ICSE Board EXAMINATION - 2023

COMMERCIAL STUDIES
Solved Paper
Class-10th
Maximum Marks: 80
Time allowed: Three 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
Choose the correct answer to the questions from the given options.  [16]
(Do not copy the questions, write the correct answers only.)
(i) Heavy expenditure on advertisement is classified as:
(a) Revenue Expenditure (b) Capital Expenditure
(c) Deferred Revenue Expenditure (d) Miscellaneous Expenditure
(ii) _____________ expect the business organization to follow the laws and regulations of the country.
(a) Suppliers (b) Government
(c) Associates (d) Owners
(iii) Adulteration means cheating a consumer by:
(a) Giving less quantity of a product
(b) Charging unreasonably high prices
(c) Mixing of harmful substances in the product
(d) Keeping away information from the consumers
(iv) _______is an example of Capital Expenditure.
(a) Land and building (b) Rent
(c) Repairs and maintenance (d) Interest on loan
(v) The budget that forms the fundamental basis of all budgets and lays down the ____________ revenue goals of
an enterprise is the:
(a) Purchase Budget (b) Sales Budget
(c) Cash Budget (d) Production Budget
(vi) ______________ is the process of carefully screening the candidates to choose the most suitable persons for the
job.
(a) Recruitment (b) Selection
(c) Training (d) Development
(vii) The fastest mode of transport for light weight goods of high value is:
(a) Airways (b) Waterways
(c) Railways (d) Roadways
(viii) Commercial transactions in which an order is placed electronically is:
(a) NEFT (b) E-Commerce
(c) RTGS (d) Retailing
(ix) Internal stakeholders do NOT consist of:
(a) Suppliers (b) Employers
(c) Employees (d) Shareholders
2 Oswaal ICSE Question Bank Chapterwise & Topicwise, COMMERCIAL STUDIES, Class-X

(x) The consumer’s right to be protected against the marketing of goods which are hazardous to life and property
is _____________ .
(a) Right to safety (b) Right to seek redressal
(c) Right to be heard (d) Right to be informed
(xi) Rent received by a business firm is an example of:
(a) Revenue receipt (b) Capital receipt
(c) Capital expenditure (d) Deferred revenue expenditure
(xii) Any tangible material offered for sale and which can be replaced is a __________ .
(a) Price wars (b) Service
(c) Product (d) Sales
(xiii) Two popular mobile wallets are:
(a) Swiggy and Zomato (b) Instagram and Snapchat
(c) Google Pay and Paytm (d) RTGS and NEFT
(xiv) The insurer is liable for insured perils only and not for unexpected uninsured ones. This is the principle of:
(a) Indemnity (b) Utmost good faith
(c) Subrogation (d) Causa Proxima
(xv) The Chief of the Reserve Bank of India is called:
(a) The Governor (b) The Chairman
(c) The Finance Secretary (d) The President
(xvi) Warehouses licensed by the government and established specifically for storage of dutiable goods are called:
(a) Private warehouses (b) Bonded warehouses
(c) Public warehouses (d) Cold storages
Question 2
Write any two differences between:
(i) Central Bank and Commercial Bank [2]
(ii) Advertising and Sales promotion  [2]
(iii) Capital and Revenue Receipts  [2]
(iv) Debit card and Credit card  [2]
Question 3
(i) What is Social Advertising Media?  [2]
(ii) What is Recruitment?  [2]
(iii) What is a Budget?  [2]
(iv) Mention any two expectations of Employees.  [2]
Question 4
(i) What is an Overdraft?  [2]
(ii) What is Pricing?  [2]
(iii) Define Fixed Costs with an example.  [2]
(iv) Briefly explain Health Insurance.  [2]
SECTION B — 40 MARKS
(Attempt any four questions from this Section.)
Question 5
(i) Mention two merits and three demerits of Road Transport.  [5]
(ii) Write short notes on:  [5]
(a) Debentures
(b) False Accounting Fraud
Question 6
(i) Describe any two functions of the Central Bank.  [5]
(ii) Explain the following Consumer Rights:  [5]
(a) Right to be Informed
(b) Right to Seek Redressal
Question 7
(i) Explain any two modules of Enterprise Resource Planning.  [5]
(ii) Explain the importance of Warehousing. (Any five points)  [5]
 SOLVED PAPER - 2023 3
Question 8
(i) Explain the two methods of Training. Give an example for each.  [5]
(ii) Mention five points of distinction between a Product and a Service.  [5]
Question 9
(i) Describe the two sources of Internal Recruitment.  [5]
(ii) Write short notes on:  [5]
(a) IMPS (b) Direct Costs
Question 10
Prepare a Trading, Profit and Loss Account of XYZ, for the year ending on 31st March, 2022 and a Balance Sheet as
on 31st March, 2022.  [10]
Amount Amount
Particulars
(Dr.) ` (Cr.) `
Capital 1,00,000
Furniture 20,000
Purchases 1,50,000
Debtors 2,00,000
Interest Received 4,000
Salaries 30,000
Sales 3.21,000
Purchase Returns 5,000
Wages 20,000
Rent 15,000
Sales Return 10,000
Carriage outwards 7,000
Creditors 1,26,000
Printing and Stationery 8,000
Insurance 12,000
Opening Stock 50,000
Office Expenses 12,000
Bank Overdraft 2,000
Drawing 24,000
Total 5,58,000 5,58,000
st
Closing Stock was valued at `.60,000 on 31 March, 2022.

