Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

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TN State Board 12th Commerce Model Question Paper 3 English Medium


  1. The question paper comprises of four parts.
  2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
  3. All questions of Part I, II. III and IV are to be attempted separately.
  4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each. These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer.
  5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about 50 words.
  6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in about 150 words.
  7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in about 250 words. Draw diagrams wherever necessary.

Time: 3 Hours
Max Marks: 90

Part – I

Choose the correct answer. Answer all the questions: [20 x 1 = 20]

Question 1.
Scientific management is developed by ……………….
(a) Fayol
(b) Taylor
(c) Mayo
(d) Jacob
(b) Taylor

Question 2
keeps Management Alert to Opportunities and Threats by Identifying Critical Problems.
(a) MBA
(b) MBE
(c) MBM
(d) MBO
(b) MBE

Question 3.
Primary market is a Market where securities are traded in the …………..
(a) First time
(b) second time
(c) Three time
(d) Several time
(a) First time

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 4.
There are stock exchange in the country.
(a) 21
(b) 24
(c) 20
(d) 25
(a) 21

Question 5.
Human Resource management is both and ……………
(a) science and art
(b) theory and practice
(c) history and geography
(d) none of the above
(a) science and art

Question 6.
A poor quality of selection will mean extra cost on ………… and supervision.
(a) training
(b) recruitment
(c) work quality
(d) none of these
(a) training

Question 7.
The marketer initially wants to know in the marketing is ………..
(a) qualification of the customers
(b) quality of the product
(c) background of the customers
(d) needs of the customers
(d) needs of the customers

Question 8.
Which is gateway to internet?
(a) portal
(b) CPU
(c) modem
(d) webnaire
(c) modem

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 9.
Sale of Goods Act was passed in the year?
(a) 1962
(b) 1972
(c) 1982
(d) 1985
(c) 1982

Question 10.
The chairman of the state consumer protection council is ……………
(a) Judge of a High Court
(b) Chief minister
(c) Finance minister
(d) None of the above
(a) Judge of a High Court

Question 11
………… means permitting the private sector to set up industries which were previously
reserved for public sector.
(a) Liberalisation
(b) privatisation
(c) Globalisation
(d) Public enterprise
(b) privatisation

Question 12.
Which of the below is not a good?
(a) stocks
(b) dividend due
(c) crops
(d) water
(b) dividend due

Question 13.
The transferee of a Negotiable Instrument is the one
(a) Who transfer the instrument
(b) On whose name it is transferred
(c) Who enchases it
(d) None of the above
(b) On whose name it is transferred

Question 14.
Entrepreneur is not classified as …………
(a) Risk bearer
(b) Innovator
(c) Employee
(d) Organizer
(b) Innovator

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 15.
Which of the following is the activity of a business entrepreneur?
(a) production
(b) marketing
(c) operation
(d) all of the above
(d) all of the above

Question 16.
…………… is designed to transform India to a global design and manufacturing hub.
(a) Digital India
(b) Make in India
(c) Startup India
(d) Design India
(b) Make in India

Question 17.
For which type of capital a company pays the prescribed fees at the time of registration?
(a) Subscribed capital
(b) Authorised capital
(c) Paid-up capital
(d) Issued capital
(b) Authorised capital

Question 18.
Which ………….. Director is appointed by a Financial institution?
(a) Nominee
(b) Additional
(c) Women
(d) Shadow
(a) Nominee

Question 19.
Which meeting will be held only once in the life time of the company?
(a) Statutory
(b) Annual general
(c) Extra ordinary
(d) Class general
(a) Statutory

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 20.
Distribution of work in groupwise or section-wise is called as
(a) co-ordinating
(b) controlling
(c) staffing
(d) organising
(d) organising

Part – II

Answer any seven in which question No. 30 is compulsory. [7 x 2 = 14]

Question 21.
Who is a manager?
A manager is a dynamic and life giving element in every business. Without efficient management it cannot be possible to secure the best allocation and utilisation of human, material and financial resources.

Question 22.
What is meant by Motivation?
The goals are achieved with the help of motivation. Motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers. This is done by a resourceful leader.

Question 23.
Write a note on financial market.
A financial market is an institution or arrangement that facilitates the exchange of financial instruments such as equity shares, preference shares, debentures, deposits and loans, corporate stocks and bonds, government bonds, and more exotic instruments such as options and futures contracts.

