First PUC Business Studies

Chapter-2 Forms of Business Organization

Section-A

Answer the following questions, each question carries 1 mark:

1. Name any one form of business organization.Ans: Sole trading concern, partnership firm, Joint Stock Company

2. Give an example to sole trading concern.Ans: Medical shops, Stationery shop

3. Who is karta?Ans: Karta is the eldest male member of the joint Hindu family having unlimited liability.

4. State the minimum & maximum members in partnership.Ans: Minimum no. is 2 & Maximum is 10 in case of banking business and 20 in case of non banking business.

5. State the minimum & maximum members in co-operative society.Ans: .Minimum is 10 & maximum is unlimited.

6. Which act governs the partnerships in India?Ans: The Indian Partnership Act of 1932

7. Which act governs co-operative societies in India?Ans: Co-operative societies Act of 1912.

8. Who are co-parceners?Ans: They are the male members of the joint hindu family whose liability is

limited. They help karta in managing business.

9. Who is a minor partner?Ans: He is a partner in a partnership firm whose age is below 18 years, contributes capital, shares only profits, and has limited liability.

10. Is registration of partnership is compulsory?Ans: No it is not compulsory. Section-BAnswer the following questions, each question carries 2 marks:

11. Give the meaning of HUF.Ans: It is a form of business organization which is owned and managed by the members of the same family, controlled by Karta and managed by other male members called coparceners.

12. Define Partnership.Ans: “The relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all.”

13. Who is an active partner?Ans: He is a partner who contributes capital, participates in management, shares profits/losses having unlimited liability.

14. Who is a sleeping partner?Ans: He is a partner who contributes capital, does not participates in

management, shared profits/losses having unlimited liability.

15. Who is secret partner?Ans: He is a partner who contributes capita, participates in management, shares profits/losses having unlimited liability but he is unknown to the public.

16. Who is a nominal partner?Ans: He is a partner who neither contributes capital nor participates in management but has unlimited liability as he allows the firm to use his name.

17. Who is partner by estoppels?Ans: He is a partner who neither contributes capital nor participates in management but has unlimited liability as he gives an impression to outsiders he is a partner of the firm.

18. Who is a partner by holding out?Ans: He is a partner who neither contributes capital nor participates in management but has unlimited liability as he allows the firm to be represented as a partner.

19. What is partnership at will?Ans: It is a type of partnership firm which comes into existence or winded up at the will of the partners.

20. What is particular partnership?Ans: It is a type of partnership firm which is formed for a particular objective or for a specified time. After the completion of an objective or time it can be dissolved or continued as per the will of the partners.

21. What is general partnership?Ans: It is a type of partnership firm where partners can participate in the management of the firm as their liability is unlimited. Registration of such firm is not compulsory.

22. What is limited partnership?Ans: It is a type of partnership firm where liability of at least one partner is unlimited and others may have limited liability. Registration of such firm is compulsory. Partners here cannot participate in the management of the firm.

23. What is a co-operative society?Ans: It is a voluntary association of persons. Who join together with the motive of welfare of the members.

24. What is consumer co-operative society?Ans: It is a type of co-operative society formed to protect the interest s of consumers by providing good quality products at reasonable prices.

25. What is producer’s co-operative society?Ans: : It is a type of co-operative society formed to protect the interests of small producers by supplying raw materials , equipments and other inputs and buying their output for sale.

26. What is marketing co-operative society?Ans: : It is a type of co-operative society formed to protect the interest of the producers by providing them transportation, warehousing, packaging functions to sell the output at the best possible price.

27. What is farmer’s co-operative society?Ans: : It is a type of co-operative society formed in the interest of farmers by providing them better inputs at reasonable costs and help them gain the benefits of large scale farming.

28. What is credit co-operative society?Ans: : It is a type of co-operative society for providing easy credit on reasonable terms to the members.

29. What is a co-operative housing society?

Ans: : It is a type of co-operative society formed to help people with limited income to construct house at reasonable costs.

