NIOS Class 12 Business Studies Chapter 2 Business Support Services

NIOS Class 12 Business Studies Chapter 2 Business Support Services Solutions to each chapter is provided in the list so that you can easily browse through different chapters NIOS Class 12 Business Studies Chapter 2 Business Support Services and select need one. Class 12 Business Studies NIOS Chapter 2 Business Support Services Question Answers Download PDF. NIOS Study Material of Class 12 Business Studies Notes Paper 319.

NIOS Class 12 Business Studies Chapter 2 Business Support Services

Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given Class 12 Business Studies Solutions, NIOS Senior Secondary Course Business Studies for All Chapters, You can practice these here.

Business Support Services

Chapter: 2

Module – 1 Introduction to Business

INTEXT QUESTIONS 2.1

Q. 1. Name the support service required in the following business activities:

(a) Movement of goods and services.

Ans: Transportation.

(b) Providing finance and payment facilities.

Ans: Banking.

(c) Coverage of business risks.

Ans: Insurance. 

(d) Storage of goods and making them available on demand.

Ans: Warehousing.

(e) Exchange of information and ideas.

Ans: Communication.

Q. 2. Name the bank which is termed as bankers’ bank.

Ans: Central bank/Reserve Bank of India.

Q. 3. Categorise the following under agency and general utility services of commercial banks. 

(a) Purchase and sale of securities.

(b) Issue of letter of credit.

(c) Issue of bank drafts.

(d) Internet Banking.

(e) Collection of dividends.

Ans: Agency services – (a), (e)

General utility service – (b), (c), (d)

Q. 4. Complete the flow chart:

Ans: (a) Secondary functions. 

(b) Accepting deposits. 

(c) Lending money. 

(d) General utility services.

Q. 5. Choose the best alternate:

(i) Overdraft facility is allowed to the account holder of:

(a) Saving Account.

(b) Current Account.

(c) Recurring Account.

(d) Fixed Deposit Account.

Ans: (b) Current Account.

(ii) Anil transferred funds electronically from his account in SBI, Delhi to Deepak who has account in Punjab National Bank, Bangalore. Which type of banking service was used by Anil.

(a) Pay order.

(b) Bank overdraft.

(c) National Electronic Fund Transfer. 

(d) Issue of bank draft.

Ans: (c) National Electronic Fund Transfer.

(iii) Sandeep inserts his ATM card in Machine and by using his PIN, he received his transaction statement. Which type of banking service Sandeep used?

(a) Traditional banking.

(b) E- banking.

(c) Both (a) and (b). 

(d) None of the above.

Ans: (b) E- banking.

(iv) Which deposit account requires deposit of money at regular periodical intervals?

(a) Savings deposit account.

(b) Recurring deposit account.

(c) Current deposit account.

(d) None of the above. 

Ans: (b) Recurring deposit account.

INTEXT QUESTIONS 2.2

Q. 1. Identify the insurance policies in the following cases:

(a) Policy taken up by husband and wife jointly. 

Ans: Joint life policy. 

(b) Periodic payment to the policyholder before the maturity of the policy.

Ans: Money back policy.

(c) Protection from loss due to crop failure. 

Ans: Crop Insurance.

(d) Policy that takes care of the expenditure on education of the dependent children of the policy holder.

Ans: Amartya Siksha Yojana insurance policy. 

(e) Protection against misappropriation of goods by employees.

Ans: Fidelity guarantee insurance.

Q. 2. Name the principle of insurance violated in the following cases.

(a) ‘A’ does not own the building but is trying to get it insured as a party to the insurance policy.

Ans: Principle of insurable interest.

(b) ‘A’ enters into life insurance contract with LIC of India. ‘A’ was ailing with heart decease but he did not reveal this at the time of entering the contract.

Ans: Principle of utmost good faith.

(c) ‘B’ enters into insurance contract with two companies ‘C’ and ‘D’. The subject matter is a building worth Rs.5 lakh. The building caught fire and properties worth Rs.3 lakhs were damaged. ‘C’ paid the entire claim and asked ‘D’ to share the claim. ‘D’ denies.

Ans: Principle of contribution.

(d) Goods worth Rs.50,000 are damaged and the insurance company pays the claim to ‘Z’ for the loss. ‘Z’ not only took the compensation for loss but also claims the damaged goods.

Ans: Principle of subrogation.

(e) ‘P’ takes an insurance policy for Rs.1 lakh with ‘Q’ company. The goods of ‘P’ are damaged due to fire the loss incurred is Rs.25,000. ‘Q’ shall restore the actual loss but ‘P’ claims full amount of the policy.

Ans: Principle of Indemnity.

INTEXT QUESTIONS 2.3

Q.2. Suggest suitable mode of transportation in the following cases:

(a) Transport of perishable goods within the country.

Ans: Road transport. 

(b) Transport of goods of high value and low volume.

Ans: Air transport.

(c) Quickest mode for carrying passengers.

Ans: Air transport.

(d) Convenient mode for short distance travel.

Ans: Road transport. 