Question 24.
What is commercial bill market?
The Commercial Bill is an instrument drawn by a seller of goods on a buyer of goods. A bill of exchange issued by a commercial organization to raise money for short-term needs. These bills are of 30 days, 60 days and 90 days maturity.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 25.
Write any two objectives of SEBI.
The first objective of SEBI is to regulate, stock exchanges so that efficient services may be provided to all the parties operating there. Another objective is to supervise/check the activities of the brokers and other middlemen in order to control the capital market.

Question 26.
What is an interview?
According to Scott and others “an interview is a purpose full exchange of ideas, the answering of questions and communication between two or more persons.”

Question 27.
What is green marketing?
Green marketing involves developing and promoting products and services which satisfy customers’ wants and needs for quality, performance, affordable pricing and convenience – all without causing a detrimental impact on the environment.

Question 28.
Define Consumerism.
“Consumerism is an attempt to enhance the rights and powers by buyers in relation to sellers”.

Question 29.
What is internal environment?
Internal environment refers to those factors within an organisation e.g. Policies and programmes, organisational structure, employees, financial and physical resources.

Question 30.
Define Bill of Exchange.
According to section 5 of the Negotiable Instruments Act, “a bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument”.

Part – III

Answer any seven in which question No.40 is compulsory. [7 x 3 = 21]

Question 31.
Is management an Art or Science?
Management is neither a science nor an art, but a combination of both requiring people holding managerial positions to apply the scientific management principles and displaying popular managerial skills to accomplish the organizational goals as efficiently and as quickly as possible so as to be competitive in the globalised environment of business.

Question 32.
Give the meaning and definition of financial market.

  • Meaning: A market wherein financial instruments such as financial claims, assets and securities are traded is known as a ‘financial market’.
  • Definition: According to Brigham, Eugene F, “The place where people and organizations wanting to borrow money are brought together with those having surplus funds is called a financial market.”

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 33.
Explain Bull and Bear.
Speculators in a stock market are of different types based on animals behaviour. They are:

  • Bull: A Bull or Tejiwala is an operator who expects a rise in prices of securities in the future.He purchases the securities expecting price of rise in future.
  • Bear: A bear or Mandiwala speculator expects prices to fall in future and sells securities at present with a view to purchase them at lower price.

Question 34.
What is stress interview?
This type of interview is conducted to test the temperament and emotional balance of the candidate interviewed. Interviewer deliberately creates stressful situation and tries to assess the suitability of the candidate by observing his reaction and response to the stressful situations.

Question 35.
Explain the importance of social marketing.
The primary aim of social marketing is ‘social good’ such as anti-tobacco, anti-drug, anti¬pollution, anti-dowry, road safety, protection of girl child, against the use of plastic bags. Social marketing promotes the consumption of socially desirable products and develops health consciousness. It helps to eradicate social evils that affect the society and quality of life.

Question 36.
Is Consumer Protection necessary?
Consumer is supposed to be the king in the business. Consumer satisfaction is compulsorily necessary. Because the business depends upon the consumer. If there is no consumer, no need of production or sales. So the consumer is to be fully satisfied and respected in the market.

Question 37.
Discuss in detail about existing goods.
Existing goods are those owned or possessed by the seller at the time of contract of sale. Goods possessed even refer to sale by agents or by pledgers. Existing goods may be either:

  • Specific Goods
  • Ascertained Goods
  • Generic or Unascertained Goods

Question 38.
Explain the nature of a Negotiable Instrument.
A negotiable instrument is transferable from one person to another without any formality, such as affixing stamp, registration, etc. When the instrument is held by holder in due course in the process of negotiation, it is cured of all defects in the instrument with respect to ownership. Though a bill, a promissory note or a cheque represents a debt, the transferee is entitled to sue on the instrument in his own name in case of dishonour, without giving notice to the debtor that he has become its holder.

Question 39.
What is ‘Startup India’?
Through the Startup India initiative, Government of India promotes entrepreneurship by mentoring, nurturing and facilitating startups throughout their life cycle.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 40.
What do you mean by Statutory Meeting?
According to Companies Act, every public company, should hold a meeting of the shareholders within 6 months but not earlier than one month from the date of commencement of business of the company. This is the first general meeting of the public company, which is called the Statutory Meeting. This meeting is conducted only once in the lifetime of the company.