Section-C

Answer the following questions, each question carries 5 marks:

1. Briefly explain the features of sole trading concern.

Ans: Following are the features of of sole trading concern.

a. Formation & closure: Easy to form and also close business as no legal formalities.

b. Liability: Unlimited liability of owner.c. Profir/Loss: Owner enjoys profits &

bears losses alone.d. Control: Owner alone controls business.e. No separate entity: in the eyes of law

no distinction is made between owner and business.

Lack of business continuity: Death, insanity, bankruptcy of owner leads to closure of business.

2. Explain the types of partnership firms.Ans: Classification on the basis of Duration:

a. Partnership at willb. Particular partnership

Classification on the basis of Liability:a. General partnershipb. Limited partnership

(For explanation, refer 2 marks answers)

3. Explain the features of partnership firms.

Ans: Following are the features of partnership firms:

a. Formation: As per the Indian partnership Act of 1932

b. Liability: Unlimited.c. Risk bearing: Sharing risk among

partners.d. Decision making & control: Mutual

consent of all partners.e. Continuity: Death, retirement,

insolvency of a partner will not affect life of the business.

f. Membershipg. Mutual agency: Business carried on all

or any one of them acting for all.

4. Explain the features of co-operative societies.

Ans: Following are the features of co-operative societies:

a. Voluntary membership: Anyone can

become the member irrespective of religion, caste, gender.

b. Legal status: Registration is compulsory.c. Limited liabilityd. Control: Decisions are taken by

managing committee.e. Service motive

5. What is Partnership Deed? Mention the contents.

Ans: It is an agreement in writing which specifies the terms and conditions that govern the partnership.

Following are the contents:

a. Name & address of the firmb. Nature of businessc. Duration of businessd. Names and addresses of partner4se. Capital invested by each partnerf. Distribution of profits or lossesg. Duties and obligations of partnersh. Salaries and drawings of partnersi. Rules followed during admission,

retirement, death of a partner dissolution of firm

j. Preparation of accountsk. Method of solving disputes.

Section-D

Answer the following questions, each question carries 10 marks:

1. Explain the merits and demerits of sole trading concern.

Ans: Merits:

a. Quick decision makingb. Business secrets can be maintainedc. Owner alone enjoys profitsd. Ease of formation and closuree. Self-satisfaction to the owner.

Demerits:

a. Limited resourcesb. Limited life of the businessc. Unlimited liabilityd. Limited managerial abilitye. Incompetent

2. Explain the merits and demerits of partnership firms.

Ans: Merits:

a. Ease of formation and closureb. Balanced decision making

c. Capital contribution by all partnersd. Sharing risk among all partnerse. Secrecy: no publishing books of

accounts

Demerits:

a. Unlimited liability of partnersb. Limited resources as max.no.of

partners is 10 or 20c. Conflicts among partners d. Lack of continuity as retirement,

death, insolvency of partners leads to dissolution of firm

e. No public confidence as books of accounts are not published

3. Explain the merits and demerits of co-operative societies.

Ans: Merits:

a. Equal voting rights: one man one voteb. Limited liabilityc. Stable existence-long life of businessd. Economy in operation as middlemen

are avoidede. Support from government- tax

exemptions on incomef. Ease of formation

Demerits:

a. Limited resources- capital contribution only from members

b. Inefficiency in management as professionals are not appointed

c. Lack of secrecy-open discussions in meeting

d. Government control- GOVT. Rules to be followed

e. Differences of opinions- chances of disputes are more

4. Explain the types of partners:

Ans: following are the types of partners:

a. Active partnerb. Sleeping partnerc. Secret partnerd. Nominal partnere. Minor partnerf. Partner by estoppelsg. Partner by holding out

(For explanation, refer 2 marks answers)

5. Explain the types of co-operative societies.

Ans: following are the types of co-operative societies:

a. Consumer co-operative societies:b. Producer’s co-operative societiesc. Marketing co-operative societiesd. Farmer’s co-operative societiese. Credit co-operative societiesf. Co-operative housing societies

(For explanation, refer 2 marks answers)

co-operative societiesSection - A

1. what is a co-operative society?It is a voluntary association of persons,

who join together with the motive of welfare of the members.

2. which act governs the co-operatives societies in India?

The co-operative Societies Act of 1912.SECTION - B

3. Mention any two type of co-operative societies?

Consumer Co-operative societies and Marketing Co-operative societies.

