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class 11 commerce bussiness studies study material

class 11 commerce bussiness studies study material:- Class 11 is the class where students get to choose what they want to study. They can choose from the three major streams viz. Science, Commerce and Arts, focusing on a wide range of subjects. class 11 commerce bussiness studies study material are available here for free. The solutions and answers provided are easy to understand. We understand the pressure you guys have about your studies. Therefore, we here at cakart.in are doing our best to help you out in you education in every possible way we can.

class 11 commerce bussiness studies study material

class 11 commerce bussiness studies study material

class 11 commerce bussiness studies study material:-Chapter 1 – Nature and Purpose of Business

  • Q1 :  State the different types of economic activities.

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    • Answer :The following are the different types of economic activities.

      • Business: It basically involves trading of goods and services on a regular basis. The sole motive with which a business is conducted is profit.
      • Profession: A profession is an occupation that requires highly specific and in-depth knowledge of the relevant field. Every profession is different from another in terms of the knowledge and skills required to practise it. For instance, a doctor cannot engage in the profession of an engineer.
      • Employment: In this type of economic activity people are hired by organisations to work on a regular basis and are paid in exchange of their services. Normally, a monthly salary is paid. The payments are generally in monetary terms along with certain non-monetary compensations such as perks and other types of allowances. The remuneration paid to blue-collar employees (basically, workers) is termed ‘wages’, while the remuneration paid to white-collar employees (particularly, officers) is termed ‘salary’. All the employees of an organisation work together for the achievement of the common goals.
  • Q2 :  Explain the characteristics of business.

    • Answer :Business refers to an economic activity that basically involves trading of goods and services on a regular basis. The sole motive with which a business is conducted is profit. The following are the main characteristics of business.
    • As mentioned in the definition, business is considered to be an economic activity as it is run with the sole objective of earning a profit.
    • Business involves procurement of raw materials and semi-finished goods and services, which are then processed further and thereafter sold to the final consumers at higher prices. It is because of this value addition that the prices of finished goods and services are higher.
    • All types of business activities are conducted to pursue just one single motive, profit. It is the capacity to earn profits that decides the sustainability and future growth prospects of a business.
    • Business basically involves an exchange of goods and services. The common medium of exchange is money.
    • The exchange of goods and services (as mentioned in the point above) is done on a regular basis. Business is a continuous process in which semi-finished goods are procured, some value is added to them and the final goods are traded in the market. It should be noted that one single deal or transaction cannot be called a business.
    • Every business, irrespective of its size (whether it is a large or a small business) and the types of goods produced, faces business risk. Although the degree of risk may differ from business to business, there is no way in which a business can escape risk. It is because of risks that no business can accurately anticipate the returns on investments.
    • Besides the profit motive, a business aims at satisfying consumers’ wants. A business must produce goods and services considering consumers’ needs. If goods and services are produced only to fulfill the businessperson’s own needs, then this activity cannot be considered a business as the goods and services are meant merely for self-consumption.

class 11 commerce bussiness studies study material:-Chapter 2 – Forms of Business Organisation

  • Q1 :  Compare the status of a minor in a Joint Hindu Family Business with that in a partnership firm.

    • Answer :As per the Indian law, any person below the age of 18 years is considered a ‘minor’. The status of a minor in a Joint Hindu Family differs from that in a partnership firm. In case of a Joint Hindu Family, membership in the family business is by birth. This means that as soon as a boy child is born in a Joint Hindu Family, he is automatically entitled to a share in his family business. In this case, the minor enjoys an equal ownership right over the inherited property as the other members of the family. However, his liability is limited only to the extent of his share in the joint property.As per the Partnership Act, 1923, no minor can be a partner in a partnership firm. But a partnership firm, with the consent of all the partners, can admit a minor to share the profits of the firm; but he cannot be asked to either contribute capital or bear the losses incurred by the business. A minor is not legally competent to enter into any legal contracts, and therefore, he or she cannot be considered a partner. However, a minor, after attaining the age of 18 years, has the option of either continuing with the partnership firm or withdrawing his interest from it.
  • Q2 :  If registration is optional, why do partnership firms willingly go through this legal formality and get themselves registered? Explain.

    • Answer :Although registration in case of a partnership firm is optional yet many firms voluntarily opt for it. This is because of the various legal disadvantages associated with non-registration. A few of these disadvantages are listed below.
    • The partners of a non-registered firm cannot file a suit against a third party; however, non-registration of a partnership firm does not prevent other firms from suing it .
    • The firm cannot file a case against any of its partners. Similarly, a partner of a non-registered firm cannot file a case against his or her co-partners or the firm.
    • A non-registered partnership firm cannot enforce its claims against a third party in a court.

class 11 commerce bussiness studies study material:-Chapter 3 – Private, Public and Global Enterprises

  • Q1 :  Explain the concept of private sector and public sector?

