CBSE Class 11 Commerce Business Studies · Ch 1: Business, Trade and Commerce

Topics in this test

Difficulty: 3 easy · 6 medium · 21 hard

Sample questions with answers

The first 5 questions of this free test.

1. Q1. A trader sends goods to another city and draws a hundi stating that payment will be made only if the goods reach the destination safely. This type of hundi is a:

   • A. Jokhim-jog hundi
   • B. Nam-jog hundi
   • C. Dhani-jog hundi
   • D. Sah-jog hundi
   Solution

   A Jokhim-jog hundi carried a condition that payment would be made only on the safe arrival of goods, so it also covered the risk during transit.

2. Q2. Consider the following statements about the objectives of business: (i) Earning profit is the only objective of every business. (ii) A business has social objectives towards its consumers and society. (iii) Innovation and market standing are also objectives of business. Which statements are correct?

   • A. (i) and (ii)
   • B. (i), (ii) and (iii)
   • C. Only (i)
   • D. (ii) and (iii)
   Solution

   Profit is important but not the only objective; a business also has social, innovation and market-standing objectives, so (ii) and (iii) are correct while (i) is wrong.

3. Q3. Assertion (A): Every business involves an element of risk. Reason (R): Business deals with the future, which is uncertain. Choose the correct option.

   • A. A is true, but R is false
   • B. Both A and R are true, and R is the correct explanation of A
   • C. Both A and R are true, but R is not the correct explanation of A
   • D. A is false, but R is true
   Solution

   Both statements are true, and because the future is uncertain (demand, price, policy may change), business must bear risk, so R correctly explains A.

4. Q4. Consider the following statements about external trade: (i) Import trade is the purchase of goods from a foreign country. (ii) Entrepot trade means importing goods and then re-exporting them to a third country. (iii) Export trade means selling goods within the home country. Which statements are correct?

   • A. (ii) and (iii)
   • B. (i) and (ii)
   • C. (i), (ii) and (iii)
   • D. (i) and (iii)
   Solution

   Import is buying from abroad and entrepot is re-exporting imported goods, so (i) and (ii) are correct; export means selling to a foreign country, making (iii) wrong.

5. Q5. Which of the following is NOT an auxiliary to trade?

   • A. Retail trade
   • B. Advertising
   • C. Warehousing
   • D. Insurance
   Solution

   Retail trade is a part of trade (internal trade), not a supporting service; warehousing, insurance and advertising are auxiliaries that help trade.

Frequently asked questions

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