Important Questions for CBSE Class 11 Business Studies Chapter 10 – Internal Trade
Important Questions Class 11 Business Studies Chapter 10 – Internal Trade
Business studies are one of the most extensively studied subjects in the world because of its scope and application. The social sciences is a vast field of study. One of its branches known as “business studies” provides for specialisation in marketing, finance, organisation, and accounting. Internal Trade is the tenth chapter of the NCERT textbook of Class 11 Business Studies. This chapter covers concepts such as meaning and types of internal trade, services of wholesalers to manufacturers and retailers, services of retailers, types of retailers, forms of small-scale and large-scale retailers, the role of chambers of commerce and industry in the promotion of internal trade, implementation of GST and so on. Students can easily access all this and more on the Extramarks website.
In addition to being important for the board exam, the NCERT Business Studies Class 11 syllabus also serves as a subject that students may need in higher studies later. The NCERT Textbook, NCERT Exemplar, other reference books, past years exam papers, and other sources have all been used by Extramarks professionals to compile these questions. To assist students in understanding each chapter, our business studies subject matter experts have compiled a list of step-by-step solutions to help students better comprehend the topics and help them to study independently without any further assistance. Students can register with Extramarks and access Chapter 10 Class 11 Business Studies Important Questions.
Along with Business Studies Class 11 Chapter 10 Important Questions, students can easily access materials like NCERT Solutions, CBSE revision notes, past year question papers, NCERT books, and more once they register themselves on the Extramarks website.
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|CBSE Class 11 Business Studies Important Questions|
|Sr No.||Chapters||Chapters Name|
|1||Chapter 1||Business, Trade and Commerce|
|2||Chapter 2||Forms of Business Organisation|
|3||Chapter 3||Private, Public and Global Enterprises|
|4||Chapter 4||Business Services|
|5||Chapter 5||Emerging Modes of Business|
|6||Chapter 6||Social Responsibilities of Business and Business Ethics|
|7||Chapter 7||Formation of a Company|
|8||Chapter 8||Sources of Business Finance|
|9||Chapter 9||Small Business|
|10||Chapter 10||Internal Trade|
|11||Chapter 11||International Business|
Internal Trade Class 11 Questions and Answers
Business Studies experts at Extramarks have curated an entire list of Class 11 Business Studies Chapter 10 Important Questions from different sources. The questions comprises of a wide variety of topics, including meaning and types of internal trade, services of wholesalers to manufacturers and retailers, services of retailers, types of retailers, forms of small-scale and large-scale retailers, the role of chambers of commerce and industry in the promotion of internal trade, implementation of GST and so on. These questions and solutions help students to clear their concepts and get a better understanding of this chapter on Internal Trade.
Given below are a few Important Questions from Class 11 Business Studies Chapter 10 and their solutions:
Q1. What are the services offered by retailers to wholesalers and consumers?
Answer. Retailers provide the following services:
- They assist clients in choosing the goods to purchase by informing them about new products on the market.
- Additionally, they give distributors information about consumer tastes and preferences, market dynamics, and rival companies.
- By keeping an extensive range of items in stock that cater to consumer desires, they assist customers in selecting the most refined product.
- Retailers also advertise products since they have a direct line to customers and are best positioned to suggest and boost sales for producers and wholesalers.
- They also help make it easier to distribute items to consumers.
Q2. Explain the usefulness of mail-order houses. What type of products are generally handled by them? Specify.
Answer. Mail-order retailers ship their products to customers’ homes. In this company, buyers and sellers rarely have a direct human touch.
Benefits of a mail-order house:
- Limited funds are needed: A mail-order firm’s building and other infrastructure costs are minimal. As a result, it may be launched with relatively less money.
- Elimination of intermediaries: Mail-order businesses do away with their influence on intermediaries’ behaviour toward clients. This eventually results in losing customers in favour of a large client.
- Lack of bad debts: Postal order houses do not offer credit to their clients, and there is also no chance of a bad debt arising from a customer’s failure to pay with cash.
- Broad Reach: As soon as the items are sent, the seller will be able to give customers throughout the nation information about their possessions.
- Convenience: With this approach, products are delivered to customers’ homes. The outcome is excellent, and customers will find it simple to acquire these products. Mail-order businesses often handle the following product categories:
- Standard and graded things.
- Items that are inexpensive and convenient to carry.
- Goods that are available and in demand.
- Things that are simply described using images.
Q3. Which stores sell a certain line of products?
Answer. The specialty shops sell just certain lines of goods. These retail establishments concentrate on selling a certain line of a product rather than a range of goods from many categories. Speciality stores often have a prominent position from which many consumers may be attracted, and these stores also provide a wide range of products.
Q4. What is meant by internal trade?
Answer. Internal trade is the phrase used to describe the purchasing and selling of commodities and services within national borders. They are not subject to import or customs taxes because they are manufactured domestically and are intended for domestic use. Internal trades come in two flavours: wholesale trade and retail trade.
Q5. Itinerant traders have been an integral trade in India. Analyse the reason for their survival despite competition from large-scale retailers.
Answer. Itinerant traders are business people who travel from one location to another. In other words, they lack a storefront from which to sell their goods. Since they go from one place to another to sell their goods, they are often called mobile merchants. They typically hang out by the road side and roam around looking for additional customers. They often market inexpensive, uncommon goods.
Despite intense competition from large-scale shops, itinerant sellers can survive because of the factors listed below:
- They often focus on lower-cost necessities, including private items, fruits, and vegetables, etc.
- They have direct interactions with customers, enabling them to deliver better customer service by receiving the proper answer and passing information to manufacturers.
- They move from one location to another , delivering items to customer service departments that make it simple for customers to get the much needed supplies.
- Due to low search quality, travelling merchants find it difficult to store in such locations. Even in remote locations, they provide their services.
Q6. The automatic vending machine should be described as a source of retail trade.
Answer. A novel and valuable type of selling is a vending machine. It is a slot machine that takes money or tokens to operate. A predetermined amount of a product is delivered to the buyer once they enter a coin or token into the machine. The sale of pre-packaged, low-cost items for mass consumption, such as soft drinks, hot beverages, cigarettes, and tickets, is done through vending machines. Mother Dairy offers milk via vending machines in Delhi.
The ease with which items may be handled and money can be collected are why vending machines have grown in popularity. A new supply of consistent weight and quality items is sent to the consumer. Additionally, vending machines may offer items at times and locations when traditional forms of retailing are neither practical nor cost-effective. The cost of labour is reduced. However, the machine’s initial investment is highly significant. Regular maintenance and repairs are needed for the device.
The following are some advantages of vending machines:
- It is convenient for the clients to buy things from the machine.
- Machines offer efficient service.
- Customers become accustomed to self-service thanks to machines.
- Manufacturers must create unique peaks that are tailored to the machine.
- Care must be exercised when routinely restocking the machine’s supply.
- Only edible consumer items, such as candy, chocolate, soft drinks, coffee, etc., can be sold using machines.
Q7. Specify the characteristics of fixed shop retailers.
Answer. Retailers who operate from fixed locations are those who keep a permanent building. They do not have to relocate to offer their services and sell their products.
These are a few of the characteristics:
- Compared to other merchants, they have a more extensive resource base and a more significant operation.
- They deal in consumer durables, non-durables, and other product categories.
- They can provide extra services like home delivery and items on credit.
- Because they are permanently installed, they are more trusted by the customer.
Q8. Imagine life without your local market. What difficulties would a consumer face if there is no retail shop?
Answer. A lack of retail stores can cause many problems since they operate as a bridge between producers and consumers by purchasing products from supermarkets and other retailers and then selling them straight to customers. Life will be challenging for the neighborhood if there are no retail outlets open at that time. People will have to spend a significant amount of money if they purchase an essential item or anything for daily usage. If other retail establishments are accessible by transportation and not far from our home, we can purchase various items when needed. If stores are nearby, we can quickly locate medicine and other essential supplies in an emergency. Otherwise, life would be quite challenging.
They are essential in the following areas:
- Product availability: One of the most important services sellers provide customers is maintaining the widespread availability of different items made by different producers. This enables clients to shop whenever and however they need to.
- Product details: Information on new items, their characteristics, pricing, etc., is provided to customers by stores. This knowledge makes it simpler for clients to choose a product by assisting them in their decision-making process.
- Convenient purchase: Customers can make purchases based on their requirements. They are also widespread. It is open and reasonably near to residential areas. It provides excellent flexibility since customers may acquire things that best fit their demands for a very long period.
