Tamil Nadu 12th Commerce Model Question Paper 4 English Medium

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TN State Board 12th Commerce Model Question Paper 4 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.
……………. system gives full scope to the Individual strength and Responsibility.
(a) MBO
(b) MBE
(c) MBM
(d) MBA
(a) MBO

Question 2.
Capital market do not provide ……………..
(a) Short term funds
(b) Debenture funds
(c) Equity funds
(d) Long term funds
(a) Short term funds

Question 3.
……………….. is the oldest stock exchange in the world.
a) London stock exchange
(b) Bombay stock exchange
(c) National stock exchange
(d) Amsterdam Stock Exchange
(b) Bombay stock exchange

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 4.
Human resource is a ……………. asset.
(a) Tangible
(b) Intangible
(c) Fixed
(d) Current
(b) Intangible

Question 5.
Off the Job training is given ………….
(a) In the class room
(b) On off days
(c) Outside the factory
(d) In the playground
(c) Outside the factory

Question 6.
…………………….. is the result of New Industrial Policy which abolished the ‘License system’.
(a) Globalisation
(b) Privatisation
(c) Liberalization
(d) None of these
(c) Liberalization

Question 7.
The initiative was launched to modernize the Indian economy to make all government services available electronically.
(a) Stand up India
(b) Start up India
(c) Digital India
(d) Make in India
(c) Digital India

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 8.
A person shall hold office as a director …………….. in companies as per the Companies Act, 2013.
(a) 5
(b) 10
(c) 20
(d) 15
(c) 20

Question 9.
Management is an …………….
(a) Art
(b) Science
(c) Art and science
(d) Art or science
(c) Art and science

Question 10.
Which of the following is not a main function?
(a) Decision – making
(b) Planning
(c) Organising
(d) Staffing
(a) Decision – making

Question 11.
Which is the first step in process of MBO?
(a) Fixing key result area
(b) Appraisal of activities
(c) Matching resources with activities
(d) Defining organizational objectives
(d) Defining organizational objectives

Question 12.
Capital market is a market for ……………
(a) Short term finance
(b) Medium term finance
(c) Long term finance
(d) Both short term and medium term finance
(c) Long term finance

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 13.
When the NSEI was established …………..
(a) 1990
(b) 1992
(c) 1998
(d) 1997
(b) 1992

Question 14.
The headquarters of SEBI is
(a) Calcutta
(b) Bombay
(c) Chennai
(d) Delhi
(b) Bombay

Question 15.
Who is supreme in the market?
(a) Customer
(b) Seller
(c) Wholesaler
(d) Retailer
(a) Customer

Question 16.
Who is the father of Consumer Movement?
(a) Mahatma Gandhi
(b) Mr. John F. Kennedy
(c) Ralph Nader
(d) Jawaharlal Nehru
(c) Ralph Nader

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 17.
Which of the below constitutes the essential element of contract of sale?
(a) Two parties
(b) Transfer of property
(c) Price
(d) All of the above
(d) All of the above

Question 18.
Negotiable Instrument is freely transferable by delivery if it is a …………. instrument.
(a) order
(b) bearer
(c) Both A & B
(d) None of the above
(b) bearer

Question 19.
How does a person who envisages the idea to form a company called…………. ?
(a) Director
(b) Company secretary
(c) Registrar
(d) Promoter
(d) Promoter

Question 20.
Who can become a secretary for a company?
(a) Individual person
(b) Partnership firm
(c) Co-operative societies
(d) Trade unions
(a) Individual person

Part – II

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

Question 21.
List out the management tools.
Tools of management have been developed such as, accounting, business law, psychology, statistics, econometrics, data processing, etc.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 22.
Define – MBO
MBO is popularised in the USA by George Odiome. According to him, “MBO is a system wherein the superior and the sub-ordinate managers of an organisation jointly identify its common goals, define each individual’s major area of responsibility in terms of the result expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members”.

Question 23.
What are the components of organized sectors?

  • Regulators
  • Financial Institutions
  • Financial Markets
  • Financial Services

Question 24.
Define the term “Money Market”.
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”.

Question 25.
What is meant by Stock Exchange?
Stock Exchange is an organized market for the purchase and sale of industrial and financial security, ft is also called stock market or share market.

Question 26.
What is Market?
The word market is derived from the Latin word ‘Marcatus’ which means trade, commerce, merchandise, a place where business is transacted.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 27.
Who is a consumer?
A consumer is one who consumes goods manufactured and sold by others or created (air, water, natural resources) by nature and sold by others.

Question 28.
Define Business environment.
According to Bayard O Wheeler, Business environment is “The total of all things external to firms and industries which affect their organisation and operations”.

