ICSE Commercial Studies Previous Year Question Paper 2009 Solved for Class 10

ICSE Paper 2009

(Two Hours)
Answers to this Paper must be written on the paper provided separately.
You will not be allowed to write during the first 15 minutes.
This time is to be spent in reading the Question Paper.
The time given at the head of this Paper is the time allowed for writing the answers.
Attempt all questions from Section A and any four questions from Section B.
The intended marks for questions or parts of questions are given in brackets [ ].

Section-A (40 Marks)
(Attempt all questions from this Section)

Question 1:
Distinguish between:
(a) Variable costs and Semi variable costs. [2]
(b) Recruitment and Selection. [2]
(c) A Saving Account and a Current Account. [2]
(d) Internal and External Stakeholders. [2]
(e) A Profit and Loss Account and a Balance Sheet. [2]

(a) Refer Ans. 1. (a), 2013.

Recruitment Selection
1. It unvalues searching for pros­pective employees and stimula­ting them to apply. It upvalues comparing and choosing suitable candidates.
2. First stage in hiring. Second stage in hiring.

(c) Refer Ans. 1. (b), 2013.

(d) Internal stakeholders are those individuals and group who influences the enterprise from inside or within e.g. shareholder, employee.
External stakeholders are those individuals and group who are a part of the firih’s external environment. They effect the firm’s activity from outside e.g. customer, suppliers.


Profit and Loss Balance Sheet
1. To show net profit or loss during a specified period. Its object is to ascertain the financial position on a specific date.
2. It is an account. It is a statement.

Question 2:
(a) What is meant by Accounting Cycle? ** [2]
(b) List two main objectives of Orientation Training. [2]
(c) State four methods of Brand Promotion. [2]
(d) What purpose does the Copyright Act, 1957 serve? ** [2]
(e) List two uses of a Cash Flow Statement. [2]
** Answer has not given due to out of the present syllabus.


  1. It familiarises the new employees with the policies, rules and regulations of the organisation and the conditions of the job.
  2. It helps new employees to adjust quickly to new environment.

(c) Four methods of brand promotions:

  1. Advertising.
  2. Personal Selling.
  3. Sales promotion.
  4. Publicity.

(e) Two uses of cash flow statement:

  1. Cash flow statement is helpful in judging the cash position of the enterprise.
  2. It provides information about the liquidity position and solvency of the enterprises.

Question 3:
(a) Order cheques are a safer mode of payment than bearer cheques. Justify. [2]
(b) What is a Debt Equity Ratio? ** [2]
(c) Mention two objectives of Industrial Relations. [2]
(d) Why are necessary ethics to be incorporated in the Accounting Profession? [2]
(e) List two benefits of Group Insurance to employees and employers. [2]
** Answer has not given due to out of the present syllabus.

(a) The order cheques are a safer mode of payment than bearer cheques because an order cheque is payable to the person named in the cheque or his order. An order cheque can be transferred only after endorcement and not mere delivery.
\(\text{Debt Equity}\,\text{Ratio}=\frac{\text{Long term debt}}{\text{Owners Equity}}\text{ }\)

(c) Two objectives of industrial relations are:

  1. To develop mutual trust and faith between employer and employee.
  2. To settle industrial disputes between employer and employee peacefully and at the earliest.


  1. It provides risk coverage to the employees as long as they remain in the service of the employer.
  2. In case of injury or death of an employee, the claim received by the employer is paid to the employee or his nominee.
  3. The premium is gqperally paid jointly by the employee and the employer. (any two)

Question 4:
(a) Closing stock is valued at cost price or market price whichever is lesser. Identify and explain the accounting principle underlying the above statement. ** [2]
(b) Why is Pricing, a marketing activity, considered a difficult task? [2]
(c) State any two expectations of competitors from a business concern. [2]
(d) Give one reason why Gross Profit to Turnover Ratio is considered as an important profitability ratio. ** [2]
(e) What is a Non-trading Organization? Give examples. [2]

(b) Pricing is a difficult function because it determines the sales volume and the amount of profit. A sound price policy helps to satisfy customers and to yield profits. Determination of price is influenced by large number of factors such as cost of production, competitions, nature product etc.

(c) Refer Ans. 3. (a), 2013.

(e) A non-trading organisation does not carry on any business and it does not aim at making profit eg. schools, colleges, clubs.

Section – B (40 Marks)
(Answer any four questions from this section)

Question 5:
(a) Give any five points of differences between stakeholders and customers of a company. [5]
(b) Explain the meaning of Direct tax and explain any four merits of it. ** [5]

(a) Differences between Stakeholders and Customers of a Company:

Stakeholders Customers
1. They have financial stake in business. No business stake.
2. It supply financial capital or human capital. Customer do not supply any capital.
3. Stakeholder do not buy goods or services from the organisation. Customers buy goods or services from the organisation.
4. Stakeholder take risks of the organisation. Customer do not take risks.
5. They share profits. Do not share profits.

Question 6:
(a) Advertising encourages artificial living. Do you agree with this statement? Why? [5]
(b) Explain five technical qualities of a successful salesman. [5]

(a) Yes. Advertising encourages artificial living because:

  1. Extravagance: Advertising tempts people to buy goods which they can not afford. They become extravagent and do not hesitate even to adopt corrupt practices to earn more. This creates frustration and corruption in society. People become greedy and self contened, causing unrest and jealousy.
  2. Wastage of resources: Money spent on advertisement is sheer wastage because it does not add to the utility of products and services. Most of the advertisements are either ignored or escape the attention of consumers.