SECTION - C4. Explain the characteristic features of co-

operative societies? voluntary membership: The

membership in a co-operative society is voluntary. There is no compulsion for the members to join. Membership is open to all irrespective of the caste, religion and gender.

legal status: It can enter into contract and hold property in its name.

limited liability: Liability is limited to the extent of the amount of capital contributed by them .

control: The right to vote gives the members a chance to choose the members who will constitute the managing committee.

Service motive: The values of the society emphasis mutual help and welfare.

5. Explain the merits of co-operative societies?

Equality of voting rights: Irrespective of the amount of capital contributed by the member , each member has equal voting rights. One man one vote is the governing principle.

Limited Liability: The liability of the members is limited to the extent of capital contributed by them.

Stable existence: The existence of the members does not affect the continuity of the society.

Ease of operation: It can be started easily with minimum of 10 members. It has simple legal formalities. Its formation is governed by Co-operative Societies Act of 1912.

6. Explain the demerits of co-operative societies?

Limited Resources: The capital contribution of the members are from limited means.

Inefficiency in management: The members who offer the services are not professionally equipped to handle the management functions effectively.

Lack of Secrecy: As the meetings of the members are often open discussions they cannot maintain secrecy .

Government Control: The intervention of the government in complying with rules and regulations, auditing and accounts etc., does not allow the society to function efficiently.

Difference of opinion: Personal motive may dominate the welfare motive and the benefit of other members may take back the performance of the members.

SECTION - D1. Explain the types of co-operative

societies? Consumer's co-operative society: This is

formed to protect the interest of the consumers. It aims at eliminating middle man to achieve economy in operations.

Producer's Co-operative Society: It is formed to protect the interest of small producers. It supplies raw materials and equipments and other inputs to the members and also buys their output for sale.

Marketing Co-operative Societies: It aims to eliminate middleman and improve competitive position of its members by securing a favourable market for the products.

Farmer's Co-operative Societies: The aim is to gain the benefits of large scale farming and increase the productivity. These societies provide better quality seeds, fertilizers and other modern equipments for the use in the cultivation of crops.

Credit Co-operative Societies: The aim of such society is to protect the members from the exploitation of lenders who charge high rates of interest on loans. They provide loan to the members at low rate of interest.

Co-operative housing Societies: The members of these societies consist of people who are desirous of procuring residential accommodation at lower cost.

CHAPTER 3

JOINT STOCK COMPANYSECTION - A

1. Define Joint Stock Company?"A company is an artificial person created by law having a separate legal entity with a perpetual succession and a common seal".

2. what is the minimum and maximum member in a private company ?

minimum 2 and maximum 50.3. what is the minimum and maximum

members in a public company?minimum 7 and maximum unlimited.

4. which type of company issues prospectus?

Public limited companies.5. State two documents for incorporation

of company.MOU and AOA

6. State two certificates for the formation of a company?

Incorporation certificate and business commencement certificate.

7. Who are promoters?A promoter is said to be one who undertakes to form a company with reference to given project and to set it going and who takes the necessary steps to accomplish that purpose.

8. Name the two types of company.

Public company and private Company.

SECTION - B9. What is prospectus?

It is an invitation inviting the general public for the subscription of shares and debentures of the company or to make deposit in the company.

10. what is meant by minimum subscriptions?

In order to prevent companies from commencing business with inadequate resources, it has been provided that the company must receive applications for a certain minimum number of shares before allotment .

SECTION C11. List out the differences between private

company and public limited company.PRIVATE COMPANY PUBLIC COMPANY

Formation is easy.

It needs only one certificate.

The name must end with Private Limited.

It cannot invite public to subscribe for shares and debentures.

Minimum2 and maximum 50 members.

Formation is difficult.

It requires two certificates .

The name must end with public limited company.

It can invite public to subscribe for shares and debentures.

Minimum 7 and maximum unlimited members.

12. Explain the clauses of MOA. Name Clause: This clause contains the

name of the company as approved by the registrar.

Registered office clause: This clause contains the name of the state in which the company's registered office is situated,

Object Clause: It defines the purpose for which the company is formed.

Liability Clause: It contains the liability of the members to the amount unpaid on the shares owned by them.