- Wide choice: Customers may often find a wide range of products from retailers, including meals, dairy products, and stationery.
- After-sale services: Important ones are offered by retailers in the form of home delivery, after-sales service distribution of replacement components, and customer care.
- Providing credit facilities: Regular purchasers can occasionally get credit facilities from consumers, raising their level of consumption and, consequently, their style of living.
Q9. The most well-known retail trade-in city is the supermarket. . List its advantages and disadvantages.
Answer. A supermarket in bazaar is a sizable retailing business unit that sells a wide range of consumer goods, including food and grocery items, based on their low margin appeal, wide variety and assortments, self-service capabilities, and a strong emphasis on merchandising appeal.
A supermarket mainly sells food, groceries, and convenience products like clothing, household goods, cosmetics, pharmaceuticals, electronics, etc. The primary retail centre is often where it is located. The price and quality of the items are prominently marked on them, and they are stored in open racks.
A customer may choose products while travelling from counter to counter, pick up the products they’ve chosen, and put them in a trolley. Following his pick, the trolley will be moved to the exit where the entire cost will be calculated, the buyer will pay the cashier, and he will get the products. As a result, the store adheres to the principle of consumer self-help. The salesman doesn’t put any pressure on the clients. That is what draws a lot of people to the grocery.
The supermarket is departmentally structured, allowing customers to purchase a variety of commodities under one roof. Because there are no salespeople to engage with clients at the super Bazar, a supermarket may be distinguished from a department shop. Customers are allowed to select the goods of their choosing. Additionally, a supermarket does not provide other services that a department shop often offers. For instance, supermarkets do not provide free home delivery services or credit sales.
The following are the key characteristics that set a supermarket apart from other retail establishments:
- A supermarket often stocks a full range of grocery and food items and non-food convenience items like medicines, cosmetics, and other household goods.
- Its layout is quite like that of a department shop. Customers may purchase everything they need under one roof.
- Self-service is the guiding philosophy of a supermarket. In a supermarket, there are no salespeople or shop employees to assist or pressure the consumers. Because of this, it is referred to as a self-service store. Consequently, the cost of distribution is reduced.
- A supermarket is a low-cost retail establishment compared to other types of retail establishments. Because of the bulk purchases, lower operating costs, and low-profit margins, the prices of the items are typically lower than those of other sorts.
The benefits of a supermarket are as follows:
- A large-scale retail establishment is a supermarket. It benefits significantly from large-scale purchasing and selling. Due to this and high turnover, its operating expenses are reduced, allowing it to sell items at lower prices. These stores provide customers with an affordable and straightforward way to make purchases.
- Since there are no salesmen to persuade and pressure the clients, much care is put into the product’s packaging. This distinctive aspect of self-service is popular with many individuals. They like having the freedom to choose products without any external pressure.
- All the consumers’ purchases may be made under one roof. So, a supermarket offers lower-quality products to clients due to high turnover and a lack of salespeople. Additionally, there are cheaper administrative and distribution costs per product unit.
- There is zero risk of bad defaults because supermarkets only accept cash.
A supermarket has the following drawbacks:
- Certain people place more value on individual attention. Since there are no salespeople in the store, some customers dislike doing their shopping there.
- Supermarkets cannot handle products that require personal explanation by the salesman. It operates on the theory of self-service.
- Some clients abuse the ability for self-service and selection by handling the products carelessly. The supermarket can suffer losses as a result.
- Due to increased overhead costs, a few supermarkets haven’t been able to have prices low enough to attract consumers in scale.
- A supermarket takes significant capital to establish and operate, and to maintain operating costs within manageable ranges, the supermarket’s turnover should be higher. As a result, a supermarket cannot be opened if the required funding is lacking and a significant turnover is not anticipated. In other words, smaller communities are not a good fit for supermarkets.
Q10. Explain the services offered by wholesalers to manufacturers.
Answer. Wholesalers provide the following services:
- Buying products in bulk from producers, holding them, and then distributing them in small amounts to retailers.
- Based on wholesalers’ bulk purchases, manufacturers are encouraged to engage in large-scale manufacturing.
- Reduces the need for producers to store the finished products.
- Assists businesses with market data and consumer preferences.
Q11. Discuss the features of a departmental store. How are they different from multiple shops or chain stores?
Answer. Department stores are substantial businesses that aim to meet all their clients’ needs under one roof. The shop is divided into many categories, each of which deals with a distinct kind of items, such as food, furnishings, drugs, and electronics.
The following characteristics define departmental stores:
- A department store strives to give excellent service to consumers by offering amenities like bathrooms, restaurants, food stores, etc.
- Stores are placed in busy areas to draw in plenty of consumers.
- A department store serves as both a retail establishment and a warehouse. Every purchase is made straight from the manufacturer.
Chain stores are networks of retail establishments that producers or their agents own. In this structure, businesses with similar aesthetics are developed in various neighbourhoods around the city, whereas department stores are established in the city’s centre. These stores sell branded consumer durable goods, and their displays and merchandising techniques are all the same.
Q12. Write briefly about modern-day telemarketing or teleshops.
Answer. Telemarketing is a type of non-store selling in which the vendor contacts a customer over the phone and completes the deal. The telephone directory and other sources are places where a telemarketer can get potential clients’ names and phone numbers.
Telemarketing may advertise well-known goods and services, including magazine subscriptions, credit card memberships, health and beauty items, and educational assistance. ICICI and Citibank use this strategy to promote their credit cards among consumers.
A telemarketer may utilize a TV network, such as Doordarshan, Metro, Zee TV, or Sony TV channel, to promote the product and its benefits, applications, and pricing. The interested client can contact the advertiser, such as Asian Sky Shop, directly by phone, fax, email, or postal mail to place an order. The manufacturer’s distribution van, a courier, the post office, or another delivery method are all options. At the time of delivery, payment is due. Shopping may be done quite conveniently through telemarketing. In India, it is gaining popularity.
From the consumer’s perspective, purchasing or “dial-n-order” is an efficient way to purchase. Shopping does not need to go to the store. A credit card can be used to place an order and pay for it over the phone. Teleshopping is not only convenient, but it is also less expensive because there are no intermediaries involved. The rising emphasis on consumers might be responsible for telemarketing’s appeal.
Telemarketing is a more affordable way to do retail business from the seller’s perspective. It reduces spending on salespeople and retail showrooms. Through telemarketing, a business with retail locations or stores in significant cities can also reach clients who live in remote areas. Growing satellite networks have improved Telebuying and Teleselling by raising brand recognition. Over five years, the sector expanded quickly, reaching a scale of 2000 crores with more than one million consultants.
Telemarketing is a key direct marketing tactic in the USA and is increasingly popular in India. Telemarketing, however, has the drawback of not interacting personally with the customers. Additionally, the customer cannot view the items directly before placing a purchase. Teleshopping is not for everyone. When call centres make unwanted calls to them to promote credit cards or personal loans, they become upset.
Q13. How would you differentiate between street traders and street shops?
Answer. Street Traders:
- Small vendors that sell inexpensive goods on the street.
- No lasting stores
- Some examples of street traders are those selling newspapers and vegetables.
- Traders with retail establishments on the sidewalk sell things.
- They have a set of stores.
- Examples of street stores are those selling groceries and Xerox machines.
Q14. Why are consumer cooperative stores considered to be less expensive? What are its relative advantages over other large-scale retailers?
Answer. Aiming to provide items to society’s members at low rates, consumer cooperative stores are established, run, and governed by customers. The elimination of intermediaries is the most attractive feature of consumer cooperatives. Since there is no business motivation, the prices of the items are less high than those found in retail stores. In comparison to large-scale businesses, the capital investment is also lower.
The benefits of a cooperative store are as follows:
- An association of ten persons can create a cooperative and register it by following the necessary procedures.
- Members’ responsibility is limited to the amount of capital they have contributed.
- Each cooperative member has one vote to elect a representative.
- Since there are no middlemen in the network, prices are kept in check.
Q15. What purpose is served by wholesalers providing warehouse facilities?
Answer. For the following reasons, wholesalers offer warehouse facilities:
- They buy products in bulk from producers. Small amounts of the acquired products should be stored and distributed to retailers.
- They are referred to as places of use since they are located close to the distribution centre.
- Thanks to distributors’ bulk purchases, manufacturers may carry out large-scale production without worrying about storage concerns.
Q16. A franchise is a nuisance in the realm of modern marketing. What are its advantages and disadvantages?