(b) The five technical qualities of a successful salesman are:

  1. A good salesman should have adequate and up-to-date knowledge of selling techniques.
  2. A good salesman should have adequate knowledge of his product.
  3. A good salesman should have adequate knowledge of his competitors.
  4. Knowledge about the customer like buying motives, likes and dislikes etc.
  5. Knowledge about the company like history, policy and activities.

Question 7:
What is a Budget? Discuss any eight uses of a Budget to a business enterprise. [10]

A budget is a plan expressed in quantitative or monetary terms for a specific period of time, usually one year. It is a financial statement prepared prior to a defined period of time, of the policy to be purchased during that period for the purpose of attaining a given objective.
The uses of budget is as follows:

  1. Operationalise plans: Budget makes business plans operational. They serve as a means of implementary different plans, goals of an organisation and its basic plans cannot be concerted into performance without budgets and other operational plans.
  2. Higher efficiency: Budget bring efficiency and economy in the working of a business firm. They help management in obtaining the most profitable combination of different factors of production.
  3. Sense of responsibility: Budget puts a sense of responsibility on the shoulders of management. Budget motivates them to act responsibly and escape from extravagance.
  4. Source of motivation: The projected cost cuts results into the profit expansion. This acts as the motivation and leads an enterprise to stick to the budget.
  5. Co-ordination: The various budgets made in the organisation are to be co-ordinated and should follow the same objectives. Hence it makes co-ordination mandatory.
  6. Delegation of authority: The budget is prepared by the management but the responsibility to carry on the budget is vested to the respective department. Thus the budget helps to delegate the authority and fix the responsibility.
  7. Effective control: Management keeps effective control and help the various departments in the organisation to keep an effective control and check on extravagance.
  8. Sound planning: The good budget helps to have sound planning. This is also necessary for the organisation to have a sound planning structure.

Question 8:
(a) Describe the role of Trade Unions in business concerns. [5]
(b) Distinguish between Marketing and Selling. [5]

(a) The role of Trade Unions in business concerns are as follows:

  1. Intra-mural activities: The intra-mural activities refer to those efforts of trade unions which are mainly performed for the betterment of workers in relation to their employment. Through these activities, trade unions ensure adequate wages, better working conditions, better treatment and a reasonable share and control in the management and profit of industry.
  2. Extra-mural activities: These activities refer to those activities of the trade union, which are performed, for providing help to workers in times of need. Thus, trade unions help the workers in case of sickness and accident and give them financial support during the period of unemployment, strikes and lock-out. They also foster a spirit of co-operation and diffuse education among labourers.
  3. Political activities: Trade unions also contest elections and try to send their representatives ift Parliament and State Legislatures. In India, such development is not yet significant and trade unions are politically unorganized.


Marketing Selling
1. Wide Narrow
2. Need of buyer Need of seller
3. Profit through customer satisfaction. Profit through sales volume.
4. Begins before production. Begins after production
5. Long-term. Short-term.

Question 9:
(a) What do you understand by Agency Services of a commercial bank? Explain any four agency services of a commercial bank. [5]
(b) Why do we heed uniform Accounting Standards throughout the world? ** [5]

(a) A commercial bank serves as an agent of its customer in several ways. As an agent it performs the agency functions in accordance with the instructions from its customer.
Four agency functions of a commercial bank:

  1. Collection of payments: The commercial banks collect the payment of promissory notes, bills of exchange, cheques, dividends, interest on shares, debentures, rent, etc. on behalf of their customers.
  2. Buy and sell shares: They buy and sell shares and securities for their customers as per their instructions.
  3. Making payments: They transfer funds from one branch of the Bank to another and from one place to another as per instructions of their customers. They make payments of loan installments, interest, insurance premiums, taxes, etc. on belialf of their customers.
  4. Acts as trustee or executors agents: They act as trustees or executors and deal with the financial matters, relating to other institutions on behalf of the customers. They act as the agents or representatives of their customers for other banks and financial institutions, inside the country and abroad.

Question 10:
Mr. Francis is the Human Resource Manager of a Private Limited Company. He has observed that the employees’ performance level has declined. As a result, efficiency is low and has affected the organizational objectives. He is of the opinion that employees should be imparted some training to enhance their performance.
(a) Suggest on-the-job training by explaining its major techniques that would increase the level of productivity of employees. [5]
(b) Suggest any two evaluation systems that Mr. Francis may use to judge the performance of employees after training. [5]

(a) On-the-job training provides first hand job, knowledge and experience under actual working conditions. However, the noise of the work place may distract the attention of trainees and they may find at difficult to concentrate on learning.
Some major techniques used for on-the-job training are given below:

  1. Job instruction training (JIT): This is the most popular form on the job training. It is also known as step-by-step training.
    (a) Preparing the trainees by telling them about the job.
    (b) Presenting the instructions, giving the necessary information.
    (c) Letting the trainees try out the job.
    (d) Observing try out and providing necessary assistance and follow up.
  2. Apprenticeship training: Under this method, the trainees learn by working with those who are already skilled in their jobs. People who want to enter skilled-traders are required to undergo apprenticeship training.
  3. Job rotation: This method involves the movement or transfer of the trainees from one job to another, basically of similar nature, either in same department or different departments. The trainee get job knowledge and gains experience in different assignments.

(b) The two systems are:

  1. Employee ranking: Under this system the superior compares an employee with all other employee in the group on the basis of their job performance. The best employee is given the first rank, the second best the second rank and so on. All employee are ranked on overall basis.
  2. Critical incidents method: In this method, the rater is required to record some exceptional events and the behaviour of each employee during such events. Employees are rated on the basis of whether their behaviour was proper or not.
    Scores are assigned to the extent to which the behavior was considered satisfactory.

ICSE Class 10 Commercial Studies Previous Years Question Papers

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