Question 29.
Mention any two features of entrepreneurs.
Features of Entrepreneurs:

  • Spirit of Enterprise: Entrepreneur should be bold enough to encounter risk arising from the venture undertaken.
  • Self Confidence: Entrepreneur should have a self confidence in order to achieve high goals in the business.

Question 30.
Who is called as Promoters?
Promotion stage begins when the idea to form a company comes in the mind of a person. The person who envisage the idea is called a ‘promoter’.

Part – III

Answer any seven in which question No. 31 is compulsory. (7 x 3 = 21]

Question 31.
Define the term management.
“To manage is to forecast, to plan, to organise, to command, to co-ordinate and to control.” -Henry Fayol. It attempts to describe management in terms of what a manager does, and not what management is.

Question 32.
Write the features of MBO.

  • An attempt is made by the management to integrate the goals of an organisation and individuals. This will lead to effective management.
  • MBO tries to combine the long run goals of organisation with short run goals.
  • Management tries to relate the organisation goals with society goals.

Question 33.
What are the limitations of Stock exchange?

  • Lack of uniformity and control of stock exchanges.
  • Absence of restriction on the membership of stock exchanges.
  • Failure to control unhealthy speculation.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 34.
Define the term Recruitment.
According to Edwin B. Flippo, “It is a process of searching for prospective employees and stimulating and encouraging them to apply for jobs in an organisation.”

Question 35.
What are the objectives of marketing?
Baker and Anshen say,“The end of all the marketing activities is the satisfaction of human wants”.The following are the objectives of marketing:

  • Intelligent and capable application of modem marketing policies.
  • To develop the marketing field.
  • To develop guiding policies and their implementation for a good result.

Question 36.
What is B2B and B2C type of E-Commerce?
B2B is an online business model that facilitates online sales transactions between two businesses. E-tailing is a business to consumer (B2C) transaction model. E-tailing is also called online retailing.

Question 37.
Explain the natural environment of business.
Geo-physical environment – The natural, geographical and ecological factors have a bearing on the business. These are as follows:

  • The availability of natural resources like minerals oil .etc, since setting up of industries requires availability of raw materials.
  • The weather and climatic conditions and availability of water and other natural resources is essential for the agricultural sector.
  • Topographical factors like the terrain impacts type of business since the demand and consumption pattern may vary in these regions.
  • Location of certain industries is influenced by the geographical conditions.
  • Availability of natural harbours and port facilities for transporting goods.

Question 38.
Explain the meaning of Agreement to sell.
The property (ownership or title) in the goods has to pass at a future time or after the fulfilment of certain conditions specified in the contract.

Question 39.
What is political environment?
To commence business, various factors are needed. Apart from all other factors, political environment is also essential. It means that the concessions, incentives provided by the government drive them to enter into venture. The government also provides support in the form of loans, subsidies and other taxes.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 40.
What is Special Resolution?
A special resolution is the one which is passed by not less than 75% of majority. The number of votes, cast in favour of the resolution should be three times the number of votes cast against it.

Part – IV

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

Question 41(a).
Explain the features of Stock Exchange. (Any 5)
There are various features of a stock exchange. They are given below:

  • Market for Securities: Stock exchange is a market, where securities of corporate bodies, government companies are bought and sold.
  • Deals in Second Hand Securities: It deals with shares, debentures bonds and securities already issued by the companies.
  • Regulates Trade in Securities: Stock exchange does not buy or sell any securities on its own account. It regulates the trade activities so as to ensure free and fair trade.
  • Allows Dealings only in Listed Securities: In the stock exchange only listed securities are purchased and sold. Unlisted securities cannot be traded in the stock exchange.
  • Association of Persons: A stock exchange is an association of persons or- body of individuals which may be registered or unregistered.


(A) Explain the different methods of recruitment.
Recruitment means selecting the right person for the right job. There are basically two ways by which an organisation can recruit its employees – Internal and External sources. External sources can further be classified into Direct and Indirect sources.
Internal Sources – Transfer, Upgrading, Promotion, Demotion, Recommendation by existing Employees, Job rotation, Retired employees, Dependants, Previous applicants, Acquisitions and Mergers.

External Sources:

  • Direct – Advertisements, Unsolicited applicants, Walk-ins, Campus Recruitment, Recruitment at Factory gate, Rival firms, e-Recruitment.
  • Indirect – Employee referral, Govemment/Public Employment Exchanges, Employment Agencies, Employment Consultancies, Professional Associations, Deputation, Word of mouth, Labour Contractors, Job Portals, Outsourcing, Poaching.