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    • Answer :Private sector: It refers to that part of an economy which is owned and managed by individuals or companies with the sole motive of earning profits. In other words, it encompasses all organisations that are not owned or operated directly by the government. In most of the free economies (where the government has a minimal role), the private sector employs a significant portion of the workforce. The private sector consists of the following types of organisations.
    • Sole proprietorship
    • Partnership
    • Joint Hindu Family
    • Cooperative societies
    • Company
    • Public sector: This sector consists of organisations that are directly owned and operated by the government. These organisations are either partly or completely owned by the central or a state government – Bharat Heavy Electricals Ltd, Oil India Ltd and Life Insurance Corporation of India are examples of public sector industries.
  • Q2 :  Describe the industrial policy 1991, towards the public sector?

    • Answer :The following are the major points that describe the industrial policy of 1991.(a) Fall in the number of industries reserved for the public sector

      Year 1956 1991
      Number of industries reserved for the public sector 17 8

      From the table above, it can be seen that the number of industries reserved for the public sector fell from 17 in 1956 to eight in 1991. This implies that in 1991, there were more industries in which the private sector could play a role, compared with 1956. In this way, the industrial policy of 1991 aimed at

      (i) infusing competition (as the public sector had to compete with the private sector)

      (ii) increasing the efficiency of public sector enterprises (PSEs), by facilitating stiff competition from the private sector

      (b) Disinvestment of shares of the selected public sector enterprises (PSEs): For disinvestment from PSEs, the government reduced its stakes in these enterprises and aimed at encouraging greater participation of the private sector and the general public in industrial sectors. The following were the main rationale behind disinvestment.

      (i) Divert resources to social priority areas: By disinvesting from PSEs (the less important ones), the government aimed at diverting funds from the less important PSEs to social priority areas, such as health and education, for improving the people’s welfare.

      (ii) Transfer risk : Often, the funds allocated to PSEs had not been optimally utilised. This misutilisation of funds, together with bureaucratic corruption, led PSEs to incur heavy losses, which exerted an acute financial burden on the government. Therefore, by disinvesting from PSEs, the government aimed at shifting this commercial risk to the private sector, which would invest their funds only in feasible projects.

      (iii) Reduce public debt: As the government did not have to allocate funds to PSEs where disinvestment had taken place, the need for incurring fresh public debts was reduced.

      (iv) Introduction of corporate governance: Disinvestment helped the government to reduce its role in PSEs and encouraged the introduction of corporate governance. This made these enterprises work in a more disciplined and professional manner.

      (c) Policies for sick PSEs: The Board of Industrial and Financial Reconstruction was assigned the task to evaluate the sick PSEs and decide whether they could be revived or should be shut down. The decision to shut down sick PSEs freed the government from intense financial pressure, as it no longer needed to financially support these units.

      (d) Memorandum of Understanding (MoU): Under an MoU with sick PSEs, their managements were given greater freedom to operate and achieve specified targets. This led to the PSEs operating freely and efficiently.

class 11 commerce bussiness studies study material:-Chapter 4 – Business Services

  • Q1 :  Define services and goods?

    • Answer :Services are intangible activities that require personal interaction between the consumer (purchaser of the service) and the service provider (seller of the service) at the time of delivery. The services need not involve any production or sale of goods. Generally, services are classified into the following two categories.(a) Business services: These include banking, insurance and warehousing services.(b) Professional services: These include legal services, medical advice and tax consultancy.In contrast to services, the term ‘goods’ refers to physical and tangible objects whose ownership gets transferred to the buyers as soon as he or she purchases these objects. Examples of goods are televisions, radios and shoes.
  • Q2 :  What are services? Explain their distinct characteristics?

    • Answer :Services are intangible economic activities that require personal interaction between the consumer and the service provider at the time of delivery of the services. Services need not involve any kind of production or sale of goods and are mainly provided in order to satisfy individuals’ wants. Services are generally classified into business services (including banking, insurance and warehousing) and professional services (including legal services, medical advice and tax consultancy).Features of services are as follows:(i) Intangible: Services are intangible as they cannot be seen or touched. One can only experience them. This implies that the quality of services cannot be checked before their use. Thus, it becomes imperative for service providers to offer services to the satisfaction of the individuals concerned.(ii) Inseparable: Services have to be produced and used simultaneously. Unlike goods, which are produced today for sale later, services have to be used at the same time as they are made available.

      (iii) Inconsistent: No standards can be set for services; they have to be provided each time according to the demand and expectations of the service users. As each service user has different tastes and preferences, the type and quality of services provided differ according to the user.

      (iv) Involvement: The involvement of the service user and the service provider is a prerequisite at the time of delivery of the services. For instance, in a school, the teacher and the students are actively involved in the exchange of the service of imparting knowledge.

      (v) Inventory: Services cannot be stored for sale at a future date. They need to be provided as and when the service users ask for them. This is because if services are not consumed immediately then they lose its value.

class 11 commerce bussiness studies study material

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class 11 commerce bussiness studies study material

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