Capital Clause: It specifies the maximum capital which the company will be authorized to raise through issue of shares.

13. Explain the merits of joint stock company.

Large Capital: It facilitates huge amount of capital for investment.

Legal entity with perpetual succession: It enjoys a separate legal and permanent existence.

Limited Liability: The liability is limited to the face value of the shares.

Transferability of shares: The shares held by the shareholder is easily transferable to others.

Democratic Control: The shareholders through their voting power decide matters of policy.

14. Explain the demerits of joint stock company?

Delay in decision making: Quick decision and prompt action are difficult in the management of a company. It is an inflexible enterprise.

Lack of Secrecy: Public company has to provide a lot of information to the registrar of companies and to the general public.

Incapable management: The promoters at times may cheat the public and collect capital and misuse for their personal gain.

Too many legal formalities: The establishment of a company proves to be troublesome and burden because of complicated legal formalities.

Lack of initiative: The company does not afford scope for personal initiative. It results in inefficiency.

SECTION - D15. Explain the features of joint stock

company.

Association of persons: It is a voluntary association of persons. There is no compulsion to become a member.

Formation: Formation is time consuming, complicated process and requires the preparation of several documents. Registration is compulsory is as per the companies act.

Artificial person: It is a artificial person created by law.

Separate legal entity: Its assets and liabilities are separate from those of its owners.

perpetual succession: Company being creation of law. Members may come and members may go.

Control: The board of directors are directly accountable to the shareholders for the working of the company.

Liability: The liability of the members is limited to the extent of the capital contributed by them in a company.

Common Seal: The board of directors enter into an agreement with others by indicating the company's approval through a common seal.

Transfer of Shares: The shares are freely transferable from members to any person without the consent of the company.

Risk bearing: The risk of loss is borne by all the shareholders,

16. Explain the different stages in the formation of the company.

The formalities in the formation of a company is classified into four stages:

Promotion Incorporation Raising of Share Capital Commencement of business Promotion: This is the first stage in the

formation of a company. Promoter takes the initiative in the formation. After examining the feasibility of idea the promoter assemble resources prepare necessary documents, gives a name and performs various other

activities like company registration and obtain the necessary certificates to commence business.

Incorporation: After completing the formalities like preparation of MOA, AOA and submitting it to the registrar and after completing the various other formalities the promoter makes an application for incorporation of the company. The application is filed with the registrar of the company

Raising of Share Capital: A public company has to raise the required funds by means of issue of shares and debentures. It has to issue prospectus to subscribe the capital and undergo various other formalities.

Commencement of business: If the amount of minimum subscription is raised through issue of shares, a public company applies to the registrar of the company for the issue of Certificate of Commencement of Business. The registrar shall examine the documents and if found satisfactory a Certificate of Commencement of Business will be issued. With the grant of this certificate the formation of a public company is completed.

17. Explain the functions of a promoter. OR

Explain the various stages of promotion of a companyThe various stages in the promotion stages in the company are as follows:

Identifications of business opportunity: The first activity of the promoter is to identify a business opportunity

Feasibility Studies: Depending the nature of the project and with the help of the specialists like engineers, chartered accountants a feasibility study like technical feasibility, financial feasibility and economic feasibility is perfromed.

Name Approval: The promoters have to then select a name for the company and submit an application to the

registrar of the companies. Three names in the order of priority is to be submitted.

Fixing the Signatories to the memorandum of association: Promoters has to decide the members who will sign the MOA.

Appointment of professionals: Certain professionals like auditors, bankers etc are to be appointed by the promoters to assist them in the preparation of documents.

Preparation of necessary documents: Certain legal documents like MOA and AOA has to be prepared by the promoter with the help of professionals and has to be submitted to the registrar. MOA is the document defines the objectives of the company. AOA are the rules regarding the internal management of a company. Apart from this the promoter has to also prepare a written consent of each person named as director which is known as consent of proposed directors. Later an agreement and a statutory declaration is prepared stating the legal requirement for registration which is submitted to the registrar. Lastly along with all the documents a fees has to be paid for the registration of the company

CHAPTER 4PRIVATE, PUBLIC AND GLOBAL ENTERPRISE

SECTION - A1. Give examples for the following:

Departmental undertaking

Railways. Post and Telegraph

Statutory Corporations

Indian Airlines, IFCI

Government Company

HAL, BHEL, BEL etc.

