ISC Commerce 2010 Class-12 Previous Year Question Papers

ISC Commerce 2010 Class-12 Previous Year Question Papers Solved for practice. Step by step Solutions with Questions of Part-1 and Part-2. By the practice of Commerce 2010 Class-12 Solved Previous Year Question Paper you can get the idea of solving.

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ISC Commerce 2010 Class-12 Previous Year Question Papers Solved

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Maximum Marks: 80
Time allowed: Three hours

  • Candidates are allowed additional 15 minutes for only reading the paper. They must NOT start
    writing during this time.
  • Answer Question 1 from Part I and seven questions from Part II.
  • The intended marks for questions are given in brackets [ ].

Part – I (20 Marks)

Answer all questions.

ISC Commerce 2010 Class-12 Previous Year Question Papers Solved

Question 1.
Answer briefly each of the questions (i) to (xv). [15 × 2]
(i) List any two features of planning as a function of management.
(ii) HOW are the first directors of a company appointed?
(iii) Mention any two limitations of direct mail advertising.
(iv) What is meant by gangplank?
(v) Mention any two drawbacks of public deposits as a source of finance.
(vi) What is horizontal communication?
(vii) State two functions of exchange with reference to marketing.
(viii) What is the significance of the objects clause in the Memorandum of Association of a company?
(ix) What is staffing?
(x) What are Multinational Companies?
(xi) Give any two conditions under which a cheque is dishonoured by a banker.
(xii) Explain any two demerits of a joint-stock company.
(xiii) What are mutual funds?
(xiv) Who is an alternate director?
(xv) What are retained earnings?
Answer 1:
(i) Planning is selecting priorities and results (goals, objectives, etc.) and how those results will be achieved. Planning typically includes identifying goals, objectives, methods, resources needed to carry out methods, responsibilities and dates for completion of tasks.

(ii) First directors of a company are appointed by the original investors (members or subscribers) usually from among themselves and are named in the Articles of Association. However, mention in the Articles does not constitute a valid appointment until the person gives his or her signed consent to hold the office of the director, and is not disqualified (for any reason) from holding that office.


(a) There is a relatively high cost per contact.
(b) It may be difficult to obtain updated, accurate mailing lists.


(iv) A Gang Plank is a temporary arrangement between two different points to facilitate quick and easy communication as explained below:
ISC Commerce Question Paper 2010 Solved for Class 12 Q1
In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C. B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gangplank has been developed between the two.
Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations.


(i) Public deposits are an uncertain and unreliable source of finance.
(ii) Public deposits distort the interest rate pattern.
(iii) Public deposits are generally not available to new companies and those with uncertain earnings.

(vi) Horizontal communication is that communication which flows in the same level of management For example – communication between the manager of the sales department and manager of purchases department.


(a) Exchange helps in the process of marketing.
(b) Exchange creates utility.

(viii) The Objects clause is the most important clause of the company. It specifies the activities which a company can cany on and which activities it cannot carry on. The company cannot carry on any activity which is not authorised by its Memorandum of Association. This clause must be specified.

  • Main objects of the company to be pursued by the company on its incorporation
  • Objects incidental or ancillary to the attainment of the main objects
  • Other objects of the company not included in (i) and (ii) above.


In case of the companies other than trading corporations whose objects are not confined to one state, the states to whose territories the objects of the company extend must be specified.

(ix) Staffing is the management function devoted to acquiring training, appraising and compensatin’- employees.

(x) A multinational company is a company having production and distribution centres located in more than one country. It carries on business not only in the country’ of its incorporation but also in other countries. For example-Sony, HP, etc.

(xi) A cheque can be dishonoured by a banker in the following conditions:

  • When there is no sufficient balance in the account on which the cheque has been issued.
  • If there is any alteration on the cheque and that alteration has not been authorized by the account holder.
  • When the signatures put on the cheque do not match with the signatures stored in the records of the bank.