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 ANSWERS
SECTION A while credit card transactions involve repayment of
Ans. 1. (i) Option (c) is correct. the borrowed amount in future along with interest.
(ii) Option (b) is correct. Ans. 3.
(iii) Option (c) is correct. (i) Social Advertising Media refers to the use of
(iv) Option (a) is correct. social media platforms such as Facebook, Twitter,
(v) Option (b) is correct. Instagram, LinkedIn, etc., for advertising and
promoting products or services. It allows businesses
(vi) Option (b) is correct.
to target specific audiences, engage with customers,
(vii) Option (a) is correct.
and build brand awareness.
(viii) Option (b) is correct.
(ii) Recruitment is the process of identifying and
(ix) Option (a) is correct.
attracting potential candidates for a job vacancy
(x) Option (a) is correct.
in an organization. It involves sourcing, screening,
(xi) Option (a) is correct. interviewing, and selecting the most suitable
(xii) Option (c) is correct. candidate for the job.
(xiii) Option (c) is correct. (iii) A budget is a financial plan that outlines the
(xiv) Option (a) is correct. expected income and expenses of an individual or
(xv) Option (a) is correct. organization for a specific period. It is a tool that
(xvi) Option (b) is correct. helps to allocate resources, prioritize spending, and
Ans. 2. monitor financial performance.
(i) 1. Central bank is a banker to the government and (iv) Two expectations of employees are:
acts as a lender of last resort, while commercial bank Fair compensation: Employees expect to be fairly

