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TN State Board 12th Commerce Model Question Paper 2 English Medium


  1. The question paper comprises of four parts.
  2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
  3. All questions of Part I, II. III and IV are to be attempted separately.
  4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each. These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer.
  5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about 50 words.
  6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in about 150 words.
  7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in about 250 words. Draw diagrams wherever necessary.

Time: 3 Hours
Max Marks: 90

Part -I

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

Question 1.
How many times security can be sold in a secondary market?
(a) Only one time
(b) Two times
(c) Three times
(d) Multiple times
(d) Multiple times

Question 2.
Debt Instruments are issued by Corporate Houses are raising short-term financial resources
from the money market are called ………………
(a) Treasury Bills
(b) Commercial Paper
(c) Certificate of Deposit
(d) Government Securities
(b) Commercial Paper

Question 3.
The market for buying and selling of Commercial Bills of Exchange is known as a ……………
(a) Commercial Paper Market
(b) Treasury Bill Market
(c) Commercial Bill Market
(d) Capital Market
(c) Commercial Bill Market

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 4.
A bull operator believes in …………….
(a) Increase in Prices
(b) Decrease in Prices
(c) Stability in Prices
(d) No change in Prices
(a) Increase in Prices

Question 5
means the price at which securities are bought and sold are recorded and made public…………….
(a) Market Quotations
(b) Trade Quotations
(c) Business Quotations
(d) Buyers Quotations
(a) Market Quotations

Question 6.
Trading is dematerialized shares commenced on the NSE is ……………….
(a) January 1996
(b) June 1998
(c) December 1996
(d) December 1998.
(c) December 1996

Question 7.
Transfer is an source of recruitment……………
(a) Internal
(b) External
(c) Outsourcing
(d) None of the above
(a) Internal

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 8.
Which of the following orders is followed in a typical selection process.
(а) Application form test and or interview, reference check and physical examination
(b) Application form test and or interview, reference check, and physical examination
(c) Reference check, application form, test and interview and physical examination
(d) Physical examination test and interview application term and reference check
(b) Application form test and or interview, reference check, and physical examination

Question 9
…………….. is useful to prevent skill obsolescence of employees.
(a) Training
(b) Job Analysis
(c) Selection
(d) Recruitment
(a) Training

Question 10.
Which one is the example of Intangible product?
(a) Education
(b) Mobiles
(c) Garments
(d) Vehicles
(a) Education

Question 11.
A company’s products and prices is visually represented by ……………
(a) Shopping Cart
(b) Web portal
(c) Electronic catalogue
(d) Revenue model
(c) Electronic catalogue

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 12.
………….. of every year is declared as a consumer protection Day to educate the public about their rights and responsibilities.
(a) August 15
(b) April 15
(c) March 15
(d) September 15
(c) March 15

Question 13.
It is the responsibility of a consumer that he must obtain ……………. as a proof for the purchase of goods.
(a) Cash receipt
(b) Warranty card
(c) Invoice
(d) All of these
(c) Invoice

Question 14.
The District Forum can entertain complaints where the value of goods or services and the compensation if any claimed is less than …………….
(a) Below ₹ 10,00,000
(b) Below ₹ 20,00,000
(c) Below ₹ 40,00,000
(d) Below ₹ 50,00,000
(b) Below ₹ 20,00,000

Question 15.
……………. is a stipulation which is collateral to main purpose of contract.
(a) Warranty
(b) Condition
(c) Right
(d) Agreement
(a) Warranty

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 16.
When crossing restrict further negotiation ……………
(a) Not negotiable crossing
(b) General Crossing
(c) A/c payee crossing
(d) Special crossing
(a) Not negotiable crossing

Question 17.
Which of the below is a commercial function?
(a) Accounting
(b) Coordination
(c) Discovery of idea
(d) Planning
(a) Accounting

Question 18.
Poultry, Flowers, Fruits etc are called allied products of entrepreneur.
(a) Corporate
(b) Retail
(c) Trading
(d) Agricultural
(d) Agricultural

Question 19.
…………… has to include the mechanism for managing venture in the project report.
(a) Banker
(b) Government
(c) Lending Institutions
(d) Entrepreneur
(d) Entrepreneur

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 20.
Specify the type of resolution to be passed to choose the location of Registered Office of the company within the town or village or city.
(a) Ordinary
(b) Special
(c) Either Ordinary or Special
(d) Board
(d) Board

Part – II

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

Question 21.
How do you co-ordinate your class room with peace?
All the activities are divided groupwise or sectionwise under organising function. Now, such grouped activities are co-ordinated towards the accomplishment of objectives of a classroom. With the function of co-ordination the classroom must be peaceful and calm.

