Centre Point School, Katol Road Periodic Assessment 2 Subject-Business Studies MARKS-15 DATE-17 January Time-45 Min

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CENTRE POINT SCHOOL, KATOL ROAD

PERIODIC ASSESSMENT 2
SUBJECT- BUSINESS STUDIES MARKS-15
DATE-17TH JANUARY TIME-45 MIN
General Instructions:
1. Answer to questions carrying 3 Marks may be from 50 to 75 words

1. Which of the following is not true with regard to trade credit? 1

a) It appears in the records of the buyer firm as “ Account payable’


b) It depends upon the financial strength of the seller.
c) Large amount of funds can be generated through Trade credit.
d) It depends upon the reputation of the buyer.

2. The fixed capital requirement of business is low if- 1

a) It plans to upgrade the technology


b) It plans to shift the business to a new location
c) The business is operated on a large scale
d) It wants to meet its current expenses.

3. How does the wholesaler provide financial assistance to the


manufacturers? 1

4. Manas owns a large scale retail outlet at a central location in Kanpur.


The outlet is divided into a number of sections and each section deals
in a particular variety of goods. There is a separate section for
toiletries, fruits and vegetables, groceries, electronics and clothing.
Explain three features of the identified retail outlet highlighted in the
given case. 3
5. Max Chemical ltd is a company engaged in the manufacturing of
chemicals. The company is planning to expand its business. For this, it
needs to raise funds Rs 500 crores. After analysing, Shivam, Finance
Manager of the company proposed to raise the funds through issue of
‘Debentures’. Shivam also gave number of reasons for his choice. After
listening to all the points put forward by Shivam, the Managing Director
of the company is fully satisfied and asked Shivam to go ahead with the
issue. Discuss the reasons which might have been given by Shivam,
which convinced the Managing Director to go for the issue of
Debentures.
3
6. Explain the three services of the Retailers to Consumers. 3

7. How are Preference shares different from Equity shares ? 3


OR
Retained earnings as a source of funds has a few limitations. Explain any
three such limitations.

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