Answer. A franchise is a commercial concession allowing a corporation or individual to provide a retailer with the right to sell their goods or services in a particular location. In exchange for royalties, the owner of a product (referred to as a franchisor) authorizes another business entity (referred to as a franchisee) to sell the product.
The franchise is “a continuing relationship in which franchisee provides a licensed privilege to do business plus assistance in training, organizing, merchandising, and management in return for a consideration from the franchise.” The franchise is the right or privilege to use an established business system. An arrangement between a franchisor and a franchisee is a franchising operation.
Thus, a franchise is a system in which the provider of a good or service gives the franchisee the only authority to sell that good or service in a certain region under a set of rules. The franchiser is the proprietor of the good or service who authorises the distribution. The franchisee is the individual or business that purchases the rights or franchise.
A franchise system is where a producer gives merchants the sole authority to sell their goods or services in particular locations. These merchants are obligated to advertise and market the goods in a particular way. The terms and conditions of the franchisee are outlined in a written agreement between the franchisor (supply) and the independent franchisee (retailers).
Many kinds of businesses use the franchising model. Some examples of consumer goods where the franchise is well-liked include cosmetics, ready-made clothing, televisions, VCRs, music systems, computers, machinery and equipment, cars, service of consumer durables, computer training, and real estate. Franchises in India include Wimpy, Nirulas, Essex Farms, Snow-white Drycleaners, and others.
In exchange for enabling the use of the trademark and offering training, the franchiser receives either a set payment or recurring royalties. The franchisee pays for a reputable, established company. He receives expert counsel and assistance from the franchisor with national sales advertising. Typically, a product or service’s franchised locations use the same trademark, standardised insignia, standardised goods, and business practices. The franchisee is required to raise his capital.
The following are the franchise’s key benefits:
- Existing Brands: The franchisee is granted permission to utilise the franchisor’s well-known brand name or trademark. Association with a well-known brand offers access to a ready market. A franchise enables a rapid and straightforward company launch. Due to the popularity of the items, the franchisee has better possibilities for success.
- Standardised Goods and Services: The calibre of the franchisee’s goods and services significantly impacts the franchisor’s reputation. The franchisor ensures that goods and services are uniform throughout all the franchised stores. He supplies the raw ingredients and closely monitors the product quality. By providing high-quality goods, the franchisee can satisfy his clients.
- Support for Advertising: The franchisor continues to advertise. The benefits of such advertising and the goodwill or reputation of the franchisor are passed on to the franchisee. The items are highly publicised in various media, and consumers know them. The franchisee finds it simpler to encourage product sales.
- Financial Support: The franchisor provides the franchisee with various financial supports, including short-term financing, cheaper down payments, flexible payback options, etc. Plant and equipment, accounts receivable, etc., are all eligible for financial help.
- Franchisers offer technical and management training to franchisees, as well as to their workforce. Before starting a franchise, advice and training are given on how to run the business profitably and professionally, as well as in inventory management, accounting, sales promotion, advertising, etc. Along with continuous business support, aid is also offered with site selection and market research.
The following drawbacks of the franchise system exist:
- Fees and Royalties: The price of a franchise includes the cost of a licence and the cost of the first application procedure. It is not refundable and must be paid when the franchise agreement is signed. Other expenses include the down payment for equipment, store decorating, office furnishings, opening-day promotions, etc. The franchise is responsible for covering training-related travel and housing costs. Additionally, he is required to make ongoing royalty payments.
- Lack of Flexibility: The franchisee lacks the freedom to operate a firm on their terms. He must abide by the restrictions put in place by the franchisor to guarantee the calibre and consistency of the standards for the Goods or Services. All products utilised by the franchisee must meet strict quality requirements. The freedom to buy is likewise constrained.
- Limited Product Line: The franchiser controls the goods and services offered at the franchisee’s location. The franchisee may introduce only the goods that the franchisor has approved.
- Limitations on Franchise Sales: The franchiser must approve any sales, transfers, or assignments of ownership interests. Even after the transaction is authorised, the new franchisee must abide by the franchise’s rules and regulations.
- The franchiser cannot handle or manage the franchisees like his workers, which is a disadvantage. If by any chance, they believe they are not being treated fairly or do not perceive benefits in the franchise network, franchisees tend to become rather outspoken and demanding. In-depth communication is required and travelling to franchisees in far-off locations can be expensive. The franchiser is responsible for covering all administrative, training, advertising, legal, and other related costs.
The above-stated section of Important Questions Class 11 Business Studies Chapter 10 is a list of Important Questions covering the entire chapter.
Benefits of Solving Important Questions of Internal Trade Class 11
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Q.1 What do you mean by internal trade?
Internal trade means buying and selling of goods and services within the national boundaries of the country.
Q.2 Explain the following terms:i. COD
i. COD: It means cash on delivery. It refers to a financial transaction where the payment of products and/or services is made at the time of their actual delivery.
ii. FOB: It is free on board. It refers to a contract between the seller and the buyer of goods in which all the expenses from the shipment of goods till the point of delivery to a carrier are borne by the seller.
iii. CIF: It stands for cost, insurance and freight. It refers to a contract between the seller and the buyer of goods in which all the expenses – cost, insurance and freight relating to the shipment of goods up to the port of destination are borne by the buyer.
iv. E&OE: It means errors and omissions excepted. It is used in an attempt for reducing legal liability for incorrect/incomplete information supplied in contractually related documents such as price list, quotation, etc.
Q.3 Explain how do wholesalers facilitate financing and storage of goods for manufacturers.
Wholesalers help the manufacturers in the following ways:Financial assistance: Wholesalers generally purchase goods on cash. Therefore, manufacturers do not need to block their capital in maintaining stocks. Wholesalers also provide advances to the manufacturers for the orders placed by them.
Storage: Wholesalers take delivery of goods from the factory and keep them in godowns/warehouses. They reduce the burden of manufacturers by providing them the storage facilities for the finished goods. By this service, wholesalers provide time utility.
Q.4 How do retailers help consumers?
Retailers help consumers in the following ways:
i. Regular availability of products: Retailers maintain regular availability of various products produced by different manufacturers, which enables the buyers to choose from among a variety of products and buy them when needed.
ii. Convenience in buying: Retailers sell goods in small quantities. They are situated near the residential areas and remain open for long hours.
iii. New products information: Retailers make arrangement for effective display of products and increase the sale by personal selling efforts. They provide vital information about new arrivals, special features, etc. of new products to the consumers.
iv. After sale services: Retailers provide important after sale services like home delivery, supplying spare parts.
Q.5 Identify the retailers who have no fixed place of sale.
Q.6 State the full form of E&OE.
Errors & Omissions Excepted
Q.7 Which form of retail trade do ATMs fall under?
ATMs are types of vending machines, which are a part of retail trade.
Q.8 What are the temporary shops in a business locality known as?
Q.9 Akram sells children’s garments in Sunday markets in Old Delhi. Identify the type of retailer Akram is.
Akram is a street trader.
Q.10 Explain the ‘invoice’ and ‘debit note’ used in relation to internal trade.
Invoice: It is a bill of charges or a document sent by the seller to the buyer at the time of the supply of goods. It contains the following details:
i. Name and address of the seller and buyer
ii. Reference to the order number
iii. Serial number and date of the invoice
iv. Quantity and description of goods
v. Sales Tax or VAT
vi. Terms of payment
vii. Trade discount and incidental expenses
Debit Note: It is a written document, which one party (either buyer or seller) sends to the other. It informs that receiver’s account has been debited with the specified amount and the reasons specified there in.
It is used to intimate errors in invoice or raising a debit for other reasons. It acts as an additional invoice.
A debit note may be sent by the seller to the buyer or vice-versa, as the need may be.
Q.11 What is a vending machine? State its merits and demerits, as a form of retail trade.
A vending machine is a direct and new form of retail trade in which the machine is operated by coins or tokens. These machines can be seen at petrol pumps, railway stations, airports for selling cold drinks, milk, etc.
Automated Teller Machine (ATM) is the latest area through which a customer can withdraw money at any time without visiting the bank.
Merits of a vending machine are:
i. It is useful for selling pre-packed brands of low-priced products.
ii. Buying round the clock is possible with it.
iii. Fresh supply of goods with uniform weight and quality is available to the customers.
iv. Salesperson is not required.
i. The cost of its initial installation is high.
ii. Heavy expenditure is levied on its regular maintenance and repairs.
iii. Consumers cannot see and feel the product before buying.
Q.12 What is ‘Breaking the Bulk’ in wholesale trade?
