BSEB Bihar Board 12th Business Studies Important Questions Short Answer Type Part 2 are the best resource for students which helps in revision.

Bihar Board 12th Business Studies Important Questions Short Answer Type Part 2

Question 1.
Define Formal communication.
Formal communication refers to official communication which takes place following the chain of command.

Question 2.
Define Informal communication.
Informal communication refers to communication between individuals and groups which are not officially recognised.

Question 3.
Why it is said than controlling is a continuous activity?
Controlling is a continuous activity because actual performance has to be Compared with predetermined performance on a continuous basis so that any short coming can be overcome, the manager does not have to wait for the. year for end results but has to take action us and when any direction arises from the target performance.

Question 4.
Give meaning of the term ‘Deviation’ as used in the control function of management.
Deviation refers to a situation when actual results/performance differs from the desired results during comparison.

Question 5.
Define controlling.
Controlling is the process through which managers assure that the actual activities conform to the planned activities.

Question 6.
Define financial management.
Financial management is the activity concerned with the planning, raising, controlling and administrating of funds used in the business.

Question 7.
State the objective of financial management.
To maximise shareholder’s wealth (also referred as the wealth maximisation concept).

Question 8.
Define capital budgeting techniques.
These are the techniques used to evaluate investment proposals before selecting a particular project.

Question 9.
Define working capital.
Working capital refers to short-term assets of a firm such as inventories and short-term liabilities like creditors.

Question 10.
What docs trading on equity refer to?
It refers to an increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest.

Question 11.
Enumerate the two types/segments of financial markets.
Financial market consist of two major segments:

  1. Capita market: The market for medium and long-term funds.
  2. Money market: The market for short-term funds.

Question 12.
What is meant by capital market?
Capital market can be described as the aggregate of financial institutions and those serving as intermediaries for long-term financial assets. It is the mechanism which makes the long-term finance available.

Question 13.
Why is entrepreneurship is regarded as a creative activity?
Entrepreneurship is creative because it involves creation of value. In the absence of entrepreneurship “matter” does not become a “resource”. By combining the various factors of production, entrepreneur produce goods and services that satisfy the requirements of the customers. Entrepreneurship also encourages, innovation e.g. zerox machines has minimised the use of carbon paper. Entrepreneurship makes possible introduction of new products, discovery of new markets and supply of inputs, technological break through as well as introduction of newer organisational forms for doing things better.

Question 14.
“Entrepreneur undertaken moderate risks.” Elaborate this statement.
As the enterepreneur contracts for an assured supply of the various inputs for his projects, he incurs the risk of paying them off whether or not the venture succeeds i.e. there is no assurance of profits for entrepreneur. It is believed that entrepreneurs take high risk but the entrepreneur takes “calculated risk” e.g., Motorcyclist in the ring of death, While the spectators think that the artist has taken high risk, but the artist takes “calculated risk” based on their training, skill and confidence, etc.

Question 15.
Write the factors that promote entrepreneurship.
The following factors helps in promotion of entrepreneurship and consequently, economic development:

  1. Easy availability of capital to the entrepreneur to start a new business.
  2. Pressence of environment for transformation of scientific and technical development into business projects.
  3. Supportive programmes provided by the government.
  4. Availability of training facilities to start a new business.
  5. Desire to create a favorable/climate for innovative and entrepreneurial activities.

Question 16.
Explain any three points of importance of financial planning.
Following are the importance of financial planning:

  • In integral part of corporate planning: Financial planning is an integral part of the corporate planning of the business.
  • Overcoming the problems of excess or shortage of fund: Financial planning involves accurate forecasts of the present and future requirements of funds. Therefore, it helps companies in over coming the problems of cess and shortage of funds.
  • It helps in financial control.
  • Minimising cost of financing: Cost of finance is kept to minimum possible and scarce funds are used Judiciously.

Question 17.
Give names of six stock exchange in India.
Six regional stock exchanges in India are:

  1. Bangalore Stock Exchange
  2. Pune Stock Exchange
  3. Ahmedabad Stock Exchange
  4. Madhya Pradesh Stock Exchange
  5. Delhi Stock Exchange
  6. Ludhiyana Stock Exchange

Question 18.
Define Beneficial owner.
Beneficial owner is the investor or account holder and is required to open Demat Account for the trading of securities at the Stock exchanges.

Question 19.
Who can be an investor?
Investor can be an individual as well as an non-individual. Individual investors could be Indian residents or NRIs. Non-individual investors include corporates, mutual funds, trusts etc.

Question 20.
What are the consumer responsibilities?
A consumer should keep in mind the following responsibilities while purchasing, using and consuming goods and services:

  • Be aware about various goods and services available in the market so that an intelligent and wise choice can be made.
  • Buy only standardised goods as they provide quality assurance. Thus, look for ISI mark on electrical goods, FPO mark on food products, hallmark on jewellary, etc.
  • Learn about the risks associated with products and services, follow manufacture’s instructions and use the product safely.
  • Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc.
  • Assert yourself to ensure that you should get a fair deal.
  • Be honest in your dealings. Purchase only from authorized distributors of goods and services and discourage unscrupulous practices like black marketing, hoarding etc.
  • Ask for a cash memo on purchase of goods or services.
  • File a complaint in an appropriate consumer forum in case of a shortcoming in the quality of goods purchased or services availed.
  • From consumer societies which would play an active part in educating consumers and safeguarding their interests.

