’s ethical standards, suitable mechanism should be established. Any organisation following ethical codes in training, recruitment, selection etc., is sure to be profitable.

(iv) Involving Employees at All Levels:
It is the employees at different levels who implement ethics policies to make ethical business a reality. Therefore, their involvement in ethics programmes becomes a must.

(v) Measuring Results:
The organisations from time to time keep a check on ethical practise followed. Although it is difficult to accurately measure the end results of ethics programmes, the firms can certainly audit to monitor compliance with ethical standards.

Question 12.
Describe the code of business ethics.
Answer:
The code of business ethics can include the following:
(i) To offer goods at fair prices.
(ii) To supply quality goods and not to deal in spurious and sub standard products.
(iii) To listen to consumer’s complaints and to reduce them.
(iv) Not to raise the price of its products unjustifiably.
(v) Not to resort to hoarding and black marketing.
(vi) Not to resort to price cutting with the sole aim of killing competition.
(vii) Not to issue advertisement containing false information or exaggerated claims.
(viii) To pay fair wages to its employees and not to exploit them.
(ix) To provide congenial work atmosphere.
(x) To design production process in such a way as to reduce environmental pollution.
(xi) To keep proper books of accounts and records.
(xii) To pay taxes regularly.
(xiii) Not to overlook Government rules and regulations even at the time of incurring losses.

Question 13.
Explain the significance of Corporate Governance from the point of Stakeholders.
Answer:
Corporate governance specific the rights and liabilities of different group of people like the chief executives, directors of the board, managers of different departments and other stakeholders. This helps to provide the structure through which the objectives of the company formulated and their performance is monitored.
(i) Good corporate governance enables corporate success and economic development.
(ii) Ensures stable growth of organizations.
(iii) Aligns the interests of various stakeholders.
(iv) Improves investors confidence and enables raising of capital.
(v) Reduces the cost of capital for companies.
(vi) Has a positive impact On the share price
(vii) Provides incentive to managers to achieve organizational objectives.
(viii) Eliminates wastages, corruption, risks and mismanagement.
(ix) Improves the image of the company.
(x) The organization is managed to benefit the stakeholders.
(xi) Ensures efficient allocation of resources
(xii) Creates a strong brand as an ethical business.

Question 14.
Discuss the role of International Benchmarking on the working of Companies in India.
Answer:
(i) Asia:
Independent Directors are a requirement for listed companies in all Asian economies, where most require at least 1/3rd of the Board to be independent.

(ii) The USA:
The Council of Institutional Investors (CII), Corporate Governance Policies state that at least 2/3rd of the directors should be independent.

(iii) Europe:
European commission urges member states to have sufficient number of independent non-executive or supervisory directors on Board.

(iv) Japan:
In early 2014, Japanese Prime Minister announced the goal of increasing the percentage of women in executive positions at Japanese companies to 30% by 2020.

(v) The UK:
UK businesses had voluntary targets first set in 2011 i.e. to have 25% women on FTSE100 (The Financial Times Stock Exchange) Boards by 2015.

(vi) Canada:
At the Federal level, two bills are currently being tabled which will impose a 40% quota for female Board members of public companies and other regulated entities such as banks and insurance companies.

(vii) Brazil:
A bill pending in the Brazilian Senate would impose a 40% female, quota on the Boards of state owned enterprises by 2022.

(viii) France:
French parliament adopted a bill that requires public companies making at least 50 million Euros in turnover and employing more than 500 workers to have 40% female Board representation by 2017.

Question 15.
Describe the benefits of increasing the number of MNCs.
Answer:

Considers opportunities throughout the globe though they do the business in a few countries.
To invest considerable portion of their assets internationally.
They are huge industrial/business organisation.
It engages in international production and operates plants in a number of countries.
They take managerial decisions on a global perspective.
They produce in one or a few countries and sell them in most of the countries.
Their international operations are integrated into the corporations overall business.