‘Breaking the Bulk’ is a special function and feature of a wholesaler under which he purchases goods in large quantities and then sells them in smaller lots.
Q.13 What is meant by retail trade?
Retail trade is the trade in which a trader purchases goods from wholesalers or producers or agents, and sells them in small quantities to the ultimate consumers.
Q.14 What is the meaning of wholesale trade?
Wholesale trade means buying the goods in large quantity directly from the producers and selling them to retailers in small quantities.
Q.15 How the wholesalers are able to share the risk retailers?
The wholesalers have large funds. They purchase the goods in bulk and sell in relatively small quantities to the retailers as per their need. The retailers have comparatively less funds and are not able to invest funds in storing the goods. They purchase in smaller quantities from the wholesalers. Retailers are in a position to avoid the risk of storage, pilferage, obsolescence, reduction in prices and demand fluctuations in respect of larger quantities of goods that they would have to purchase in case the services of wholesalers are not available.
Q.16 What is meant by internal trade? State its features.
When buying and selling of goods and services takes place within the boundaries of a country, then it is called internal trade. Internal trade can be classified into two categories:
- Wholesale Trade, and
- Retail Trade.
Followings are the important features of internal trade:
- Generally all receipts and payments for the transactions are made in national currency.
- No custom duty or import duty is levied on trade as goods are the part of domestic production and meant for domestic consumption.
- Several alternative modes of transport are available for carrying goods.
Q.17 How does the market information provided by the wholesalers benefit the manufacturers?
The wholesalers are in direct contact with the retailers, through which they get updated with the new trends of the market and demand of the consumers. They are in a position to advice the manufacturers about various aspects including customer’s tastes and preferences, market conditions, competitive activities and the features preferred by the buyers. They serve as an important source of market information on these and related aspects. It helps the manufacturers to take important decisions regarding products, prices etc.
Q.18 State any three features of fixed shop retailers.
Followings are the main features of fixed shop retailers:
- These retailers have permanent establishment to run their business activities. They do not move from place to place to serve their customers.
- These retailers have greater credibility in the minds of customers due to permanent establishments.
- These retailers may deal in different products, including consumer durables as well as non-durables.
Q.19 What are the services offered by retailers to wholesalers and customers?
The services offered by retailers to wholesalers are:
- Help in Distribution of Goods- Provide place utility by helping in the distribution of products to the final consumers scattered over a wide geographical area
- Collecting Market Information– Act as a vital source of market information since they are in direct contact with consumers
- Help in Promotion- Manufacturers & wholesalers undertake sales promotion activities in order to increase the sale of their products. Retailers, by facilitating short term promotional activities like offering of coupons, free gifts, sales contests, etc help in promotion of the products.
The services offered by retailers to customers are:
- Regular Availability of Products– Maintain regular availability of various products produced by different manufacturers. This enables the buyers to choose from among a variety of products and buy them when needed.
- New Products Information– Make arrangement for effective display of products & increase the sale by personal selling efforts. Through this, they provide vital information about new arrivals, special features, etc. of new products to the consumers.
- Convenience in Buying– Sell goods in small quantities according to the requirements of their customers. Normally, they are situated near to the residential areas & remain open for long hours.
Q.20 ‘A departmental store is a large establishment aiming at satisfying practically every customer’s needs, under one roof.’ Comment upon the statement.
A departmental store is a large establishment offering a wide variety of goods. The whole store is divided into different departments. Almost every item of need can be found in these stores in well classified separate departments. For example, there may be separate departments for toiletries, medicines, furniture, groceries, electronics, clothing and dress material within a store. Thus, they satisfy diverse market segments with a wide variety of goods and services.
Q.21 How a consumer cooperative store can be started?
At least 10 people needed to start a consumer cooperative store. It is registered under the Cooperative Societies Act. The capital of a cooperative store is introduced by its members. The management of the store is democratic and entrusted to an elected managing committee where one man one vote is the rule. The liability of the members of a cooperative store is generally limited to the extent of the capital contributed by them.
Q.22 How payments are received in mail order business?
Generally following alternatives are available for receiving payments in mail order business:
- the customers may be asked to make full payment in advance.
- the goods may be sent by Value Payable Post (VPP). Under it, the goods are sent through post and are delivered to the customers only on making full payment.
- the goods may be sent through a bank, which is instructed to deliver the articles to the customers. In this arrangement there is no risk of bad debt, as the goods are handed over to the buyers only after making full payment.
Q.23 Distinguish between Departmental Stores and Multiple Shops.
Basis of Distinction
Located at central place for attracting a large number of buyers
Located at number of places, not necessary at central location
Range of Products
Aim at satisfying all the needs of customers as they carry a variety of products of different types under one roof
Aim to satisfying the needs of the customers relating to a specified range of their products only
Emphasis on providing maximum service to their customers like restaurant, restrooms, etc
Provide very limited service confined to guarantees & repairs of defective goods
Do not follow any fixed or uniform pricing policy, instead provide discounts on merchandise to clear stocks
Follow fixed prices of goods & uniform pricing policy for all the shops
Class of Customers
Cater to the high income group of customers who give importance to services provided more than prices
Cater to different types of customers, including lower income groups, who value quality at reasonable prices
May provide credit facilities to some of their regular customers
Sales are made strictly on cash basis
Q.24 Who are itinerant retailers? Explain some common types of retailers operating in India.
- Peddlers & Hawkers- Small producers or petty traders who carry their products on a bicycle, a hand cart, a cycle rickshaw or on their heads. They move from place to place or sell their products on the doorstep of the customers. They are found in the streets of residential areas, places of exhibitions, public areas, etc.
- Market Traders- Small retailers who open their shops at different places on fixed days or dates. They deal in one particular line of merchandise & low priced consumer items of daily use.
- Street Traders- Small retailers who are commonly found at places where huge population gathers. They sell consumer items of common use.
- Cheap Jacks- Petty retailers who have independent shops of temporary nature normally in a business locality. Depending upon the potentiality of the area, they keep on changing their business from locality to another and deal in services like repairing of watches, shoes, etc.
Q.25 Who are fixed shop retailers? State some common types of fixed shop small retailers.
Fixed shop retailersare those retail shops which maintain permanent establishments in selling their merchandise. They generally have large resources at their disposal.
- General Stores: These are commonly found in a local market & residential areas. They carry stocks of variety of products required for day to day needs of the consumers residing nearby. They remain open for long hours at convenient timings.
- Speciality Shops: They specialise in the sale of a specific line of products. These are generally located in a central place where a large number of customers can be attracted. They provide a wide choice to the customers in the selection of goods.
- Street Stall Holders: They are commonly found at street crossings or places where flow of traffic is heavy. They deal mainly in goods of cheap variety & attract floating customers. Total area covered by a stall is very limited, as a result, they handle goods on a very small scale.
- Second hand goods shop: Deal in secondhand or used goods like books, clothes, automobiles, furniture & other household goods. Goods are sold at lower prices.
Q.26 What is wholesale trade? State the functions performed by wholesalers.
The various functions of Wholesalers are:
- BUYING AND ASSEMBLING: The wholesaler helps in the collection of goods and bringing together the goods from various producers. It provides a variety of goods.
- STORING: There is a time gap between the production and consumption. So the wholesaler holds it in reserve. It stores the goods to supply to the retailers as and when required.
- TRANSPORTING: The wholesaler provides the facility of transporting from his warehouse to the place of retailer. They need transport service at the time of purchase and sale.
- FINANCING: The wholesaler performs an important function of financing the market process. He facilitates the producer by purchasing goods on cash and sells to retailer by providing it on credit.
- RISK BEARING: Most of the risks are borne by the wholesaler. He provides protection to the retailer against changing of price, spoilage, damage & theft.
- GRADING AND PACKAGING: Wholesalers sort different products according to their size and quality. They all do the packing for the retailers.
- MARKETING INFORMATION: Wholesalers provide the marketing information to their producer. It gives the idea about the taste, fashion, trend prevailing in the market so the producer can produce according to the need of market.
Q.27 Explain the services which wholesalers provide to manufacturers.