(e) Economical mode of transport for long distance within the country.

Ans: Rail transport.

Q. 2. Give a phrase as a substitute of the following communication:

(a) Conversation with the help of telephone.

Ans: Oral Communication,

(b) Communication through symbols and diagram.

Ans: Visual Communication.

(c) Traffic signal showing red light.

Ans: Visual Communication.

(d) Sending SMS to friends through mobile phone. 

Ans: Written Communication.

(e) Saluting our nation flag in different occasion. 

Ans: Gestural Communication.

Q. 3. Match the following:

Column A	Column B
(a) Retail post	(i) Collection of letters fromthe customer’s doorstep
(b) Media post	(ii) Compensation for lossor damage of the parcels
(c) Direct post	(iii) advertisement on post card
(d) Business post	(iv) Collection of telephone bill
(e) Insured post	(v) Sending pamphlets toprospective customers.

Ans:

Column A	Column B
(a) Retail post	(iv) Collection of telephone bill
(b) Media post	(iii) advertisement on post card
(c) Direct post	(v) Sending pamphlets toprospective customers.
(d) Business post	(i) Collection of letters fromthe customer’s doorstep
(e) Insured post	(ii) Compensation for lossor damage of the parcels

INTEXT QUESTIONS 2.4

Q. 2. Complete the following incomplete words by taking clues from the statement given for each, Every blank represents one letter only. First one has been done for you.

(a) T ___ L ___ X. (TELEX)

(b) V ___ ___ C ___ MAIL.

(c) ___ ___ X.

(d) T ___ L ___ ___ R ___ M.

(e) E ___ M ___ ___ ___.

Clues:

(a) Communication using tele-printer.

Ans: TELEX. 

(b) Computer based system for receiving and responding the incoming telephone calls.

Ans: (b) VOICE MAIL. 

(c) Machine that transmits hand written massage instantly.

Ans: FAX.

(d) A form of written communication.

Ans: TELEGRAM.

(e) Communication of written message through internet. 

Ans: E-MAIL.

INTEXT QUESTIONS 2.5

Q. 2. Identify the type of warehouse in the following cases:

(a) Warehouse to store the goods of public.

Ans: Public warehouse. 

(b) Warehouses owned and managed by government.

Ans: Government warehouse. 

(c) Warehouses for storage of imported goods on which import duty is yet to be paid. 

Ans: Bonded warehouse. 

(d) Warehouses set up for the benefit of its members.

Ans: Cooperative warehouse. 

(e) Warehouses owned and managed by private traders for stocking their goods.

Ans: Private warehouse.

TERMINAL EXERCISE

Very Short Answer Type Questions:

Q. 1. What is meant by the term ‘Banking’?

Ans: Banking refers to the provision of services by banks like acceptance of deposits,grant of loans and advances and other agency as well as general utilities services.

Q. 2. Define the term ‘Insurance’.

Ans: Insurance is a contract between the insurer and insured whereby the insurer undertakes to pay a fixed amount of money to compensate the insured against risks of loss or damage caused by happening of certain events, in exchange for a fixed sum of a money.

Q. 3. Name the hindrance that is removed by transportation.

Ans: Problem of distance. 

Q. 4. State the benefits of insured post.

Ans: If the sender wants that the mail should definitely be delivered to the addressee otherwise it must return to him, then post office offers ‘registered post’ facility. For this service, the post office charges additional amount and issues a receipt for the registered post.

Q. 5. What is bonded warehouse? 

Ans: Bonded Warehouses: Bonded warehouses to store imported goods for which import duty is yet to be paid. These warehouses are generally owned by dock authorities and found near the ports.

Q. 6. Give an example of e-banking.

Ans: ATM Services is an example of e-banking.

Q. 7. Name any two savings schemes of post office.

Ans. 1. Recurring deposite.

2. Public provident fund.

Q. 8. Give the full form of PPF and MIS.

Ans: PPF — Public provident fund.

MIS — Monthly Income Scheme.

Short Answer Questions:

Q. 1. Mention any two general utility services rendered by commercial banks.

Ans: General Utility Services: General utility services are those services which are rendered by commercial banks not only to the customers but also to the general public. These are available to the public on payment of a fee or charge. 

These include:

1. Issue of bank drafts, pay order (banker’s cheque), travellers’ cheques.

2. Issue of letters of credit.

3. Safe-keeping of valuables in safe deposit locker.

4. ATM card, debit card and credit card facility.

5. Internet banking and phone banking.

Q. 2. Distinguish between whole-life policy and endowment policy.

Ans: (a) Whole-life policy: In case of whole life policy the premium is payable regularly throughout the life of the insured or for a fixed period. The sum assured becomes payable to the heirs of the insured after his death. Such a policy is taken up by a person who wishes to provide financial support to his/her dependents after the death.

(b) Endowment Policy: An endowment policy, runs for a limited period or upto a certain age of the insured, and the sum assured becomes due for payment at the end of the specified period or on the death of the insured if it occurs earlier. This is the most common form of life insurance policy taken up by the people.