Question 16.
Illustrate the ethical practices followed by different reputed organisation giving practical examples.
Answer:
Physicians:
The American medical association also imposes a code of ethics on physicians. This code of ethics addresses everything from impersonal relationship with other staff members such as nurses information on patient care.

Question 17.
Create case studies concerning the existing famous organisation following ethical practices quoting their real life practice.
Answer:

Use real life examples: If you are free to choose a topic on your own try to take it from real life. However avoid real names.
Finish every part of your study with points for discussing. They will engage your reader and help him orient in the study.

Question 18.
Identifying ethical codes based on which organisation exits, for long run and short run, justifying the adherence of code of ethics.
Answer:
Two of the 22 identified excerpts involved individuals referring to ethical guidelines that are clear and penalties potentially serious. Responses falling under this theme tend to refer to guidelines when they believe a clear concrete rule is available and when consequences may be substantial and costly.

Question 19.
Money earning cannot be sole objective of business or life.
Answer:

Yes, because reputation is very important, but primary objective is to earn profit.
Even though business run on commercial lines. Service is the main objective of business while running the business money is important at the same service to the society and public is very important.

Question 20.
The mind of students to accept that ethics and consideration for environment, law etc can lengthen the income earning of an individual or business.
Answer:
As you might imagine environmental legislation is a broad topic. Mainly because the natural environment encompasses. So many different aspects. So environmental laws need to consider everything from the air we breathe to the natural resources we rely on to the plants and animals that share this world with us.

Choose the Correct Answer:

Question 1.
Which of the following helps in maximising sale of goods to society?
(a) Business success
(b) Laws and regulations
(c) Ethics
(d) Professional management
Answer:
(c) Ethics

Question 2.
Ethics is important for:
(a) top management
(b) middle level managers
(c) non managerial employees
(d) all of them
Answer:
(d) all of them

Question 3.
Which of the following does not ensure effective ethical practices in a business enterprise?
(a) Publication of a code
(b) Involvement of employees
(c) Establishment of compliance mechanisms
(d) None of them
Answer:
(a) Publication of a code

Question 4.
The role of top management is to guide the entire organisation towards:
(a) general behaviour
(b) organisation behaviour
(c) ethically upright behaviour
(d) individual behaviour
Answer:
(c) ethically upright behaviour

Question 5.
The ethical conduct of employees leading to standard practices results in:
(a) good behaviour
(b) bad behaviour
(c) ethical behaviour
(d) correct decision making
Answer:
(d) correct decision making

Samacheer Kalvi 11th Commerce Notes Chapter 18 Business Ethics and Corporate Governance

→ The important concept of business ethics is discussed briefly. Business ethics is vital for ‘ running of all organisations both in the short long run the code of conduct of business units are clearly defined and executed in terms of transparency through corporate governance.

→ The role of MNCs in the development of the economy is explained along with the features. The need for international benchmarking is also highlighted. Business houses need to go beyond the interests of their companies to the communities they serve.

→ Corporate governance is the system by which business are directed and controlled in the best interests of all shareholders.

TN Board 11th Commerce Important Questions

Category: Important Questions

TN State Board 11th Commerce Important Questions Chapter 32 Direct Taxes

TN State Board 11th Commerce Important Questions Chapter 10 Reserve Bank of India

TN State Board 11th Commerce Important Questions Chapter 9 Government Organisation

TN State Board 11th Commerce Important Questions Chapter 20 International Finance

TN State Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

TN State Board 11th Commerce Important Questions Chapter 13 Warehousing

TN State Board 11th Commerce Important Questions Chapter 12 Functions of Commercial Banks

TN State Board 11th Commerce Important Questions Chapter 11 Types of Banks

TN State Board 11th Commerce Important Questions Chapter 19 Sources of Business Finance

TN State Board 11th Commerce Important Questions Chapter 18 Business Ethics and Corporate Governance