The services provided by wholesalers to manufacturers are:
i. Facilitate Large Scale Production- Wholesalers collect small orders from a number of retailers & consequently make purchases in large quantities from manufacturers. Manufacturers can make use of economies of scale.
ii. Bear Risk- Wholesalers take title & delivery of the goods and store them in their warehouses. They bear risk of- theft, pilferage, spoilage, etc.
iii. Financial Assistance- They provide financial assistance by generally purchasing the goods on cash. Manufacturers need not block their capital in maintaining stocks.
v. Expert Advice- Wholesalers advise the manufacturers about various aspects of the consumer like tastes & preferences, as they are in direct contact with the retailers.
vi. Storage- By taking delivery of goods from the factory & keeping them in godowns/warehouses, wholesalers reduce burden of manufacturers of providing for storage facilities for the finished goods.
Q.28 Describe the advantages of Departmental Store.
The advantages of departmental store are:
- SHOPPING CONVENIENCE: A departmental makes the shopping easy because all types of goods are available under one roof. It saves time and labour.
- CHOICE OF PRODUCTS: It offers a large variety of products different designs, colour, and style. A customer can make a good selection of goods.
- SERVICES TO CUSTOMERS: Departmental stores provide various types of services to customers. They extend liberal credit, accept telephone orders, and provide free delivery services. They provide facilities of rest rooms; play rooms post and telegraph office.
- ECONOMIES OF LARGE SCALE: Being a large scale organisation it enjoys all advantages and economies of large organisation. Price may be lower due to economies.
- MUTUAL ADVERTISEMENT: One department of store advertises for others. Most of customers pass through more than one department.
- CENTRAL LOCATION: The stores are generally located at the central location of the city. It is accessible to large number of customers.
- RISK: The risk is spread over in many departments. If there is loss in one department it can be compensated from other departments.
- EXPERT SERVICES: Being a large organisation it can employ experts in various fields.
Q.29 Give a brief note on super markets.
The super markets are large scale retailing business units. These markets sell a wide variety of consumer goods. The goods traded are generally of low cost and daily use items such as food products, grocery items, utensils, clothes, electronic appliances, household goods, and medicines. Super markets are generally situated at the main shopping centres in urban areas. Goods are kept on racks with clearly labelled price and quality tags in such stores. The customers move into the store to pick up goods of their requirements, bring them to the cash counter, make payment and take home the delivery.
Q.30 Explain advantages and limitations of super market.
The advantages of super market are as follows:
i. ECONOMIES OF LARGE SCALE: A super market makes its purchases in huge quantities directly from manufacturer or wholesaler. It gets all the economies of large scale selling and administration.
ii. CHOICE OF SELECTION: As the store does not have any salesman the customer gets the freedom of picking up the products of their choice
iii. CONVENIENCE TO CUSTOMERS: It is very convenient to customers. They get maximum goods of their requirements in the super market. Buyer is at ease and gets sufficient time for selection. Goods are properly packed and labeled.
iv. NO RISK OF BAD DEBTS: As the sales are on cash basis so there is no risk of bad debts.
i. IMPERSONAL: In some goods the advice of salesman is required but it lacks in case of supermarket.
ii. NO CREDIT FACILITIES: Sales are made on cash basis. There is no credit facility
iii. MISHANDLING OF GOODS: Customers may handle the goods carelessly, which add to the operational costs.
iv. HIGH COST OF ADMINISTRATION: Super market requires a large administration due to this cost is high and it shows financial losses.
Q.31 What is a consumer cooperative store? State its limitations.
A consumer cooperative store is an association organised by consumers to obtain their requirement by purchasing in bulk and selling through their stores owned, managed and controlled by themselves. It is a retail trading organisation formed by private consumers to purchase products or services at favorable prices.
Followings are the limitations of consumer cooperative stores:
- These storesare funded by their members who are consumers. The membership is limited and the stores depend for funds only on members who have only small amount of funds to invest. This comes in the way of growth and expansion of the cooperative stores.
- Generally these stores are managed by members on honorary basis. There is a lack of sufficient initiative and motivation amongst them to work more effectively.
- The members of the cooperative stores generally do not shop at them regularly. As a result of this, the stores are not able to operate successfully.
- The people managing cooperative stores are not trained in running the stores efficiently. It affects the working of these stores.
Q.32 Explain advantages and limitations of the consumer’s cooperative store.
The advantages of consumer cooperative store are as follows:
– GOODS OF BETTER QUALITY: The consumer gets the assured goods of the best quality of goods
– COMPLETE CONTROL ON CONSUMERS: The store is owned managed and control by the consumer. Store is guided for the welfare of consumers
– ECONOMY: There are low managerial expenses and no bad debts. Store can be operated with smaller capital.
– NO MIDDLEMAN: The store eliminates middleman and their profit up to a certain extent
- LIMITED FINANCIAL RESOURCES: As the members belong to middle class income group so the capital investment is limited and a huge amount is not invested
- LACK OF SPECIALISATION: Cooperatives store do not enjoy the economies. Due to lack of specialisation they cannot have economies of specialisation.
- LIMITED BUSINESS: Cooperative store has a very limited business because of lack of advertisement. They generally supply goods to their own members
- LACK OF SOUND MANAGEMENT: The management is generally not so strong and they lack experience and managerial skills
Q.33 Explain the role of Indian Chambers of Commerce and Industry in promotion of Internal Trade.
Indian Chambers of Commerce and Industry helps in strengthening the internal trade. These Chambers interact with the Government to place the policies, which help to reduce the trouble and introduce transparency.
The Chambers helps in the following areas:
i. Interstate movement of goods: The Chambers of Commerce help in movement of goods interstate. FICCI helps in registration of vehicles, construction of highways and roads etc.
ii. Octroi and other local levies: Chamber of commerce ensures that the imposition of taxes is not at the cost of smooth transportation & local trade.
iii. Balance of sales tax and Value Added tax (VAT): The chamber suggests policies regarding sales tax and VAT to rationalise & harmonise the sales tax structure in different states, to promote balance in trade.
iv. Weights and measures & prevention of duplication brands: The Chambers Interact with government to formulate laws relating to- weights & measures and protection of brands, to ensure protection of interests of consumers & traders and to take action against those who violate the rules & regulations.
v. Excise duty: Chamber of commerce interacts with the government for ensuring streamlining of excise duties
vi. Sound infrastructure: The Chamber interacts with the government for construction of roads, airports, and railway stations. Sound infrastructure is essential for the smooth flow of trade.
vii. Labour legislation: The Chamber of Commerce interacts with the government to formulate the labour laws, wage act, etc.
Q.34 ‘Multiple shops are offering various advantages to the consumers.’ Give some points to support the statement.
Multiple shops offer following advantages to the consumers:
Economies of large scale: These shops are run by a single business organisation. The organisation purchases goods in large quantities and supply to the shops at different places. As there is central procurement, the multiple shop organisations enjoy the economies of scale.
Elimination of middlemen: The multiple shop organisations sell goods directly to the consumers and it either purchases goods from the producers or produce the goods itself. Thus the multiple-shop organisation is able to eliminate unnecessary middlemen in the sale of goods and services.
No bad debts: Mostly all the sales in these shops are made on cash basis. No credit sales are made; as a result there are no losses on account of bad debts.
Transfer of goods: These organisations have several multiple shops at different places. The goods not in demand in a particular locality may be transferred to another locality where it is in demand. This reduces the chances of dead stock in these shops.
Diffusion of risk: It is possible sometimes due to some specific reasons some of the shops may not earning profits. In such cases the losses incurred by one shop may be covered by profits in other shops, reducing the total risk of an organisation.
Flexibility: These organisations have many shops at different places. If a shop is not operating at a profit, the management may decide to close it or shift it to some other place without really affecting the profitability of the organisation as a whole.
Q.35 Name any two organisations which have played a major role in strengthening trade in India.
i. Federation of Indian Chambers of Commerce & Industry (FICCI)
ii. Confederation of Indian Industry (CII)
Q.36 Jay plans to start his own business of selling coffee, juices, chocolates, small snack items, etc. in offices and other working places through portable self-service outlets.. He does not want to employ any staff members.
(i) What type of trade is being conducted by Jay?
(II) Which type of business identified in (i) above should be started by Jay.
(i) The type trade being conducted by Jay is retail trade. Retail trade is the trade in which a trader purchases goods from wholesalers or producers or agents, and sells them in small quantities to the ultimate consumers.
(ii) The type of business that should be started by Jay is Vending machine. A vending machine is a direct and new form of retail trade in which the machine is operated by coins or tokens. These machines can be seen at petrol pumps, railway stations, airports for selling cold drinks, milk, etc.
It involves following features:
- It helps in sale of pre-packed brands of low-priced products.
- It enables buying round the clock.
- There is fresh supply of goods with uniform weight and quality available to the customers.
- It does not require any salesperson.