(a) Unsatisfactory management
(b) Difference of opinions
(c) Heavy expenses of formation.


(xiii) A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. Currently, the worldwide value of all mutual funds totals more than $30 trillion.

(xiv) An alternate director is a temporary’ director who can represent an elected director at a meeting of the board of directors, provided (1) the articles of association of the company allow for such arrangement and the other elected directors of the firm do not object.

(xv) Retained earnings are the undistributed profits of the company. These earnings help the company to avoid external borrowings.

Part – II (60 Marks)
Answer any five questions

ISC Commerce 2010 Class-12 Previous Year Question Papers Solved

Question 2.
(a) Briefly explain any four demerits of a Government Company. [4]
(b) Briefly explain any four demerits of a Government Company. [4]
(c) What is a private limited company? State any eight privileges enjoyed by it. [6]
Answer 2:
(a) Demerits of Government Companies are:

  • Lack of accountability: A government company is not fully responsive to the parliament or the general public. It enjoys special privileges. It may not act for the public interest.
  • Political interference: In actual practice politicians and bureaucrats interfere in the functioning of Government companies. Such interference cause lack of ness in management and adverse effect in proficiency.
  • Indifferent management: Government companies are generally managed by Government servants and other Government officers. They are not hard-working and take little personal interest in running the company on a sound business line. The efficiency of operations is low. Operational costs are high.

(b) Private Company means a company which by its articles of association.

  • Restricts the right of members to transfer its shares.
  • Limits the number of its members to fifty. In determining this number of 50 employee members and ex-employee members are not to be considered.
  • Prohibits any invitation to the public to subscribe to any shares in or the debentures of the company.

If a private company contravenes any of the aforesaid three provisions, it ceases to be a private company and loses all the exemptions and privileges which private company is entitled.

  • Limited liability,
  • The simple and easy formation,
  • Immediate commencement of business upon incorporation,
  • Liberal payment of remuneration and loans to directors without any restrictions,
  • Easier inter-corporate loans
  • Lesser disclosure requirements
  • Tremendous ease in operation
  • Two directors are enough
  • Two Shareholders are adequate
  • Need not declare a dividend

Question 3.    (ISC Commerce 2010 Class-12)
(a) Explain any four factors which determine the working capital requirement of a business. [4]
(b) What are special financial institutions? Discuss any four advantages of obtaining funds from such institutions. [6]
Answer 3:
(a) Factors affecting Working Capital

  • Type/Nature of Business: Working capital level is generally higher in manufacturing-based versus service-based organisations.
  • Depends on the Volume of Sales: The higher the sale, the higher is the level of working capital required.
  • Seasonality: Peak seasons like festive seasons require a higher level of working capital.
  • Length of Operating And Cash Cycle: A longer operating and cash cycle increases the level of working capital.

(b) Special Financial Institutions: A wide variety of financial institutions have been set up at the national level. They cater to the diverse financial requirements of the entrepreneurs. They include all India development banks like IDBI, SIDBI, IFCI Ltd, UBI; specialised financial institutions like IVCF, ICICI Venture Funds Ltd, TFCI; investment institutions like LIC, GIC, UTI: etc.
Advantages of Special Financial Institutions are:

  • They provide finance for the growth of the industry.
  • They accelerate the growth of the industrial sector by encouraging them to have better industrial output.

Question 4.    (ISC Commerce 2010 Class-12)
(a) Explain the primary functions of commercial banks.
(b) What is a debenture? Explain any two advantages and any two disadvantages of debentures from the viewpoint of a company. [6]
Answer 4:
(a) Primary Functions of Commercial Banks
1. To Receive Deposits
Receiving deposits is the most important function of commercial banks. The deposits can be accepted in the form of the following types:
(i) Saving Deposits: The people of middle and lower classes who wish to save a part of their income can invest in Saving Bank Accounts. Deposit in these accounts also earns interest at the rate announce by the RBI from time to time.

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