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class 11 commerce study material -complete details

class 11 commerce study material -complete details

class 11 commerce study material -complete details:- class 11 commerce 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 are doing our best to help you out in you education in every possible way we can.

class 11 commerce study material

class 11 commerce study material

class 11 commerce study material:-Accountancy

  • Q1 :  What are the objectives of preparing financial statements?

    • Answer :The following are the objectives of preparing financial statements.

      • To ascertain profit earned or loss incurred by a business during an accounting period. This is estimated by preparing Trading and Profit and Loss Account.
      • To ascertain the true financial position of a business. This is reflected by the Balance Sheet.
      • To enable comparison of current year’s performance with that of the previous year’s, i.e., intra-firm comparisons. Also, to compare own performance with that of the other firms in the same industry, i.e., inter-firm comparisons.
      • To assess the solvency and credit worthiness of the business
      • To provide various provisions and reserves to meet unforeseen future conditions and to toughen the financial position of the business
      • To provide vital information to facilitate various users of accounting information in decision making process.
    • Q2 :  What is the purpose of preparing trading and profit and loss account?

      • Answer :The purposes of preparing Trading Account are:

        • To calculate gross profit earned or gross loss incurred during an accounting period
        • To estimate the cost of goods sold
        • To record direct expenses (i.e., expenses incurred on the purchases and manufacturing of goods)
        • To measure the adequacy and reasonability of direct expenses incurred by comparing purchases with direct expenses incurred
        • To compare the realised efficiency and performance with the desired or proposed targetsThe purposes of preparing Profit and Loss Account are:
        • To calculate net profit or net loss
        • To ascertain net profit ratio and to compare this year’s net profit ratio with that of the desired and proposed target in order to assess the efficiency and effectiveness
        • To measure the adequacy and reasonability of indirect expenses incurred by ascertaining ratio between indirect expenses and net profit
        • To compare current year’s actual performance with desired and planned performance
        • To provide various provisions and reserves to meet unforeseen future conditions and to toughen the financial position of the business
    • Q3 :  Explain the concept of cost of goods sold?

      • Answer :Cost of goods sold (COGS) is the cost of merchandise that is sold to the customers. It includes cost of raw materials purchased, direct expenses incurred, value of opening stock, i.e., the value of the last year’s unsold stock and excludes closing stock if any, i.e., the value of current year’s unsold stock. The formula to calculate COGS is:Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

class 11 commerce study material:-Business Studies

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

    • 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.
      • Fall in the number of industries reserved for the public sector

        Number of industries reserved for the public sector178

        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.

    • Q3 :  What are the various types or organistions that come under the public sector?

      • Answer :The public sector consists of organisations that are directly owned and operated by the government. These organisations are either wholly or partially under government control. The following are the various forms of public sector organisations.

        • Departmental undertakings
        • Statutory corporations
        • Government companies

class 11 commerce study material:- Economics

Q1 :  Why were reforms introduced in India?

  • Answer :Economic reforms were introduced in the year 1991 in India to combat economic crisis. Economic Crisis of 1991 was a culminated outcome of the policy failure in the preceding years. It was in that year the Indian government was experiencing huge fiscal deficits, large balance of payment deficits, high inflation level and an acute fall in the foreign exchange reserves. Moreover, the gulf crisis of 1990-91 led to an acute rise in the prices of fuel which further pushed up the inflation level. Because of the combined effect of all these factors, economic reforms became inevitable and were the only way to move Indian economy out of this crisis.The following are the factors that necessitated the need for the economic reforms.1. Huge Fiscal Deficit: Throughout 1980s, fiscal deficit was getting worse due to huge non-development expenditures. As a result, gross fiscal deficit rose from 5.7% of GDP to 6.6% of GDP during 1980-81 to 1990-91. Subsequently, a major portion of this deficit was financed by borrowings (both from external and domestic source).The increased borrowings resulted in increased public debt and mounting interest payment obligations. The domestic borrowings by government increased from 35% to 49.8% of GDP during 1980-81 to 1990-91. Moreover, the interest payments obligations accounted for 39.1% of total fiscal deficit. Consequently, India lost its financial worthiness in the international market and, fell in a debt trap. Thus, economic reforms were needed urgently.2. Weak BOP Situation: BOP represents the excess of total amount of exports over total amount of imports. Due to lack of competitiveness of Indian products, India was not able to earn enough foreign exchange through exports to finance our imports. The current account deficit rose from 1.35% to 3.69% of GDP during 1980-81 to 1990-91. In order to finance this huge current account deficit, Indian government borrowed a huge amount from the international market. Consequently, the external debt increased from 12% to 23% of GDP during the same period. On the other hand, Indian exports were not potent enough to earn sufficient foreign exchange to repay these external debt obligations. This BOP crisis compelled the need for the economic reforms.

    3. High level of Inflation: The high fiscal deficits forced the central government to monetise the fiscal deficits by borrowings from RBI. RBI printed new money that pushed up the inflation level, thereby, making the domestic goods more expensive. The rate of inflation rose from 6.7% p.a. to 10.3% p.a. during 1980s to 1990-91. In order to lower the inflation rate, government in 1991 had to opt for the economic reforms.

    4. Sick PSUs: Public Sector Undertakings were assigned the prime role of industrialisation and removal of inequality of income and poverty. But the subsequent years witnessed the failure of PSUs to perform these roles efficiently and effectively. Instead of being a revenue generator for the central government, these became liability. The sick PSUs added an extra financial burden on the government’s budget.

    Thus, because of all the above reasons existing concomitantly, the economic reforms became inevitable.

Q2 :  Why is it necessary to become a member of WTO?

  • Answer :It is important for any country to become a member of WTO (World Trade Organisation) for the following reasons:i) WTO provides equal opportunities to all its member countries to trade in the international market.ii) It provides its member countries with larger scope to produce at large scale to cater to the needs of people across the international boundaries. This provides ample scope to utilise world resources optimally and provides greater market accessibility.iii) It advocates for the removal of tariff and non-tariff barriers, thereby, promoting healthier and fairer competition among different producers of different countries.

    iv) The countries of similar economic conditions being members of WTO can raise their voice to safeguards their common interests.

class 11 commerce study material

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