Part – IV

Answer all the following questions. [7 x 5 = 35]

Question 41.
(a) Describe the principles of scientific management.
Principles of scientific management propounded by Taylor are:

(i) Science, Not Rule of Thumb: Rule of Thumb means decisions taken by manager as per their personal judgments. According to Taylor, even a small production activity like loading iron sheets into box cars can be scientifically planned. This will help in saving time as well as human energy. Decisions should be based on scientific enquiry with cause and effect relationships.

(ii) Harmony, Not Discord: Taylor emphasized that there should be complete harmony between the workers and the management since if there is any conflict between the two,it will not be beneficial either for the workers or the management. Both the management and the workers should realize the importance of each other.

(iii) Mental Revolution: The technique of Mental Revolution involves a change in the attitude of workers and management towards each other. Both should realize the importance of each other and should work with full cooperation. Management as well as the workers should aim to increase the profits of the organisation.

(iv) Cooperation, Not Individualism: This principle is an extension of principle of Harmony, not discord’ and lays stress on mutual cooperation between workers and the management. Cooperation, mutual confidence, sense of goodwill should prevail among both, managers as well as workers. The intention is to replace internal competition with cooperation. Both ‘Management’ and ‘Workers’ should realize the importance of each other.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

(v) Development of each and every person to his or her greatest efficiency and prosperity: Efficiency of any organisation also depends on the skills and capabilities of its employees to a great extent. Thus, providing training to the workers was considered essential in order to learn the best method developed through the use of scientific approach.


(b) What are the advantages of MBE?
Management by exception provides the following advantages:

  •  It saves the time of managers because they deal only with exceptional matters. Routine problems are left to subordinates.
  • It focuses managerial attention on major problems. As a result, there is better utilisation of managerial talents and energy.
  • It facilitates delegation of authority. Top management concentrates on strategic decisions and operational decisions are left to the lower levels. There is increase in span of control. This leads to motivation and development of subordinates.
  • It is a technique of separating important information from unimportant one. It forces managers to review past history and study related business data for identifying deviations. There is better use of knowledge of trends, history and available business data.MBE keeps management alert to opportunities and threats by identifying critical problems. It can avoid uninformed and impulsive action.
  • Management by exception provides better yardsticks for judging results. It is helpful in objective performance appraisal.

Question 42(a).
Define Money Market and Capital Market. Explain the difference between the Money Market and Capital Market.

  • Money Market Definition: According to Crowther, “the money market is the collective name given to the various firms and institutions that deal in the various grades of near money.”
  • Capital Market Definition: According to Arun K. Datta, capital market may be defined as “a complex of institutions investment and practices with established links between the demand for and supply of different types of capital gains”.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 43.
Differences between the Money Market and Capital Market

S.No. Features Money Market Capital Market
1. Duration of Funds It is a market for short-term loanable funds for a period of not exceeding one year. It is a market for long-term funds exceeding period of one year.
2. Supply of Funds This market supplies funds for financing current business operations working capital requirements of industries and short period requirements of the government. This market supplies funds for financing the fixed capital requirements of trade and commerce as well as the long-term requirements of the government.
3. Deals with Instruments It deals with instruments like commercial bills (bill of exchange, treasury bill, commercial papers etc.). It deals with instruments like shares, debentures,
Government bonds, etc.,
4. Money Value Each single money market instrument is of large amount. A treasury bill is of minimum for one lakh. Each certificate of deposits or commercial paper is for minimum of Rs 25 lakh. Each single capital market instrument is of small amount. Each share value is Rs 10. Each debenture value is Rs 100.
5. Role of Major Institution The central bank and commercial banks are the major institutions in the money market. Development banks and Insurance companies play a dominant role in the capital market.


(b) Describe the significance of Human Resource Management.
The role of human resource management is the process of acquiring, training, appraising, and compensating employees. The significance of human resource management is given below:

(i) To identify manpower needs: Determination of manpower needs in an organisation is very important as it is a form of investment.

(ii) To ensure the correct requirement of manpower: At any time the organisation should not suffer from shortage or surplus manpower which is made possible through human resource management.

(iii) To select right man for right job: Human resource management ensures the right talent to select the right employee for the right job.

(iv) To update the skill and knowledge: Human resource management enables employees to remain up-to-date through training and development programmes.

(v) To appraise the performance of employees: Periodical appraisal of performance of employees through human resource management activities boosts up good performers and motivates slow performers.