primarily deals with individuals and businesses. compensated for their work, skills, and experience.
2. Central bank formulates and implements monetary This includes competitive wages, benefits, and
policy to control the supply of money and credit opportunities for advancement.
in the economy, while commercial bank provides Safe and respectful work environment: Employees
banking and financial services to the public. expect to work in a safe and respectful environment
(ii) 1. Advertising is a form of paid communication free from harassment, discrimination, and other
aimed at promoting a product or service to a large forms of inappropriate behaviour. They also expect
audience, while sales promotion is a short-term clear communication, feedback, and support from
marketing strategy aimed at increasing sales by their supervisors and colleagues.
offering incentives to customers or retailers.
Ans. 4.
2. Advertising is a non-personal form of promotion
(i) An overdraft in a Current Account is a type of
that uses various media channels to reach a large
loan facility provided by a bank to its customers,
audience, while sales promotion is a direct form of
allowing them to withdraw more money from their
promotion that is targeted to specific customers or
accounts than they currently have. It is a short-term
retailers.
borrowing option that can help customers cover
(iii) 1. Capital receipts are those receipts that result in
their temporary cash flow needs.
an increase in the capital or net worth of a business,
(ii) Pricing refers to the process of determining the
while revenue receipts are those receipts that result
value of a product or service and setting a price
from the normal operations of a business.
that will attract customers and generate revenue for
2. Capital receipts include proceeds from the sale of
the business. It involves analyzing market trends,
fixed assets, share capital, and long-term loans,
competition, production costs, and consumer
while revenue receipts include sales revenue,
demand to determine an optimal pricing strategy.
service revenue, and interest received.
(iii) Fixed costs are expenses that do not vary with
(iv) 1. Debit card allows the cardholder to spend only
the level of production or sales volume. They are
the available balance in the linked bank account,
incurred regardless of the level of output or sales, and
while credit card allows the cardholder to borrow
remain constant over a specific period. Examples of
money from the card issuer up to a certain limit.
fixed costs include rent, salaries of permanent staff,
2. Debit card transactions involve immediate
property taxes, insurance premiums, etc.
deduction of funds from the linked bank account,
 SOLVED PAPER - 2023 5
For example, let’s consider a manufacturing (b) False Accounting Fraud: False accounting fraud
company that produces widgets. The rent for the refers to the practice of deliberately manipulating
company’s factory is $5,000 per month, regardless financial statements to mislead investors and other
of how many widgets they produce. This is a fixed stakeholders. This is usually done to create a false
cost. impression of the company’s financial health and
(iv) Health insurance is a type of insurance that covers profitability. Some common examples of false
the cost of medical and surgical expenses incurred accounting fraud include overstating revenues,
by the insured individual or their family members. understating expenses, or manipulating inventory
It is designed to provide financial protection levels to show a higher profit margin. False
against unexpected healthcare expenses, such as accounting fraud is considered a serious crime and
hospitalization, surgeries, diagnostic tests, and can result in heavy penalties and imprisonment.
medications. Ans. 6.
Health insurance policies can be purchased by (i) The central bank is responsible for performing
individuals or provided by employers as part of various functions that are critical for maintaining
their employee benefits package. The policyholder the stability of the economy. Two such functions
pays a monthly premium to the insurance company, are:
and in return, the insurer agrees to cover the cost of (a) Monetary Policy: The central bank is responsible for
medical expenses up to a certain limit, as outlined formulating and implementing monetary policies
in the policy terms and conditions. Some policies that regulate the supply of money in the economy.
may also include coverage for preventive care It controls the money supply by setting interest
services, such as annual check-ups, vaccinations, rates, reserve requirements, and open market
and screenings. operations. These policies are aimed at achieving
Ans. 5. price stability, promoting economic growth, and
(i) Merits of Road Transport: ensuring financial stability.
Accessibility: Road transport is easily accessible in
(b) Supervision and Regulation: The central bank
almost all parts of the world. It provides connectivity plays a vital role in supervising and regulating
to even the remotest areas, where other modes of banks and financial institutions. It issues licenses
transport are not feasible. to banks and financial institutions, monitors their
Flexibility: Road transport is highly flexible as it can
activities, and ensures that they comply with the
easily adapt to the specific needs of the customers. regulations and guidelines. It also sets the capital
It is also possible to change the route, destination requirements and conducts regular audits to ensure
or the mode of transport mid-way, which is not the financial soundness of these institutions.
possible with other modes of transport. (ii) (a) Right to be Informed: The right to be informed is
Demerits of Road Transport:
a consumer right that ensures that consumers have
access to complete and accurate information about
Congestion: Roads are often congested with heavy