Question 22.
What are the instruments of Money Market?

  • Treasury Bills in the Treasury Market
  • Money at Call and Short Notice in the Call Loan Market
  • Commercial Bills and Promissory Notes in the Bill Market

Now in addition to the above, the following new instruments come into existence:

  • Commercial Papers
  • Certificate of Deposits
  • Inter-Bank participation Certificates
  • Repo Instruments

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 23.
What are the types of Speculators?
Speculators in a stock market are of different types. They are named on the basis of animals behaviour. They are

  • Bull
  • Bear
  • Stag
  • Lame duck

Question 24.
Mention the headquarters of SEBI.
SEBI has its headquarters at the business district of BandraKurla Complex in Mumbai, and has Northern, Eastern, Southern and Western Regional Offices in New Delhi,. Kolkata, Chennai and Ahmedabad, respectively.

Question 25.
What is Role Play?
Under this method trainees are explained the situation and assigned roles. They have to act out the roles assigned to them without any rehearsal.

Question 26.
What is meant by Regulated Market?
Very Short Period Market: Markets which deal in perishable goods like, fruits, milk, vegetables etc., are called as very short period market.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 27.
What is Social Marketing?
Social marketing is a new marketing tool. It is the systematic application of marketing philosophy and techniques to achieve specific behavioural goals which ensure social good. For example- not to smoke in public areas.

Question 28.
What is mixed Economy?
Mixed economy is a combination of both state owned and private sector ownership.

Question 29.
What is a Contingent Goods?
Contingent goods are the goods, the acquisition of which by the seller depends upon a . contingency (an event which may or may not happen). Contingent goods are a part of future goods.

Question 30.
Define Intrapreneur.
Intrapreneur is one who thinks and acts like an entrepreneur for the firm’s development during the course of employment in an organisation.

Part – III

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

Question 31.
State the importance of Motivation.
The goals are achieved with the help of motivation. Motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers. This is done by a resourceful leader. The workers expect, favourable climate conditions to work, fair treatment, monetary or non-monetary incentive, effective communication and gentleman approach.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 32.
Write a note on National Clearance and Depository System (NCDS).
Under the scripless trading system, settlement of transactions relating to securities takes place through a book entry. The entire scripless trading system comprises the following three segments:

  • National Trade Comparison and Reporting System which prescribes the terms and conditions of contract for the securities market.
  • National Clearing System which aims at determining the net cash and stock liability of each broker on a settlement date.
  • National Depository System which arranges to provide for the transfer of ownership of securities in exchange on payment by book entry on electronic ledgers without any physical movement of transfer deed.

Question 33.
What is the power of SEBI under securities Contract Act?

  • For effective regulation of stock exchange, the Ministry of Finance issued a Notification on 13 September, 1994 delegating several of its powers under the Securities Contracts (Regulations) Act to SEBI.
  • SEBI is also empowered by the Finance Ministry to nominate three members on the Governing Body of every stock exchange.

Question 34.
What are the features of internal source of recruitment?
The main features of internal source of recruitment are:

  • Quick process.
  • Cheaper than the external recruitment process.
  • Works as a tool of motivation for the staff.
  • The company’s choice is limited to existing employees of the company.

Question 35.
Why Customer support is needed to Market?
Customer or the consumer is the king and is considered to be a guest to your shop. Without the customer there is no business. To develop the market the number of customer is to be increased. So customer support is necessary to increase the sales and gain more profit.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 36.
What is the role of Government in Consumer Protection?
Since most of consumers including academically educated are illiterate about their rights and hence passive. Government should assure an active role in safeguarding the consumers. Government both the central and the state have brought out a number of legislations to protect the interest of consumers across the country. Law enforcement authorities should see that penal clause is not mere paper jaws-they should sting the offenders mercilessly.

Question 37.
What are the functions of the GST Council?
The functions of GST Council:

  • The GST council can recommend to the Central and State Government on issues relating to GST.
  • The Goods and Services that may be subjected to or exempted from the Goods and Services Tax.
  • Model GST laws, principles of levy are framed by the GST council.
  • The rates including floor rates with bands of Goods and Services Tax.