Global enterprise

Hindustan Lever ltd, Sony Suzuki etc

Joint Venture Maruthi Suzuki,

Reliance Retail of India.

SECTION - B2. What is Department undertaking?

It is the oldest form of public enterprise. These are established as a department of the ministry, The government functions through the departments

3. What are statutory corporations?These are the public enterprise brought into existence by a Special Act in the Parliament. It defines the powers and rules governing its employees and its relationship with government departments.

4. What are government Companies?A government company means any company in which not less than 51% of the paid up capital is held by the central government or by the state government or partly by one or more state government.

5. What are global enterprise?Global enterprise are huge industrial organizations which extend their industrial and marketing operations a network of their branches in several countries.

6. Give the meaning of Joint Venture.A joint venture is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity and then they share in the revenues, expenses and control of the enterprise.

SECTION -C7. Explain the features of Departmental

undertaking? Formation: They are established as

departments of the ministry. Control: It is controlled by the

concerned ministry. Capital: The capital is provided by

the Government in the annual budget.

Income: The income of these department should be deposited daily to the Government Treasury.

Management: The employees of these organizations are government employees.

8. Explain the features of Statutory Corporations?

Formation: It is formed by the special Act of the Parliament or State Legislature.

Government Control: All these corporations are owned by the government .

Management: The day to day administration is taken care by the Board of Directors nominated by the Government.

Financial Autonomy: They have the autonomy to borrow funds from the public and others sources.

Staff: The employees of these corporations are not government employees. They have separate rules and regulations.

9. Explain the features of Government Companies?

Formation: It is formed by the Indian Companies Act of 1956.

Ownership: It is owned by the government. The capital contributed will be a major potion not less than 51% of the Share capital.

Separate Entity: They have a separate entity apart from the state government.

Government Audit: The government appoints the auditors to audit the accounts of these companies.

Financial Autonomy: They obtain funds from the Government share holdings and other private shareholders.

10. Explain the features of Global Enterprise?

Large Size: They operate in more than one country. They are big in size. Their annual sales turnover is more than the GNP of many small country.

Huge Capital Resources: These enterprises possess huge financial resources and has ability to raise funds from various sources.

Credibility: Because o f there financial strength banks and other investors always come forward to invest funds in them.

Foreign Collaboration: Global enterprise enter into agreements with Indian Companies pertaining to the sale of technology ,production of goods etc.

Advanced Technology: They are capable to confirm to international standards and quality specification. Computerisation and other inventories have come due to the technological advancement provided by MNC.

11. Explain the features of Joint Venture? Contributes Skill and Money: The

parties in joint venture need to contribute skills as well as money.

New Technology and Customers: It is usually formed to access to new technology to reach new customers.

Building on companies strength: Joint ventures are formed to build the companies strength.

Access to innovative managerial practice: It is formed to bring new technology and new ideas into the business.

Agreement: The association between the parties is regulated by a written agreement called a joint venture agreement.(JVA)

Business Services

One mark questions:

1. What is Business Services? The activities which facilitate commerce are called Business Services.2. State any two types of services Banking, Insurance, Postal, Telecom etc.

3. What is Banking? Accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or withdrawal by cheque, draft order or otherwise.4. What do you mean by E-Banking? E-Banking is electronic banking using electronic media.5. Name the Act regulating banking business in India. Banking Regulating Act of 1949.6. What is insurance? Insurance means through which a person shifts his risks to another.7. Who is an insurer and insured? The person who undertakes to compensate the risks is called insurer. The person whose risk is insured is called insured.8. Expand the following? MODA, NEFT, MIS, SCSS, ATM, IMO, EPS, EMO, MICR, VAST, RTGS, DTH, IFSC, PPF, KVP. NSC.MODA - Multiple Option Deposit Account.NEFT - National Electronic Fund TransferMIS - Monthly Income SchemeSCSS – Senior Citizen Savings SchemeATM – Automated Teller Machine.IMO – Instant Money OrderEPS- Express parcel serviceEMO – Electronic Money Order MICR – Magnet Ink Character RecognitionVAST – Very small Aperture TerminalRTGS – Real Time Gross settlementDTH – Direct to HomeIFSC – Indian Financial systemPPF – Public Provident FundKVP – Kisan Vikas PatraNSC – National saving Certificate

Two marks questions9. What is health insurance?