Q.37 Green Foods Corporation deals in the sale of food products like wheat, grams, mustard, etc. The company has an agreement with a manufacturing firm that supply directly fresh agriculture products to Green Foods. The company then sells these products to it in different quantities to retail traders like grocery stores, departmental stores, etc. who sell fresh vegetables to consumers.
(i) Identify what type of trader is Green Foods corporation.
(ii) State the services provided to manufacturers by type of trader identified in (i) above.
(i) Green Foods Corporation can be categorised as wholesale traders.
Wholesale trade refers to the purchase and sale of goods and services in large quantities for the purpose of resale to retailers or for intermediate use. The people engaged in such trade are known as wholesalers.
(ii) Services provided by wholesalers to manufacturers include following:
- Facilitating large scale production: They collect small orders from number of retailers, pass on these orders to the producers and make purchases in large quantities and enable manufacturers to undertake production on a large scale to benefit from economies of scale
- Bearing risk: Wholesalers take title and delivery of the goods and store them in their warehouses. They bear the risk of Theft, Pilferage, Spoilage, Fire, etc.
- Financial assistance: They provide financial assistance by generally purchasing goods on cash and relieve manufacturers from blocking their capital for maintaining stocks.
- Expert advice: They provide information from retailers to manufacturers about various aspects of consumers like tastes & preferences and serve as an important source of market information like market conditions, competitive activities, etc.
- Help in marketing function: They take care about the distribution of goods and relieve manufacturers from the burden of marketing activities and enable manufacturers to focus on the production activity.
Q.38 Ambree Limited is a manufacturer ethnic wear for both men and women. The company has its shops open at different locations in India. The policy of the company includes sale of goods on cash basis only. Also, all the stores have identical theme and decorations. The prices of all of its clothing products are fixed. In this way, the company is able to reduce the unnecessary involvement of middlemen so that consumers can be benefitted.
(a) Identify and explain the type of shop referred in the above case.
(b) State the characteristics of such shops describe in (i) above.
(a) Ambree Limited can be categorised as a chain store or multiple shop.
A chain stores involves number of shops that have similar look and are established in places spread over different parts of the country. These shops normally deal in standardised and branded consumer products that have a rapid sales turnover. These shops are operated by the same organisation and have identical merchandising strategies, with identical products and displays
(b) Characteristics of Chain Stores are as follows:
- These are located in fairly populated localities where sufficient number of customers can be served nearest to their residence or work place
- The prices of goods are fixed and are sold on cash basis.
- There is centralised manufacturing of products at the head office for all retail units.
- It also leads to savings in the cost of operations as compared to individual stores
- Direct supervision of each retail shop lies with the branch manager.
- Branch manager sends daily reports regarding sales, cash deposits and stock requirements to Head Office.
- The Head Office controls the branches and is concerned with formulation and implementation of policies.
Q.39 Different business firms come together to form associations that aim to protect the interest of businessmen and strengthen the retail and wholesale trade. These associations support industry and commerce and express their strong opinions with government to liberalise trading policies and reduce trade barriers.
- Identify and name any two such associations working in your country.
- State the catalytic role played by such associations in promoting the importance of internal trade.
(i) The associations of business and industrial houses are formed to promote and protect common interest and goals of internal trade business.
These associations in India are:
- Associated Chamber of Commerce & Industry (ASSOCHAM)
- Confederation of Indian Industry (CII)
- Federation of Indian Chambers of Commerce & Industry (FICCI)
(ii) Indian Chambers of Commerce and Industry helps in strengthening the internal trade. These Chambers interact with the Government to place the policies, which help to reduce the trouble and introduce transparency.
The catalytic role played by Chambers is:
- Interstate movement of goods: The Chambers of Commerce help in movement of goods interstate. FICCI helps in registration of vehicles, construction of highways and roads etc.
- Balance of sales tax: The chamber suggests policies regarding sales tax to rationalise and harmonise the tax structure in different states, to promote balance in trade.
- Weights and measures and prevention of duplication brands: The Chambers Interact with government to formulate laws relating to- weights and measures and protection of brands, to ensure protection of interests of consumers and traders and to take action against those who violate the rules and regulations.
- Excise duty: Chamber of commerce interacts with the government for ensuring streamlining of excise duties
- Sound infrastructure: The Chamber interacts with the government for construction of roads, airports, and railway stations. Sound infrastructure is essential for the smooth flow of trade.
- Labour legislation: The Chamber of Commerce interacts with the government to formulate the labour laws, wage act, etc.
Q.40 Aman observed that many retail stores sell goods to consumers at high prices so as to earn large profits. So, Aman along with 15 other people decided to open a store that would aim at selling good quality products at reasonable prices. To achieve this, Aman and other members decided to buy the goods in bulk amount from manufacturers and directly sell them to consumers. Also, the profits that would be earned by the store would be distributed as bonus to members.
- Identify the type of store that was setup by Aman along with other members.
- State the benefits of the type of store specified in (i) above.
(i) The type of store setup by Aman along with other members is a consumer cooperative store.
A consumer cooperative store is an association organised by consumers to obtain their requirement by purchasing in bulk and selling through their stores owned, managed and controlled by themselves. It is a retail trading organisation formed by private consumers to purchase products or services at favorable prices.
(ii) Benefits of consumer cooperative store are:
- Easy to form: Consumer cooperative store are easy to form as people voluntary come together and form a cooperative and get registered under the cooperative societies act.
- Limited liability: The liability of members is limited to the extent of capital contributed by them and they are not personally liable for the debts.
- Low prices: The goods offered by cooperative stores are bought directly from manufacturers and sold to consumers at low prices.
- Convenient location: These stores are located convenient public places where consumers as well as members can easily buy goods.
Q.41 Realters Pvt. Ltd. always distributes its products to wholesalers Instead of individual retailers. It is of the opinion that wholesalers provide them better benefits as compared to others. Why?
There are several services that wholesalers provide to their manufacturers. These are:
- Encourage large scale production: Wholesalers buy in bulk quantities to distribute goods to large number of small retailers. This helps manufacturer to produce on large scale.
- Undertake risk: Wholesalers keep the goods in their own warehouses and deal in their own name. They also bear risk of fall in prices, theft, pilferage, spoilage, fire, etc.
- Financial help: The wholesalers generally make cash payment for the goods purchased by them.
- Expert advice: Wholesalers advice manufacturers about various aspects including customer’s tastes and preferences, market conditions, competitive activities and the features preferred by the buyers as they are in direct contact with retailers.
- Storage: Wholesalers provide time utility by keeping the goods purchased in their godowns/warehouses. This in turn reduces the burden of manufacturers of providing for storage facilities for the finished products.
Q.42 Paul is a manufacturer of toys. He has his manufacturing unit in Goa and he supplies toys to dealers in Mahrashtra. Is this a taxable event?
GST is the indirect tax in India levied on supply of goods and services. A taxable event in the GST is supply of goods or services or both.
Q.43 GST is related to supply, manufacture or sale of goods and services.
GST is a destination based single tax on supply of goods and services from manufacturer to consumer
Q.44 How many indirect taxes have been replaces after the introduction of GST?
GST has replaced 17 indirect taxes (8 Central + 9 State levels)
Q.45 Which internal trade document is also known as interim invoice?
Proforma invoice is known as interim invoice.
Q.46 With the launch of GST, the price of many goods and services have changed. Some goods have become expensive while some have become cheaper. State the impact of GST on luxurious goods.
With the introduction of GST, luxury goods have become more expensive for the masses.
Q.47 State true or false.
Cost, insurance and freight involves documents that relates to taking into consideration the mistakes and errors that have been overlooked or forgotten.
E&OE (errors and omissions excepted) involves documents that relates to taking into consideration the mistakes and errors that have been overlooked or forgotten.
Q.48 KL Traders owns a transportation business. They had to deliver goods to another state. The trading firm was required to pay GST. State the mode of payment that can be used by KL traders for payment of GST.
Business firms can pay for GST using different modes of payment like debit cards, credit cards, electronic funds transfer methods, and internet banking.
Q.49 Under free on board (FOB) contract, who is responsible to pay for expenses until the goods are delivered to the destination?
Free on Board or Free on Rail (FOB or FOR): It is the agreement between the buyer and seller stating that the expenditure incurred till the delivery of goods (through ship, rail etc.) would be paid by the seller.
Q.50 How has GST unified the country into a unified market?
GST is levied on the supply of goods and services from the producer to the consumer and as eliminated previous multiple indirect taxes that were imposed by the central and state governments. This has made the country into a unified market.