Question 38.
Discuss the two different types of Crossing.
(i) General Crossing
(ii) Special Crossing

  • General Crossing: “Where a cheque bears across its face an addition of the words “ an company” or any abbreviation there of, between to parallel transverse lines or of two parallel transverse line simply either with or without the words “Not negotiable” that addition shall be deemed a crossing and the cheque shall be deemed to be crossed generally”.
  • Special Crossing: “ Where a cheque bears across its face an addition of the name of a banker with or without the words “Not Negotiable”, that addition shall be deemed a crossing and the cheque shall be deemed to be crossed specially and to be crossed to that banker”.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 39.
How does a professional entrepreneur operate?
Professional entrepreneur is one who is having a rich expertise in starting a venture but lack interest in continuing the venture as a manager or as a owner. He/she simply sells out the venture started by him to someone else after its successful take-off.

Question 40.
What resolution is requires special notice?
There are certain matters specified in the Companies Act, 2013 which may be discussed at a general meeting only if a special notice is given at least 14 days before the meeting. The intention to propose any resolution must be notified to the company. The following matters require special notice before they are discussed in the meeting:-

  • To appoint an auditor, a person other than a retiring auditor
  • To provide expressly that a retiring Auditor shall not be reappointed
  • To remove a director before the expiry of his period of office
  • To appoint a director in the place of a director so removed

Part – IV

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

Question 41.
(a) Discuss the various types of Financial markets?
Financial assets can be classified differently under different circumstances. One such classification is:
(i) Marketable assets
(ii) Non-marketable assets
(i) Marketable Assets: Marketable assets are those which can be easily transferred from one person to another without much hindrance. Example: Shares of Listed Companies, Government Securities, Bonds of Public Sector Undertakings etc.

(ii) Non-Marketable Assets: On the other hand, if the assets cannot be transferred easily, they come under this category. Example: Bank Deposits, Provident Funds, Pension Funds, National Savings Certificates, Insurance Policies etc.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium


(b) Discuss the importance of Recruitment.
Recruitment is the process of having the right person, in the right place, at the right time. It is crucial to organisational performance. Recruitment is the first step in an organisation’s Human Resource Planning. It fulfills the organisation’s need of a set of competitive, motivated and flexible employees who work towards achieving the organisation’s objectives.

Competent Human Resources at the right positions are crucial for the organisation and constitute core competency. Recruitment helps in creating a pool of prospective employees for the organisation, so that the right candidates for the right jobs can be selected from this pool. It establishes a link between the job seekers and employers.

Proper recruitment enables the organisation to appoint talented persons for various activities, thereby leading to improved productivity and profitability of the organisation. Unless a company adopts a suitable recruitment policy, it may not be possible for a company to have right candidates for right job.

Question 42.
(a) State the advantages of warehousing.

  • Goods produced may be stored till the time of demand. Hence the goods are stored in warehouses.
  • Also the goods are stored till the goods have good quality.
  • Warehouses create time utility by storing the goods throughout the year and release them as and when they are needed.

Several types of warehouses are used for storing of goods. They are as follows:

  • Public warehouse
  • Private warehouse
  • Bonded warehouse.


(b) What are the objectives of United Nations guidelines for consumer protection?
The General Assembly of the United Nations passed a Resolution on April 9, 1985 adopting a set of guidelines for consumer protection to persuade the member countries.
Objectives of United Nations Guidelines for Consumer Protection:

  • To assist countries in achieving or maintaining protection to consumers.
  • To facilitate production and distribution patterns responsive to the needs and desires of consumers.
  • To encourage high levels of ethical conduct for production and distribution of goods and services to consumers.
  • To facilitate the developing of independent consumer groups.
  • To encourage the development of market conditions which provide consumers with greater choice at lower prices.

Question 43.
(a) How to create Consumer awareness?
The first priority of a consumer organisation is to increase consumer awareness towards their rights. The following are the points for awareness:

  • To publish brochures, journals and monographs.
  • To arrange conferences, seminars and workshops.
  • To educate consumers to help themselves.
  • To provide special education to women about consumerism.

(b) Explain in detail the various functions of an entrepreneur?
The functions of an entrepreneur is divided into
(a) Promotional functions
(b) Managerial functions and
(c) Commercial functions.

(a) Promotional functions
(i) Discovery of Idea: The first and foremost function of entrepreneur is idea generation. A person may conceive his own ideas or develop the ideas contributed by others. Ideas can be generated through several ways like own experience and exposure of entrepreneur, keen observation of environment, education, training, market survey, environmental scanning and so on.