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured. 10. What is surrender policy?If the assured finds difficult to continue to pay the premium and keep the policy in force, he may surrender his policy to the insurer and give up his rights on policy.11. What is paid up policy? If the assured finds difficult to continue to pay the premium and keep the policy, he can convert his policy in to paid-up-policy. In this policy the sum assured becomes payable only after the expiry of fixed period or on the death of the insured. Five marks questions1. State the features of Saving A/c? a. Saving bank account is introduced by bank to mobilize small saving of middle and low income group peopleb. It enables the depositor to earn interest.c. There is no restriction on the number of deposits within a day.d. There may be restriction on number of withdrawals and the amount withdrawn in a day.e. Pay in slips is used for deposits and cheques and withdrawal-slips for withdrawals.2. Explain any five features of current account?a. The main objective of current account is to enable the businessmen to conduct the business smoothly.b. There is no restriction on number of deposits and withdrawals.c. It enables the account holder to obtain overdraft facility.d. A current account deposits are repayable on demand, bank doesn’t allow interest on these deposits.3. State the features of RD account. a. It encourages savings habit among people.b. The bank pays high rate of interest.c. The amount to be deposited at regular intervals.

d. The period of deposit is minimum six months and maximum is ten yearse. It can be opened with minimum deposits of `50 or `100. 4. State the features of FD account. (Any 2 point for 2marks) a. It enables people to earn higher rate of interest on their surplus funds.b. Amount will be deposited only once there is no need to follow up ever Transactions.c. Interest rates are usually higher than that of saving bank account.d. Bank shall issue certificate acknowledging the receipt of fixed deposit. Loan can be availed on such certificates.5. Explain the different types of bank accounts. (5 & 10 marks) a. Saving Account:Saving accounts are opened to encourage the people to save money and collect their savings.b. Current Account: It is opened by businessmen who have number of regular Transactions. Bank doesn’t pay any interest on current account.c. Recurring Deposit Account: In recurring deposit a fixed amount is invested every month for a specified period and the total amount will be repaid at the end of fixed period.d. Fixed deposit account:The account which is opened for a fixed period by depositing particular amount. Funds in fixed account cannot be withdrawn prior to maturity date.e. Multiple option deposit accounts. It is a combination of saving bank account or current account with term deposits. f. No frills account:This account can be opened without any initial deposit it is available in most of the bank branches and is open to any individualIncluding minors above the age of 10 years.g. Pigmi Deposit account:

Deposit money collector of a commercial bank will collect the money directly from the customers on daily or weekly basis. Note: any one type of account can be asked for 2 mark question6. Explain different types on banking services. a. Bank Draft It is a cheque where funds are taken directly from the bank rather than an individual’s account. b. Bankers cheque or pay orderIt is a payment instrument which is used by the banks to settle payment on behalf of their customers. It is like demand draft.c. RTGS It is a fund transfer system where transfer money takes place from bank to another bank on real time basis. I.e. transactions are done without wait of time.d. NEFTIn this system the settlement takes places with all transactions received till the particular cut-off time.e. Cash credit:A cash credit is a short-term cash loan to a company. The business that receives the loan can continuously draw from the bank up to a certain specified amount interest is charged at an agreed rate only on the amount overdrawn.f. Bank overdraft:An overdraft a financial accommodation under which a current account holder is permitted to overdraw his account up to an agreed limit. Interest is charged at an agreed rate only on the amount overdrawn.g. SMS Alerts It is a type of mobile banking service offered by banks permitting the account holder to operate selected banking services over their mobile phones using messaging services.h. MICRIt is a character recognition technology to facilitate processing and clearing of cheques .