Q.51 State true or false.
A good which is manufactured in one Delhi and is then moved to Mumbai, where the buyer pays the tax. As per GST rules, only state government will have share in this tax.
GST is destination based tax and not deducted at source. A good which is manufactured in one Delhi and is then moved to Mumbai, where the buyer pays the tax. As per GST rules, both centre and state government will have share in this tax.
Q.52 “Anti-profiteering measure is one of the key features of the Goods and Services Tax law.” Discuss.
Anti-profiteering measure helps in prevention of making excess profits by the business firms. The GST along with the input tax credit aims at getting the prices down. Also, National Anti-profiteering Authority (NAA) has been established to make sure that the advantages enjoyed by business firms due low cost are passed on to the consumers. In case a business firm increase prices stating GST as the cause, then NAA will check the firm’s prices.
Q.53 Jake owns a business firm that sells tyres to other automobile firms. One of his clients demanded an urgent delivery of 30 tyres on credit basis. Jake issued a document that contained details regarding the consignment of 30 tyres. The document was sent to the buyer stating the details regarding the amount of the consignment. Which document for trade is being issued by Jake in the above case?
The document issued by Jake in the above case is Invoice.
An invoice is a document issued by seller, in case of credit purchases in which particulars of the goods bought by the buyer with respect to the quantity, quality, prices, cost, tax, trade discount, etc. are stated.
It is also known as a bill or memo. The buyer gets the required information about the price he has to pay to the seller with the details specified in the invoice only.
Q.54 Rohan is a trader in Assam who sold goods to Jerry who is another trader in Assam. The GST rate is 18% which comprises of CGST rate and SGST rate of 9%. In such case, the Rohan will collect the money, out of which some share will go to the Central Government and some will go to the state government. Explain the meaning of CGST and SGST.
Under GST regime, the tax which is levied on intra-state supply of goods and services by the central government is known as CGST and is governed by the CGST Act.
SGST is the tax levied on the same intra-state supply of goods and service by the specified state government and is governed under SGST Act.
This state that both the central and state governments mutually agree on combining their taxes levy with respect to particular proportion for revenue being shared by both them.
Q.55 Green Petals supplies clothing material to many different firms. One of the client of the company ordered a large bulk of clothing material and paid for it in advance. But, on delivery of goods, the debtor was not satisfied with the quality of material received and decided to send the goods back. The debtor issued a document stating the quantity and price of goods to be returned.
(i). Which document of trade is being issued by the debtor?
(ii). Enlist any 3 important documents that are required for internal trade.
(i) The document of trade issued by the debtor is Debtor note.
A debtor note is a document issued by the buyer to the seller. It specifies that the account of seller is debited by the amount mentioned with respect to the return of goods. It also specifies the quantity, price and value of goods returned.
(ii) Important documents that are required for internal trade are:
- Credit note: A document issued by the seller to the buyer specifying that the buyer’s account is credited by the amount as per the acceptance of buyer’s claim made regarding the return of goods.
- Lorry receipt: It is a document issued by the transport company regarding the goods being accepted by it for delivery. It is also referred to as transport receipt (TR) and Bilty.
- Railway receipt: It is a document issued by the Railways for acceptance of goods to be delivered from one station to another.
Q.56 Explain the constitution of GST council.
The GST council constitutes following:
- The finance minister is the chairperson of the GST council and the vice chairperson is selected from the Ministers of State Government.
- The members involve MoS (Finance) and all the Ministers of Finance/Taxation of each state
- The quorum requires 50% of total members
- Also, the states have two-third weightage and Centre has one-third weightage and the decision is taken by 75% majority.
- The Council also makes recommendations on everything related to GST including, rules and rates, etc.
Q.57 Kiara plans to start her own business of sale of cosmetic products. She entered into a contract with a local cosmetic manufacturer who agreed to supply products, which would be sold by Kiara through e-commerce website. The manufacturer asked Kiara about whether she wants to specify cost, insurance and freight charges in their agreement or not. However, Kiara was not aware about such terms and asked the manufacturer about different terms required for internal trade.
- What does cost, insurance and freight implies in internal trade?
- State some other important terms of trade that the manufacturer would have explained to Kiara.
(i) Cost, Insurance and Freight (CIF): It refers to the cost of goods along with the cost of insurance and freight charges which are to be paid on goods till the destination place.
(ii) Some other important terms of trade that the manufacturer would have explained to Kiara are:
- Cash on delivery (COD): It involves payment of goods made during the time of delivery of goods. In case the buyer fails to make payment, the goods are returned to the seller.
- Free on Board or Free on Rail (FOB or FOR): It is the agreement between the buyer and seller stating that the expenditure incurred till the delivery of goods (through ship, rail etc.) would be paid by the seller.
- E&OE (errors and omissions excepted) involves documents that relates to taking into consideration the mistakes and errors that have been overlooked or forgotten.
Q.58 On 1st July, 2017, the GST was launched by the President of India, and the Government of India. Both the houses of parliament convened sessions at the Central Hall of the Parliament which was attended by elite guests from the business industry. The new tax regime was highly criticised was as it was predicted that it would affect middle and lower income people. After the launch of GST, the tax rates have been amended many times by a panel that involves federal and state finance ministers.
- State some of the important characteristics of GST.
- Despite criticism, enlist how GST is beneficial for people?
(i) Some important characteristics of GST are:
- It is applicable on supply of goods or services in opposite to the current tax on the manufacture or sale of goods or on the provision of services.
- The principle followed under GST regime is destination-based consumption tax against the current principle of origin-based taxation.
- Under GST, the Import of goods and services is considered as inter-state supplies and is subject to IGST in addition to the applicable customs duties.
- The rates levied under CGST, SGST and IGST are mutually decided by the centre and the states under the aegis of the GST Council.
- It involves four tax slabs namely 5%, 12%, 18% and 28% for all goods or services.
(ii) GST is beneficial for people as:
- It involves reduction in overall tax burden along with no hidden taxes
- It aims at maintaining harmonises national market for all goods and services.
- People will have more disposable income in their hands
- There would be increase in economic activity in the country.
Q.59 What type of goods can be sold through vending machines?
Vending machines can be used for selling pre-packed brands of low priced goods having high turnover and are uniform in size and weight.
Q.60 State true and false
The products that are sold in supermarkets are basically food products and low cost daily use consumer products like grocery, clothing, household electronic appliances and personal care products.
In supermarkets, products which are sold are generally low priced branded goods and are food products, grocery items, stationery, utensils, clothes, electronic appliances, household goods, and medicines.
Q.61 Big brands like Reebok has established numerous stores across numerous locations. These stores located at different places follow similar guidelines and strategies, Identify the type of store described here.
The type of store described here is Chain store.
A chain store involves a number of shops that have same appearance and are setup in in localities which are spread over different parts of the country. These stores have standardised and branded consumer products and follow same merchandising strategies with identical products and displays.
Q.62 “Everything from a pin to an elephant’ is the spirit behind which type of retail store?
“Everything from a pin to an elephant’ is the spirit behind establishment of a departmental store.
Q.63 Yellow Sugar is a large super markets. The store has different departments catering to the different needs of customers like daily use products for personal care, skin care, etc., kitchen appliances, food products, ready to make products, etc. Can you state some of the features that define retail outlets like supermarkets?
Some features that define retail outlets like supermarkets are:
- These establishments follow the principle of self-service and hence they incur low distribution cost.
- The cost of the products sold in these market are lower than other types of retail stores due to goods being purchased in bulk leading to low operational cost and low profit margins.
- These are generally setup at central locations so as to earn high turnover
Q.64 Nia placed an order of a vacuum cleaner after seeing in catalogue. The specification of the product with respect to features, colour, price, etc. was stated in the catalogue. Also, at the back, it was specifically stated that the delivery of the order delivery will be based on valuable payable post Explain the type of retail trade discussed in given case.
The type of retail trade discussed in above case is mail order houses.
A mail order house is a retail outlet that sell its products through mail, without having any direct personal contact with the customers.
For obtaining orders, the customers are reached through circulars, brochures, catalogues, advertisements in newspapers or magazines and price lists which are sent through post.
After getting the orders, the goods are sent as per the specifications through the post or by value payable post (VPP), which involves delivery of products through post to the customers only on making full payment for the same.
Q.65 Red Mobiles is a smartphone maker. It has its stores located across various cities like Delhi, Bombay, Kolkata, Chennai, Bengaluru and Hyderabad. The company is known for selling unique red-coloured smartphones products. To maintain a brand recall, the company has setup identical store theme across all its shops located at different places.