the products and services they purchase. It enables
traffic, especially during peak hours, which results
consumers to make informed decisions based on
in delays and longer travel time.
the information available. This right includes the
Accidents: Road transport is more susceptible to
right to know about the quality, quantity, price,
accidents as compared to other modes of transport. ingredients, and other relevant details of the
It is estimated that a majority of road accidents
product or service. The suppliers are obligated
occur due to human error.
to provide this information in a clear and concise
Weather conditions: Adverse weather conditions
manner so that consumers can understand it.
such as heavy rain, snow, or fog can make road
(b) Right to Seek Redressal: The right to seek redressal
transport difficult and dangerous.
is a consumer right that provides consumers with
(ii) (a) Debentures: Debentures are a type of long- a mechanism to seek compensation or remedy
term debt instrument issued by companies to for any unfair trade practices, defective products
raise funds. They are like bonds and are backed or services, or any other grievances. This right
by the creditworthiness of the issuing company. enables consumers to approach consumer forums,
Debenture holders are considered as creditors of ombudsman, or other regulatory bodies to seek
the company and receive a fixed rate of interest redressal. It also includes the right to be heard, the
on their investment. Debentures are usually issued right to be represented, and the right to a fair and
for a period of 5 to 20 years and can be secured or speedy resolution of the grievance. The suppliers
unsecured.
6 Oswaal ICSE Question Bank Chapterwise & Topicwise, COMMERCIAL STUDIES, Class-X

are obligated to provide a timely and effective (e) Production Support: Warehousing can support
remedy for the consumer’s grievances. production processes by providing raw materials
Ans. 7. and finished goods storage. It enables organizations
to optimize production schedules and improve
(i) Enterprise Resource Planning (ERP) is a software
supply chain efficiency.
system that integrates and manages all the core
business processes of an organization. Two modules In summary, warehousing plays a crucial role in
of ERP are: inventory management, customer service, cost
savings, risk management, and production support.
(a) Finance Module: The finance module of ERP is
Ans. 8.
responsible for managing the financial operations of
an organization. It includes features such as general (i) There are two methods of training:
ledger, accounts payable, accounts receivable, (a) On-the-job Training: This method involves training
asset management, and cash management. This employees while they perform their regular job
module helps in maintaining accurate financial duties. It is a practical and hands-on approach
records, generating financial reports, and ensuring to learning. For example, a new employee at a
compliance with financial regulations. restaurant may be trained on-the-job by shadowing
an experienced employee and learning how to take
(b) Human Resource Module: The human resource
orders, prepare food, and interact with customers.
module of ERP is responsible for managing the
human resource functions of an organization. It (b) Off-the-job Training: This method involves training
includes features such as employee management, employees in a separate setting away from their
payroll, benefits administration, performance job duties. It may involve classroom instruction,
management, and recruitment. This module helps workshops, seminars, or online training. For
in streamlining the HR processes, maintaining example, an employee at a software company may
accurate employee records, and ensuring receive off-the-job training on a new programming
compliance with HR regulations. language through an online course or attend a
workshop on the latest software development
(ii) Warehousing refers to the process of storing and
techniques.
managing inventory in a dedicated facility. The
(ii) The five points of distinction between a product
importance of warehousing can be explained as
and a service are:
follows:
(a) Tangibility: A product is a physical item that can
(a) Inventory Management: Warehousing allows be touched and felt, whereas a service is intangible
organizations to store inventory in a centralized and cannot be touched or felt.
location, which makes it easier to manage and (b) Production and Consumption: A product is
control. It enables organizations to keep track of produced first and then sold, while a service is
inventory levels, monitor stock movement, and produced and consumed simultaneously.
optimize inventory replenishment. (c) Standardization: A product can be standardized,
(b) Customer Service: Warehousing helps which means that each item is identical, while a
organizations to provide better customer service service is customized to meet the needs of each
by ensuring that the products are readily available customer.
for delivery. It also enables organizations to fulfill (d) Ownership: A product is owned by the customer
customer orders quickly and efficiently. once it is purchased, while a service cannot be
(c) Cost Savings: Warehousing can help organizations owned as it is consumed at the time of delivery.
to reduce costs by enabling them to purchase (e) Quality Control: Quality control is relatively easier
inventory in bulk and store it in a cost-effective for a product, as it can be inspected and tested
manner. It also helps in reducing transportation before it is sold. On the other hand, quality control
costs by consolidating shipments and optimizing for a service is more challenging, as it depends
delivery routes. on the delivery process and the satisfaction of the
customer.
(d) Risk Management: Warehousing helps organizations
Ans. 9.
to manage inventory risks such as theft, damage, or
(i) The two sources of internal recruitment are:
obsolescence. It enables organizations to implement
(a) Job Posting: In this method, the organization posts
security measures, quality control processes, and
the job opening on its internal job board or intranet,
proper storage procedures to minimize the risk of
allowing current employees to apply for the
inventory loss or damage.
position. This method provides equal opportunity
 SOLVED PAPER - 2023 7
to all eligible employees, and it also helps in a mobile number and an MMID (Mobile Money
promoting a culture of internal career growth and Identifier) or an IFSC (Indian Financial System
development. Code). IMPS operates 24/7, and it is available on
(b) Employee Referral: In this method, current both mobile and internet banking platforms.
employees refer potential candidates for the open (b) Direct Costs: Direct costs are the expenses that are
position. The organization may provide incentives directly associated with producing or delivering
to employees for successful referrals. This method a product or service. These costs can be easily
can help in identifying qualified candidates who traced to a specific product or service. Examples
may not be actively looking for a job, and it can also of direct costs include raw materials, labor, and
help in reducing recruitment costs. direct overheads such as electricity and rent for the
(ii) (a) IMPS: IMPS stands for Immediate Payment production facility. Direct costs are an important
Service. It is a real-time interbank electronic fund factor in determining the profitability of a product
transfer service in India. It enables customers to or service, as they directly impact the cost of
transfer funds instantly to any bank account using production.
Ans. 10.
To prepare the Trading, Profit, and Loss Account and Balance Sheet, we first need to calculate the gross profit,
net profit, and closing capital of X Y Z for the year ending on 31st March 2022.
Trading, Profit and Loss Account for the year ending on 31st March 2022
Ans. Trading A/c
Dr. of XYZ for the year ending 31st march,2022 Cr.