I. IFSC. It is an eleven character code assigned by RBI to identify every bank branch uniquely that are participating in NEFT & RTGS system7. Briefly explain the services of E-Banking. a. Core Banking /Anywhere Banking A baking facility that allows the customers to operate his account from any of the branches of the bank at any place and at any time.b. EFTIt provides electronic payment and collection.c. Mobile Banking It helps the customer to access his account and conduct banking transactions and inquiries through mobile banking servicesd. Tele BankingThe account holder has to call the number giving the personal access code to complete the transaction by giving necessary instructions just by pressing few numbers on his telephone to get the information.e. ATM It is computerized communication devices that enable account holder of the bank to perform financial transactions without the need of human intervention.f. Debit cards & Credit cardsDebit card is a plastic card that provides the cardholder to withdraw and transfer money using ATM. Debit cards will be directly connected to the account of the holder.Credit cardsIt is a payment card. The bank will pay for purchase of goods or service on behalf of the account holder and later collects the same from account holder.7. What is Fire Insurance policy? State any four of its contentsIt is a contract by which the insurer agrees to indemnify the insured for the actual loss caused to him by the damage of the property that is insured by the fire.It contains the following detailsa. The name of the insured

b. The name of the insurerc. The description of the property insured e. The sum insuredf. The period of insuranceg. The amount of premiumh. The risks insured against8. What is Marine Insurance? State its types.It is a contract under which one party agrees to compensate the other against the losses arising from certain marine risks which are termed as perils of sea.Types of \marine insurancea. Hull insurance: if the subject matter of insurance is the shipb. Cargo insurance: If the subject matter of insurance is cargo.c. Freight insurance: If the subject matter of the insurance is freight.d. Liability insurance: If the subject matter of insurance is liability to compensate the loss to third party.9. Mention any five perils of sea. a. Sinking of the ship b. Burning of ship c. Jettison d. Collision of the ship e. Attack from enemies10. State any five financial services offered by postal department. a. SCSS This account may be opened by an individual who has attained the age of 60 years. Account holder gets high rate of interest b. PPF It is a scheme wherein the employer and employee contribute a percentage of salary to fund which will be utilized by the employee in his retirement period. c. KVP It is a saving scheme that doubles the money invested in certain term. Issued by Government of India through all post offices. d. NSC

It is also an investment option issued by Government of India.e. RD This ` of an account can be opened by any persons and even minors also. Deposit should be made every month.f. Saving bank account This account encourage the people to save money. In can be opened by any individually or jointly with minimum balance.g. Time deposits Time deposits in post office means fixed deposits in banks. 11. State any five allied services provided by postal department. a. Greeting post b. Media post c. Direct post d. International money e. Passport Facilities f. Speed post g. E-bill post h. Instant Money order I. Electronic money order J. Postal life insurance.12. State any five telecom services available for enhancing the business. a. Cellular mobile services b. Radio paging services. c. Fixed line service e. Cable services f. VSAT services g. DTH services

Ten marks question.13. Explain briefly the general principles of insurance.a. Utmost good faith The insured and the insurer are bound by a good faith bond of honesty and fairness material facts must be disclosed.

b. Insurable interest Insurance contract is valued only if the insured has an insurable interest on the object of life that is actually insured. It means monetary interest, i.e the insured should gain by the existence or safety and lose by the destruction of the subject matter of insurance.c. Principle of indemnity It is applied to all type of insurance contract except life insurance. According to the principle of indemnity the insured will be compensated for actual financial loss that is suffered by him.d. Principle of subrogation This principle is an extension of the principle of indemnity. As per this principle after the insured is compensated for the loss or damage to the property insured by him the right of ownership of such damaged property person to insurer. This principle is not applicable to life and other personal insurance.e. Double insurance or Principle of contribution Sometimes a person may get his goods Insured with more than one insurer. This is referred to as Double insurance. This principle is not applicable to life and other personal insurance.f. Principle of Mitigation of loss: In the event of some mishap to the insured property the insured must take all such steps to minimize the loss and act as though the property is uninsured i.e. he should not be careless for the reason that the property is insured.g. Causa proxima According to this principle when the loss is caused to the subject matter insured by a series or number of causes, the immediate or nearest Cause should be considered as the actual cause of loss, but not the remote cause. If such a cause is not insured against the insurer is exempted from indemnifying the insurer loss .