Q. 3. State any two points of importance of transportation for business.

Ans: (a) Transport plays a very important role in distribution of goods both within a country and across the borders.

(b) Transport helps in bringing about stable and uniform prices in different markets as traders are able to adjust the supply of goods at different places according to the changing demand. 

(c) Consumers have the benefit of getting goods at their door step and have a wider choice of goods at competitive prices. 

(d) It ensures continuous supply of raw materials to the industry.

(e) It contributes to growth of large scale industries by facilitating the inflow of materials and outflow of finished goods.

(f) International competition is encouraged with the improved transport system. This makes global markets accessible to sellers and buyers of different countries.

Q. 4. What is meant by post restante letter.

Ans: Post Restante letter means which can be sent to the postmaster of the locality where the receiver resides. The receiver can collect the letter from the post office on showing his identity. This facility is suitable for tourists and travelling salesmen who are not sure about their address in a particular place, or for any other person looking for a fixed address at a new place.

Q. 5. Explain any two functions of warehousing.

Ans: The warehouses preserve goods on a large-scale in a systematic and orderly manner. They provide protection to goods against heat, wind, storm, moisture, etc, and also minimize losses due to spoilage, wastage etc. In addition to this, warehouses now a days also perform a variety of other functions a stated below:

(a) Storage of Goods: The basic functions of warehouses is to store goods properly till they are required for use, consumption or sale.

(b) Protection of Goods: A warehouse provides protection to goods from loss or damage due to heat, dust, wind and moisture, etc. It makes special arrangements for different products according to their nature.

Q. 6. What is meant by cash credit?

Ans: Cash Credit: Under cash credit system, person, firm or company can borrow money from the bank. Money can be borrowed up to a specified limit. The borrower withdraws money as and when required. Interest is charged on the amount withdrawn by the borrower. Cash credit limit is decided by the bank on the basis of the borrower’s assets and personal reputation.

Q. 7. What is meant by a Bank overdraft?

Ans: Bank Over draft: Current account holder is allowed to draw by cheque more than the amount to his credit up to a specified limit. This facility is provided against the security of some assets. A higher rate of interest is charged on bank overdrafts. Extra amount withdrawn from the current account must be deposited in the account with in the prescribed period

Q. 8. Give the full form of NSC. 

Ans: National Services Certificates.

Q. 9. What is meant by courier service? 

Ans. Courier services are offered by private sector enterprises. Letters, products in small quantity etc. are sent from one place to another by availing courier service.

Long Answer Questions:

Q. 1. Explain the primary functions of a commercial bank.

Ans: Primary Functions: The primary functions of a commercial bank include:

(i) Accepting deposits. and 

(ii) Lending money.

(i) Accepting Deposits: The most important activity of a commercial bank is to accept deposits from the public. People who have surplus income and savings find it convenient to deposit it with banks. For the convenience of the customers, banks provide different types of deposit accounts like Fixed Deposit Account, Recurring Deposit account, Current Account, Savings Bank Account, etc. with varying rates of interest. Public is also assured of the safety of funds deposited with the bank.

(ii) Lending Money: The second important function of a commercial bank is lending of money to the public as well as to the business houses. It takes the form of loans and advances to the customers at the prescribed rates of interest. Loans are granted for a specific period. The borrower may be given the entire amount in lump sum or in instalments. Loans and advances are generally granted against the security of certain assets. The credit facility granted by the banks is usually for a shorter period of time which takes the form of cash credit, overdraft or discounting of bills. As stated earlier, banks also provide loans for a medium term or a long period.

Q. 2. Describe any two principles of a valid insurance contract.

Ans. The validity of an insurance contract rests upon certain well established principles that apply to various types of insurance. 

These are:

(a) Principle of Utmost Good Faith: Insurance contracts are the contracts of mutual trust and confidence. Both parties to the contract ie, the insurer and the insured, must disclose all relevant information relating to the subject matter of insurance. Incase of life insurance, for example, the proposer must honestly disclose all information relating to his/her health, habits, personal history, family history etc. In case of any concealment about the material facts, the contract will not be valid. It is so because the risk can be evaluated only on the basis of these facts relating to subject matter of insurance.

(b) Principle of Insurable Interest: According to this principle, the insured must have insurable interest in the subject matter of the insurance. Insurable interest means financial or pecuniary interest in the subject matter of insurance. A person has insurable interest in the property or life insured if he stands to gain from its existence or loose from its damage or destruction. For example, a man has insurable interest in his own life and that of his wife, and similarly the wife has insurable interest in her husband’s life. As for the property, normally it is the owner who has insurable interest in his/her property. But, when he/she (the owner) has taken loan from a housing finance company to build his/her house, the housing finance company also has insurable interest in the house and it can seek its insurance. It may be noted that in case of life insurance, the insurable interest must be present at the time of taking the policy, in case of marine insurance insurable interest must exist at the time of loss or damage to the property, and in case of fire insurance, it must exist both at the time of taking the policy as well as at the time of loss or damage to the property.

Q. 3. What is meant by transportation? State any two different modes of transport.