Question 42(a).
Explain the management process in detail.
The substance of management should be identified as a process. A process is something that what a person does in the context of his individual duties and responsibilities assigned by his or her immediate higher authority.
There are twin purposes of the management process:

  • Maximum productivity or profitability
  • Maximum human welfare and satisfaction.

There are five parts of management as a process:

  • Co-ordination of resources: The manager of an enterprise must effectively coordinate all activities and resources of the organisation, namely, men, machines, materials and money, the four M’s of management.
  • Management is a Process: The manager achieves proper coordination of resources by means of the managerial functions of planning, organising, staffing, directing (or leading and motivating) and controlling.
  • Management is a Purposive Process: It is directed toward the achievement of predetermined goals or objectives. Without an objective, we have no destination to reach or a path to follow to arrive at our destination, i.e. a goal, both management and organisation must be purposive or goal-oriented.
  • Management is a Social Process: It is the art of getting things done through other people.
  • Management is a Cyclical Process: It represents planning-action-control-replanning cycle, i.e., an ongoing process to attain the planned goals.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium


(b) Distinguish between new issue market and secondary market.

Basis For Comparison New Issue Market Secondary Market
Meaning The market place for new shares is called primary market.(Initial Issues Market) The place where formerly issued securities are traded is known as Secondary Market. (Resale Market)
Buying Direct Indirect
Financing It supplies funds to budding enterprises and also to existing companies for expansion and diversification. It does not provide funding to companies.
How can securities be sold? Only once Multiple times
Buying and Selling between Company and Investors Investors
Gained person Company Investors
Intermediary Underwriters Brokers
Price Fixed price Fluctuates, depends on the demand and supply force.
Not rooted to any specific spot or geographical location. It has physical existence.

Question 43(a).
Discuss about the evolution of marketing.
Marketing is one of the business functions. The development of marketing is evolutionary rather than revolutionary.
Evolution of Marketing:

  • Barter System: The goods are exchanged against goods, without money.
  • Production Orientation: This was a stage where producers, instead of being concerned with the consumer preferences, concentrated on the mass production of goods.
  • Sales Orientation: The selling became the dominant factor, without any efforts for the satisfaction of the consumer needs.
  • Marketing Orientation: Customers’ importance was realised but only as a means of disposing of goods produced.
  • Consumer Orientation: Under this stage only such products are brought forward to the markets which are capable of satisfying the tastes and preferences of consumers.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium


(b) Explain advantages and disadvantages of E-tailing.
E-tailing or electronic retailing refers to selling of goods and services through a shopping website:

  • Customer can buy the product at anytime from anywhere.
  • Direct contact of end consumer by the manufacturer cuts down the cost.
  • Customer can buy whatever they want by browsing the various sites.


  • E-tailing needs a strong advertisement and for which it has to spend large amount.
  • It is not suitable for small size business.

Question 44(a).
What are the rights of consumers?
As a consumer, everyone should know the basic rights as well as about the counts and procedures to be followed.
The rights of consumers as per Consumer Protection Act are given below:
(1) Right to Protection of Health and Right of Safety: There may be products that cause physical danger to consumers’ health, lives and property. The health hazards which are likely to arise have to be eradicated or reduced altogether.

(ii) Right to be Informed: Consumers should be given all the relevant facts about the products. The manufacturer and the dealer should disclose all the material facts relating to the product.

(iii) Right to choose: Consumer satisfaction can be increased by giving the consumer the widest choice. From the widest range of products in quality and brand as well as price, the consumer can choose the goods.

(iv) Right to be Heard: Consumers have every right to ventilate and register the dissatisfaction, disagreements and get the complaint heard and aired.

(v) Right to Seek Redressal: The aggrieved party is to be granted compensation within a reasonable time.

(vi) Right to Consumer Education: The consumer has a right to acquire knowledge and stay well-informed all through his life.


(b) Explain the advantages and disadvantages of liberalization.
Liberalization means relaxation of various government restrictions in the areas of social and economic policies of the country.
Advantages of Liberalization:

  • Increase in foreign investment: If a country liberalizes its trade, it will make the country more attractive for inward investment.
  • Increase the foreign exchange reserve: Relaxation in the regulations covering foreign investment and foreign exchange has paved way for easy access to foreign capital.
  • Increase in consumption: Liberalization increases the number of goods available for consumption within a country

Disadvantages of Liberalization:

  • Increase in unemployment: Due to liberalization some industries grow, some decline. Therefore, there may be unemployment from certain industries closing.
  • Increased dependence on foreign nations: Trade liberalization means firms will face greater competition from abroad.
  • Unbalanced development: Trade liberalization may be damaging for developing economies which cannot compete against free trade.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

Question 45(a).
Mention the presumptions of Negotiable Instruments.
Presumptions of Negotiable Instrument:

  • Every negotiable instrument is presumed to have been drawn and accepted for consideration.
  • Every negotiable instrument bearing, a date is presumed to have been made or drawn on such a date.
  • It is presumed to have been accepted within a reasonable time after the date and before its maturity.
  • The transfer of a negotiable instrument is presumed to have been made before maturity,
  • When a negotiable instrument has been lost, it is presumed to have been duly stamped
  • The holder of a negotiable instrument is presumed to be a holder in due course.