Question 43.
(a) Define training. Discuss various types of training.
According to Edwin B. Flippo “Training is the act of increasing the Knowledge and skills of an employee for doing particular jobs”. Training may be mainly divided into

  • On the job training
  • Off the job training

On the Job Training: On the job training refers to the training which is given to the employee at the workplace. The following are the on the job training methods.

  • Coaching Method: In this method of training, the superior teaches or guides the new employee about the knowledge and skills.
  • Mentoring Method: Mentoring is the process of sharing knowledge and experience of an employee.
  • Internship Training Method: A superior gives training to a subordinates or understudy like an assistant to a manager.

(b) Off the Job Training: It is the training method wherein the workers leam the job role away from the actual work place. The following are types of off the job training:

  • Lecture Method: Under this method trainees are educated about concepts, theories, principles in any particular area.
  • E-learning Method: E-leaming is the use of technological process to access of a traditional classroom or office.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium


(b) What are the needs for consumer protection?
Consumer is to be protected from the cheating business people. Though the consumer is said to be the king, his interests are neglected. Consumer protection is applicable to public sector, financial and co-operative enterprises. Recently even medical services have been brought under consumer movement. Satisfaction and wellbeing of the consumer should be the main objective of business. But in real practice consumer is not protected and safeguarded. Thus there is a need for consumer protection or movement.

Question 44(a).
Describe the economic and socio-cultural environment of business.
Economic Environment: The multiple variables in the. macro environment system which has a bearing on a business include:

  • The nature of economy is based on the stage of development. The countries across the globe can be categorised on the basis of growth and per capita income as developed nations, developing nations and under developed nations.
  • The economic systems can be classified as Capitalistic, Socialistic and Mixed economy.
  • The economic policies of a nation are: Monetary policy, Fiscal policy, Industrial policy, Foreign exchange policy and Export-import policy.

Socio-Cultural environment: Social environment refers to the sum total of factors of the society in which the business is located. It is dynamic and includes the behaviour of individuals, the role and importance of family, customs, religion and languages, the ethical values.

b. Distinguish between sale and agreement to sell.

Basis for Comparison Sale Agreement to Sell
1. Ownership The property (ownership or title) in the goods passes from the seller to the buyer immediately. The property (ownership or title) in the goods has to pass at a future time or after the fulfilment of certain conditions.
2. Risk of Loss Where the goods sold under the contract of sale are destroyed, the loss falls fully on the buyer as the ownership has already passed. Where the goods under the agreement to sell are destroyed, the loss falls fully on the seller as the ownership is still vested with seller.
3. Consequences of violating the contract Where the buyer fails to pay the price, the seller cannot seize the goods. Where the buyer violates the contract, the seller can repossess the goods from the former.
4. Nature of contract It is an executed contract. It is an executory contract, i.e., contract yet to be performed.
5. Insolvency of the Buyer In a sale, if a buyer becomes insolvent before he pays for the goods even though the goods sold are under the possession of the seller, the latter has to return them to the Official Receiver. If the buyer becomes insolvent before the payment of the price, the seller can retain the goods if they are under his possession.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 45.
(a) Distinguish a cheque and a bill of exchange.

SI. No. Basic of Difference Bill of Exchange Cheque
1. Drawn A bill of exchange can be drawn on any person including a banker. A cheque can be drawn only on a particular banker.
2. Payability It is payable on demand or on the expiry of a certain period. It is payable on demand only.
3. Acceptance In case of time bill, acceptance by the drawee is necessary before he can be made liable on it. A cheque does not require any acceptance.
4. Grace period Three days of grace are allowed while calculating the maturity date in the case of time bill. No days of grace are allowed in the case of a cheque for the simple reason that is always. payable on demand.
5. Notice When a bill is dishonoured, notice of dishonour is necessary. Notice is not necessary for a cheque.
6. Discounting A bill can be discounted with a bank. A cheque cannot be discounted.
7. Crossing A bill cannot be crossed. A cheque can be crossed either generally or specially so as to ensure payment to the rightful owner.

(b) What are the characteristics of an entrepreneur?
Characteristics of an Entrepreneur:
(i) Spirit of Enterprise: Entrepreneur should be bold enough to encounter risk arising from the venture undertaken.

(ii) Self-confidence: Entrepreneur should have self-confidence in order to achieve high goals ‘ in the business.

(iii) Flexibility: Entrepreneur should not doggedly stick to decisions in a rigid fashion.