(ii) Detailed Investigation: Entrepreneur should investigate commercial feasibility of the product proposed to be produced and conduct market study to ascertain the potential demand for the product.

(iii) Mobilisation of funds: Entrepreneur has to take steps to mobilise capital needed to implement the venture. Entrepreneur has to estimate the fixed capital and working capital required for running the project.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

(b) Managerial functions

Planning: In this function, the entrepreneur has to lay down the objectives, goals, vision, mission, policies, procedures, programmes, budget, schedules etc., for enabling the venture to proceed towards established destinations.

Directing: In this function, the entrepreneur has to motivate, lead, guide and communicate with subordinates on an ongoing basis in order to accomplish pre-set goals.

(c) Commercial functions

Production or Manufacturing: Under production function, entrepreneur has to take decision relating to selection of factory site, design and layout, type of products to be manufactured, research and development.

Accounting: Entrepreneur has to arrange to prepare trading and profit and loss account in order to know the profit or loss incurred out of operation of the business and prepare balance sheet to know the financial status of business.

Question 44.
(a) What is the maximum limit for the Managerial remuneration?
Managerial Remuneration: The Managerial remuneration is payable to a person’s appointed u/s 196 of the Act. The Term remuneration means any money or its equivalent given for their services.

Adequate profits: A Public Company can pay remuneration to its directors including Managing Director and Whole-time Directors, and its managers which shall not exceed 11% of the net profit. Maximum Remuneration Payable by a Company to its Managerial Personnel – No adequate Profits:

Remuneration Payable by a company in case where there is no profit or inadequacy of profit and remuneration payable is detailed below:

Where Effective Capital is Limit of yearly Remuneration payable shall not exceed (Rupees)
(i) less than ₹ 5 Crore ₹ 30 lakh
(ii) Above ₹ 5 Crore and less than ₹ 100 Crore ₹ 42 lakh
(iii) ₹ 5 Crore and above but less than ₹ 100 Crore ₹ 60 lakh
(iv) ₹ 250 Crore and above ₹ 60 lakh plus 9.91% of the effective capital in excess of ₹ 250 Crore


(b) Explain different types of open and secret types of voting.
The word ‘Vote’ originated from Latin word ‘Votum’ indicating one’s wishes or desire. He can vote formally by expressing his opinion or wish in favour or against a proposal.
Types of Voting: There are two methods of voting viz, open and secret procedures.
(i) Open Voting: This type of voting has no secrecy as all the members assembled can see voting. There are two types of open voting namely voice voting and voting by show of hands.

  • By Voice: Voice voting is a popular type of voting in which the chairman allows the members to raise their voice in favour or against an issue ‘Yes’ for approval and ‘No’ for rejection.
  • By Show of Hands: Under this method, the chairman requests the members to raise
    their hands for the proposal.

(ii) Secret Procedure: Secret procedure is adopted to decide certain vital issues. It may be of two types:

  • By Ballot: Under this system, ballot paper bearing serial number is given to the members to record their opinion by marking with the symbol.
  • Postal Ballot: Big companies or big associations having members scattered all over the country follow this method of voting. Under this method, the members or voters fill in the ballot papers sent by the company and return them in sealed covers.

Question 45.
(a) Distinguish between the rural and Urban entrepreneur?

S. No. Rural Entrepreneur Urban Entrepreneur
1. It refers to the person who starts business in rural areas. It refers to the person who commences business in urban areas.
2. These entrepreneurs start doing business in the villages and small towns. They will do their business in state capital, towns, district headquarters, municipalities, etc.
3. They may be agricultural and trading entrepreneurs. They may be industrial or corporate entrepreneur.
4. The availability of material and labour is easy. So the cost of operation tends to be low. The availability of material and labour may be difficult. So the cost of operation may be high.


(b) Explain the principles of modern management.
The Father of Modem Management is Mr.Henry Fayol, and according to him there are 14 major principles of management which every manager has to practice for the success of the organisation.

(i) Division of Work: According to this principle the whole work is divided into small tasks. This leads to specialization which increases the efficiency of labour.

(ii) Authority and Responsibility: This is the issue of commands followed by responsibility for their consequences.

(iii) Discipline: It is obedience, proper conduct in relation to others, respect of authority, etc.
It is essential for the smooth functioning of all organizations.

(iv) Unity of Command: This principle states that each subordinate should receive orders and be accountable to one and only one superior.

(v) Unity of Direction: All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager.