(b) Explain in detail on classification according to the type of business.
Classification of Entrepreneur according to the type of business:

  • Business Entrepreneur: He is called solo entrepreneur. He is the one who finds out an idea for a new product or service and establish a business enterprise.
  • Trading Entrepreneur: Trading entrepreneurs are those who restrict themselves to buying and selling finished goods.
  • Industrial Entrepreneur: These are entrepreneurs who manufacture products to cater to the needs of the consumers.
  • Corporate Entrepreneur: He is called as promoter. He takes initiative necessary to start an entity under corporate format.
  • Agricultural Entrepreneur: These entrepreneurs are those who raise farm products and market them.

Question 46(a).
Explain any five Government Entrepreneurial schemes.
To support and strengthen the Start-up culture in India, the Government has launched various schemes. They are as follows:
(i) The Modified Special Incentive Package Scheme (M-SIPS): The M-SIPS scheme provides capital subsidy of 20% in SEZ and 25% subsidy in non-SEZ for business units engaged in manufacturing of electronic goods.

(ii) New Gen Innovation and Entrepreneurship Development Centre (New Gen IEDC):
It provides a limited one time non-recurring financial assistance to entrepreneurship up to Rs.25 lakhs in the fields of chemicals, technology, health care, defence, etc.

(iii) Dairy Entrepreneurship Development Scheme: Dairy Entrepreneurship Development Scheme aims at helping entrepreneurs in the fields of agriculture, pets and animals and dairy farms.

Tamil Nadu 12th Commerce Model Question Paper 2 English Medium

(iv) Single Point Registration Scheme: A great scheme for micro and small enterprises which provides an exemption from payment of Earnest Money Deposit.

(v) Atal Incubation Centres (AIC): The Government of India has set up the Atal Innovation Mission (AIM) at NITI Aayog in 2016 with the overarching purpose of promoting a culture of innovation and entrepreneurship in the country.

(b) Who are the KMP?
Companies Act, 2013 has introduced many new concepts and Key Managerial Personnel (KMP) is one of them. KMP covers the traditional roles of managing director and whole time director and also includes some functional heads.

Key Managerial Personnel: The definition of the term Key Managerial Personnel is contained in Section 2(51) of the Companies Act, 2013. This Section states:

  • The Chief Executive Officer
  • The Managing Director or Manager
  • The Company Secretary
  • The Whole-time Director
  • The Chief Financial Officer
  • Such other officer as may be prescribed

Question 47(a).
Discuss the liabilities of Company Secretary.
As an officer, a company secretary has extensive duties and liabilities. The success of the company depends upon his efficient functions and capacity to perform.

  • It is duty of the secretary to arrange for Board meetings and shareholders annual general meeting.
  • The secretary controls and supervises the day-to-day activities of the company.
  • Also he should prepare details for issue of allotment letters, share certificates and dividend warrants.
  • To arrange for filing statement in lieu of prospectus.
  • The secretary should send notice of general meeting to every member of the company.
  • Being a principal officer, a company secretary can sign contracts and proceedings of company meetings.
  • He is liable to maintain share registers and register of directors and contracts.
  • To prepare minutes of every general meeting and Board meetings within 30 days.

(b) Explain the role of business in consumer protection.
Business enterprises should do the following towards protecting consumers.

  • Avoidance of Price Hike: Business enterprises should desist from hiking the price in the context of acute shortage of goods.
  • Avoidance of Hoarding: Business enterprises should not indulge in hoarding and black marketing to earn maximum profit.
  • Guarantees for Good Quality: Business enterprises should not give false warranty for the products.
  • Product Information: Business enterprises should disclose correct, complete and accurate information about the product viz. size, quality, quantity, weight etc.
  • Truth in advertising: Business enterprises should not convey false, untrue, bogus information relating to the product through the advertisement.
  • Money Refund Guarantee: Where the product becomes defective, business enterprises should replace it with new one or refund the purchase price.

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