(iv) Innovation: Entrepreneur should contribute something new or something unique to meet the changing requirements of customers namely new product, new method of production or distribution, adding new features to the existing product, uncovering a new territory for business, innovating new raw material, etc.

(v) Resource Mobilisation: Entrepreneur should have the capability to mobilise both tangible inputs like manpower, money materials, technology, market, method etc., which are scattered over a wide area and certain intangible inputs like motivation, morale and innovativeness.

Question 46.
(a) Discuss the nature of functional entrepreneurs.
Nature of functional entrepreneurs:

  • Innovative Entrepreneur: He is a person who introduces new project. They observe the environment regarding information to the new venture.
  • Imitative Entrepreneur: He refers to the person who simply imitates existing knowledge or technology already in advance countries. Redesigning of products suited to the local conditions.
  • Fabian Entrepreneur: These are said to be conservatives and sceptical about any changes in their organisation. They are of risk-averse.
  • Drone Entrepreneur: Drone entrepreneurs are those who are totally opposed to changes in the environment. They used to operate in the niche market.

(b) Brief different stages in Formation of a Company.
Section 3(1) of the Act states that a company may be formed for any lawful purpose by – (a) seven or more persons, where the company to be formed is to be a public company;
(b) two or more persons, where the company to be formed is to be a private company; or
(c) one person, where the company to be formed is to be One Person Company.

The process of formation of company consists of different stages:

1. Promotion: Promotion stage begins when the idea to form a company comes in the mind of a person.

2. Registration: The second stage in the formation of the company is incorporation or registration. In this stage, the promoter has to fix name of the company, prepare the necessary documents (Memorandum and Articles of Association), fix the registered
office, and name of the directors. After this, certificate of incorporation is issued.

3. Capital Subscription: A public limited company having its share capital has to pass through two stages. One of them is capital subscription.

The steps for this is:

  • Formalities for raising capital.00 Issuing prospectus
  • Appointing official banker
  • Pass resolution to make allotment

4. Commencement of Business: As per section 11 of the Act, a company having share capital should file with the Registrar, declaration stating that

  • Every subscriber has paid the value of shares.
  • Paid-up capital is not less than Rs.5 lakhs for a public limited company and Rs.l lakh in case of a private limited company.
  • It has filed the Registrar, regarding the verification of registered office.
    After fulfilling these details, the Registrar will issue certificate of commencement of business.

Tamil Nadu 12th Commerce Model Question Paper 3 English Medium

Question 47.
(a) Explain composition of the board of directors.
Composition of the Board off Directors:
(i) General Optimum Combination: Board of Directors shall have an optimum combination of executive and non-executive directors with at least one woman director.

(ii) When the non-executive Director is the Chairperson: In this case, at least one-third of the board of directors shall comprise of independent directors.

(iii) When the non-executive chairperson is a promoter or is related to any promoter or person occupying management positions at the level of board of director or at one level below the Board of Directors: In this case, at least one half of the board of directors of the company shall consist of Independent Directors.


(b) Briefly state different types of company meetings.
A Company can convene meetings to discuss the performance of the company and also to take decisions. Under the companies Act 2013, company meetings may be classified as follows:

(i) Meetings of Shareholders: The meeting held for the shareholders of the company is shareholders meeting. This may be divided as follows:

  • Statutory Meeting: Every public company should hold a meeting of the shareholders within 6 months but not earlier than one month from the commencement of the business.
  • Annual General Meeting: Every year a meeting is held to transact the ordinary business of the company. It is called annual general meeting.
  • Extra-Ordinary General Meeting: If any meeting conducted in between two annual general meetings to deal with some urgent or special or extraordinary nature of business is called as extra-ordinary general meeting.

(ii) Meeting of the Board of Directors: To decide policy matters of the company, the board of directors meet frequently, which is known as meeting of the board of directors.

  • Board Meetings: Meetings of the directors are called board meetings. It may be convened to discuss the business and take formal decisions.
  • Committee Meetings: Every listed company and every other public company having a capital of? 10 crore is required to have audit committee. The meeting held by this committee is known as committee meetings.

(iii) Special Meeting:

  • Class Meeting: Meetings held by a particular class of share or debenture holders is known as Special or Class meeting, e.g. preference shareholders or debenture holders meeting.
  • Meetings of the Creditors: These are not meetings of a company. Meetings held with the creditors to discuss any crisis about the financial matters.

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