(vi) Subordination of Individual Interest to Mutual Interest: The management must put aside personal considerations and put company objectives firstly.

(vii) Remuneration: Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity.

(viii) The Degree of Centralization: The amount of power wielded with the central management depends on company size.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

(ix) Line of Authority/Scalar Chain: This refers to the chain of superiors ranging from top management to the lowest rank.

(x) Order: Social order ensures the fluid operation of a company through authoritative procedure.

(xi) Equity: Employees must be treated kindly, and justice must be enacted to ensure a just

(xii) Stability of Tenure of Personnel: Stability of tenure of personnel is a principle stating that in order for an organisation to run smoothly, personnel (especially managerial personnel) must not frequently enter and exit the organisation.

(xiii) Initiative: Using the initiative of employees can add strength and new ideas to an organisation.

(xiv) Esprit de Corps/Team Spirit: This refers to the need of managers to ensure and develop morale in the workplace; individually and communally.

Question 46.
(a) Explain the characteristics of Money Market?
(i) Short-term Funds: It is a market purely for short-term funds or financial assets called near money.
(ii) Maturity Period: It deals with financial assets having a maturity period upto one year only.
(iii) Conversion of Cash: It deals with only those assets which can be converted into cash readily without loss and with minimum transaction cost.
(iv) No Formal Place: Generally, transactions take place through phone, i.e., oral communication. Relevant documents and written communications can be exchanged subsequently.
(v) Sub-markets: It is not a single homogeneous market. It comprises of several sub-markets ‘ each specialising in a particular type of financing.
(vi) Role of Market: The components of a money market are the Central Bank, Commercial Banks. Commercial banks generally play a dominant role in this market.
(vii) Highly Organized Banking System: The Commercial Banks are the nerve centre of the whole money market. They are the principal suppliers of short-term funds.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

(viii) Existence of Secondary Market: There should be an active secondary market for these instruments. (be) Demand and Supply of Funds: There should be a large demand and supply of short-term funds.
(ix) Wholesale Market: It is a wholesale market and the volume of funds or financial assets traded in the market is very large.
(xi) Flexibility: Due to greater flexibility in the regulatory framework, there are constant endeavours for introducing new instruments.
(xii) Presence of a Central Bank: The central bank keeps their cash reserves and provides them financial accommodation in difficulties by discounting their eligible securities.


(b) What are the difference between on the job training and off the job training?

Basis for comparison On the Job Training Off the Job Training
1. Meaning The employee learns the job in the actual work environment. The training of employees is done outside the actual work place.
2. Cost It is cheapest to carry out. It is costly due to the expenses like separate training room, specialist, etc.
3. Suitable for Suitable for manufacturing related jobs. It is suitable for managerial jobs.
4. Approach Practical approach Theoretical approach
5. Carried out Provided by the experienced employee Provided by the experts
6. Methods Coaching, mentoring, apprenticeship, job rotation Seminar, lectures, vestibule, field trip, e-leaming

Question 47.
(a) How the market can be classified? On the basis of different approaches markets can be classified as follows:
On the basis of Geographical Area:

  • Family Market
  • Local Market
  • National Market
  • International Market or World Market

On the Basis of Commodities / Goods:
(a) Commodity Market:

  • Produce Exchange Market
  • Manufactured Goods Market
  • Bullion Market

(b) Capital Market:

  • Money Market
  • Foreign Exchange Market
  • The Stock Market

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

On the Basis of Economics:

  • Perfect Market
  • Imperfect Market

On the Basis of Transaction:

  • Spot Market
  • Future market

On the Basis of Regulation:

  • Regulated Market
  • Unregulated Market

On the Basis of Time:

  • Very Short Period Market
  • Short Period Market
  • Long Period Market

On the Basis of Volume of Business:

  • Wholesale Market
  • Retail Market

On the Basis of Importance:

  • Primary Market
  • Secondary Market
  • Terminal Market


(b) Explain the role of consumers in consumer protection.
Consumers have to be vigilant and organise themselves into a movement for concerned action.
Activation of Consumer Action Councils:

  • Consumer action councils established at village levels should educate consumers.
  • Consumer protection agencies should take necessary steps to investigate consumer complaints and grievances.
  • Voluntary consumer groups should provide information so as to educate consumers.
  • Consumer cooperatives need to be strengthened.
  • Consumer groups should contact the legislators to raise the consumer issue in Assembly and Parliament.
  • There should be testing laboratories at each district to test the purity of goods.