Particulars Amount Particulars Amount

(Dr.) (`) (Cr.) (`)
To Opening Stock A/c 5,00,000 Sales A/c 3,21,000
Purchases A/c 15,00,000 (–) Sales Return 1,00,000 3,11,000
Debtors A/c 5,000 1,45,000 By Closing stock 60,000
To Gross Profit 1,76,000
3,71,000 3,71,000

               Profit And Loss A/c               

of XYZ
Dr. for the year ending, 31st March 2022 Cr.

Particulars Amount Particulars Amount

(Dr.) (`) (Cr.) (`)
Salaries 30,000 Gross Profit b/d 1,76,000
Wages 20,000 Interest Recd. 4,000
Rent 15,000
Carriage Outward 7,000
Printing & Stationary 8,000
Insurance 12,000
Office Expenses 12,000
Net Profit transferred to capital A/c 76,000
1,80,000 1,80,000
8 Oswaal ICSE Question Bank Chapterwise & Topicwise, COMMERCIAL STUDIES, Class-X

Balance Sheet
as on 31st March, 2022

Amount Amount
Liabilities Particulars
(Dr.) (`) (Cr.) (`)
Capital 1,00,000 Furniture 20,000
(+) Net profit 76,000 Debtors 20,000
1,76,000 Stock 60,000
(–) Drawings 24,000 1,52,000
Creditors 1,26,000
Bank Overdraft 2,000
2,80,000 1,80,000

Therefore, the gross profit of XYZ for the year ending on 31st March, 2022 was ` 1,76,000.
The closing capital of XYZ as on 31st March, 2022 was ` 1,52,000.

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