Question 21.
What kind of cases can be filed in State Commission?
State commission: A complaint can be made to the appropriate State Commission when the value of the goods or services in question along with the compensation claimed, exceed Rs. 20 lakh but does not exceed Rs. 1 crore. The appeals against the orders of District Forum can also be filed before the State commission. On receiving the complaint, the State commission shall refer the complaint to the party againt whom the complaint is filed. If required, the goods of a sample there of, shall be sent for testing in a laboratory.

The State Commission shall pass an order after considering the test report from the laboratory and hearing to the party against whom the complaint is filed. In case the aggrieved party is not satisfied with the order of the State Commission be can appeal before the National commission within 30 days of the passing of the order.

Question 22.
What are the objective of SEBI?
The main objectives of SEBI are as under:

  • To promote fair dealings by the issuers of securities.
  • To ensure market place where by the issuers of securities can raise funds at a relatively low cost.
  • To protect and safeguard the interests and rights of investors so as to ensure steady flow of funds into the market.
  • To regulate and develop a code of conduct and fair practices to be adopted by intermediaries (brokers, marchant bankers etc.) so as to make them competitive and professional.

Question 23.
What are the items that can be marketed?
Anything that is of value can be marketed. List of items which can be marketed include physical products, services, ideas, persons, place, experience, properties, events, information, organisations.

Question 24.
What is meant by market offering?
Market offering refers to a complete offer for a product or service, having given features like size, taste, quality, etc. at a given price available at a given outlet or location.

Question 25.
Define marketing management.
Marketing management deals with planning, organising, directing and controlling the activities related to the marketing of goods and services to satisfy the customer’s needs.

Question 26.
What do you mean by trademark?
Trademark simply means mark of a trade carried on by an identified entity. It is usually a sign, mark or symbol, word or words.

Question 27.
What do you mean by labelling?
A label identifies the product or brand labels are attached onto the product package to help identification and provide some information to the customers. A label is a carrier of information, which is to be provided to the customers.

Question 28.
Advertising is a very economical mode of communication. How?
Per unit cost of reach comes low due to its wide reach. The overall cost of advertising gets spread over numerous communication links established.

Question 29.
One limitation of advertising is that it is less flexible. Why?
Because the message is standardised and is not tailor made to the requirements of the difference customer groups.

Question 30.
How does advertisement confuses the buyers?
Buyers gets confused as to which one is true and which one should be relied upon as so many products are being advertised.

Question 31.
Define sales promotion.
Sales promotion refers to short term incentives, other than advertising and personal selling, aimed at stimulating market demand for products:

Question 32.
What do you mean by publicity?
Publicity is any promotional communication regarding an organisation and/or its products where the message is not paid for by the organisation benefiting from it; It is a non-paid form of non-personal communication which spreads in the form of news.

Question 33.
Mention two features of publicity.

  1. On paid form of communication
  2. There is no identified sponsor.

Question 34.
Mention the purpose of public relations.
The purpose is to keep different public groups satisfied so that no obstructions are imposed on the functioning of the business.

Question 35.
What does Consumer Protection Act, 1986 aim at?
To protect and promote the consumers interest through speedy and inexpensive redressal of their grievances.

Question 36.
I low docs Consumer rights benefit the consumers?
It empowers consumers to fight against any unscrupulous, exploitative and unfair trade practices adopted by sellers.

Question 37.
Why consumer protection is important for consumers? Give any one reason.
Because it helps to achieve consumer awareness through educating them about their rights and reliefs available to them.

Question 38.
Which kind of appeals can be taken to the supreme court?
Only those appeals where the aggrieved party was not satisfied with the order of the National Commission and where the value of goods and services in question, along with the compensation claimed, exceeded Rs. 1 crore.

Question 39.
List any three consumer organisations in India.
Consumer Guidance Society of India, Mumbai, Citizens Action Group, Mumbai, Consumer Protection Council (CPC), Ahmedabad.

Question 40.
Differentiate between ‘Management’ and ‘Administration’.
Difference between ‘Management’ and ‘Administration’:

Basis of Difference Administration Management
1. Natural of work It is primarily related to the determination of objectives and laying down of policies and it is a thinking function. This is a executive function to give practical shape to the policies to achieve pre-determined objectives.
2. Scope Important decisions are taken and it is wider than management. Decisions are taken within the limits laid down by the administration.
3. Consideration Owners who called administrators are given profits. Managers are given salary for their services and sometimes they get a part of the profit.
4. Level of function Administrative functions are performed by top level managers. Managerial functions are performed by middle level and lower level managers.