(i) What type of retail store is being highlighted in above case?
(ii) State some of the features of such type of stores.
(i) Amber and Co. is a chain store or multiple shop.
A chain store involves a number of shops that have same appearance and are setup in in localities which are spread over different parts of the country. These stores have standardised and branded consumer products, which have good sales turnover. These shops are managed by same organisation and have same merchandising strategies with identical products and displays.
(ii) Characteristics of chain stores are:
- They are established in populated localities where large number of customers can be reached.
- The cost of products sold in these shops are fixed and generally sold on cash basis.
- They are controlled by the head office who states and formulates policies to be followed by each chain store.
- They have a centralised head office that despatches goods to each of these shops and these are directly supervised by of a branch manager responsible for its day to-day management
Q.66 Shoppers Stop is a large retail store chain which is owned by K. Raheja Corp. It has over 85 stores across 40 cities in India. It sells variety of products like accessories, handbags, clothing, cosmetics, perfumes, shoes, jewellery, health and wellness products and home furnishing products. It has different departments catering to different needs of the consumers. It basically serves as a one stop destination for fashion needs of families.
(i) Which type of store can Shoppers Stop be classified as?
(ii) List some of the merits and demerits of such stores like Shoppers Stop
(i) Shoppers Stop can be classified as a departmental store.
A departmental store is a large retail outlet that offers a huge range of products, categorised under well-defined departments that aims to fulfil every need of the consumers.
(ii) Merits of departmental store:
- Attractive services: A departmental store provides many services like delivery of goods, personalised shopping, grant credit facilities, etc. which attract the attention of customers.
- Economy of large-scale operations: These stores are very large in scale and operations, hence many advantages, especially concerning purchase of goods are available to them.
- Sales promotion: These stores spend good amount of money on advertising and other promotional activities that increase the sales and revenue of the store like discount, refunds, combo offers, etc.
Demerits of departmental store are:
- Lack of personal attention: Due to large-scale operations, it is not easy to give personal attention to each and every customer visiting the store.
- High operating cost: Since these store provide many services, their operating costs tend to be higher which makes the prices of the goods high.
- High possibility of loss: Due to high operating costs and large scale operations, the risk of incurring losses in a departmental store are high.
Q.67 FreeBuzz Electricals is a large firm that sells electronic goods to other small business firms and buy such goods in large amounts from the producer. State the type of trader that Freebuzz Electricals that can be called as.
Freebuzz Electricals that can be called as a wholesaler. A wholesaler is a type of trader who buys and sells goods in large amounts for further sale or commercial use of product.
Q.68 Give the full form of FICCI.
FICCI refers to Federation of Indian Chambers of Commerce and Industry.
Q.69 State true or false.
Wholesaling involves activities of people or firms selling to retailers or merchants or other industrial and commercial users but do not sell in large amounts to the final consumers.
Wholesalers conduct activities that involve selling of goods in large quantities to retailers, merchants, industrial and commercial users but do not sell goods to final consumers in such significant quantities.
Q.70 How does chambers of Commerce and Industry help in providing good infrastructural facilities for internal trade?
The chambers of Commerce and Industry trade associations interacts with government and discuss about investment in infrastructure projects.
Q.71 Orange Furniture is a large wholesaler. The company sells its products with the help of retail stores that deal in home furnishing products. The retailers are able to share risks with the Orange Furniture, in case there is any loss. Can you explain how wholesalers help retailers in share of risk?
Wholesalers buy goods in bulk and sell in small quantity to the retailers.
The retailers are able to buy goods in limited amount which helps them to avoid any risk that can arise due to storage, pilferage, obsolescence, fall in prices and change in demand and consumer preferences.
Also, retailers would have to incur more cost, in case they have to purchase goods in large quantities in absence of service provided by wholesalers.
Q.72 Explain the function performed by wholesalers that help retailers in maintaining availability of goods and marketing of goods.
Availability of goods:
Retailers have to ensure that accurate amount of stock of goods is maintained so that large variety of choices can be offered to the consumers. To do so, the retailers buy goods from the wholesalers. The wholesalers ensures availability of goods by buying them time to time from the manufacturer
The wholesalers undertake various marketing activities and help the retailers in sae of goods. They help in advertising of goods and other sales promotion techniques like combo offers, samples, etc. which attracts consumers to buy the goods. The retailers are able to benefit as the demand for goods increases.
Q.73 Suri and Sons is a Delhi based wholesaler. The company distributes jewellery to different states. The company has a contract with a large jewellery manufacturer. They entered into an agreement which stated that the Suri and Sons will pay the manufacturer only after they receive the payment from its clients. How does wholesalers like Suri and Sons help the companies manufacturing goods?
The wholesalers help the manufacturers by providing following services:
- Facilitating large scale production: The wholesalers collect orders from a number of retailers and pass such orders to the manufacturers and buy goods from them in bulk quantities.
- Bears risk: The wholesalers deal in goods in their own name, take delivery of the goods and stores goods in their warehouses and hence are exposed to variety of risks such as the risk of fall in prices, theft, spoilage, fire, etc.
- Financial assistance: Wholesalers generally make cash payment for the goods bought by and the manufacturers need not block their funds in inventory.
- Expert advice: As the wholesalers directly deal with retailers, they are in a position to understand and advice the manufacturers about customer’s tastes and preferences, market conditions, competition, etc.
- Marketing support: Wholesaler helps the manufacturers by conducting marketing activities and take care of the distribution activities to retailers and sale of goods to large number of consumers.
Q.74 “Commerce and trade associations like ASSOCHAM, FICCI, CII, etc. play a catalytic role in making internal trade a significant part of economy”. Explain.
The role played by commerce and trade associations like ASSOCHAM, FICCI, CII, etc. play making internal trade a significant part of economy can be stated as follows:
- Interstate movement of goods: The Chambers of Commerce and Industry help in matters related to interstate movement of goods which involves registration of vehicles, transportation policies, construction of highways and roads, etc.
- Harmonisation of sales tax structure: The Chambers of Commerce and Industry interact with government authorise so as to harmonise the sales tax structure in different states and maintain a rational sales tax structure of the sales tax so as to promote trade.
- Octroi and local taxes: Octroi and local taxes generate revenue for the local government. The Chambers of Commerce helps in ensuring that levy of such taxes doesn’t affect the cost of transportation and local trade.
- Marketing of agro products and related issues: The associations play a crucial role in the marketing of agro products. They streamline the local subsidies and marketing policies. The Chambers of Commerce and Industry interacts with concerned agencies like farming cooperatives.
- Weights and measures and prevention of duplication brands: The Chambers of Commerce and Industry along with government formulate laws that prevents duplication of trade and take strict action against traders not following such laws.
- Labour legislation: The Chambers of Commerce and Industry and the government discuss matters relating to labour laws, retrenchment etc. on continuous basis so as to protect the interest of labour.
Q.75 What type of goods are generally sold by peddlers and hawkers?
The peddlers and hawkers are indulged in sale of non-standardised and low-value products like vegetables and fruits, street snacks, ice creams, etc.
Q.76 State true and false
Retailers help manufacturers and wholesalers in removing the hindrance of place.
One of the main services provided by retailers to wholesalers and manufacturers is distribution and sale of goods to the final customers who are scattered over different locations. Hence, they provide place utility i.e. helps in removing hindrance of place.
Q.77 GC Electrical Store sells washing machine. The retailers aims to earn goodwill in the market and hence provides services like free first service, extended warranty, membership discount, etc. to consumers so that they are satisfied. Which service of retailers to consumers is highlighted here?
The service of retailers provided to consumers in above case is after sales service.
After-sales services are offered by retailers in the form of home delivery, increasing warranty of the product at discount prices, offering cashback offers, etc. so as to ensure repeated purchase from the consumers.
Q.78 Blue Bells Fashion Store is a retail store that deals in sale of clothing products and sells only garments for kids. Under which category of fixed retailers, can the Blue Bells Fashion store be categorised as?
Blue Bells Fashion store can be categorised as Speciality shop. This type of shops deal in sale of particular line of products like toys, gadgets, books, children clothing, women garments, etc.
Q.79 Emerald Furniture is a second hand good shop that sells high quality and luxury furniture which are used by large business firms. The store sells the furniture at discounted prices to the customers. Can you state the characteristics possessed by such shops like Emerald Furniture?
The characteristics possessed by second hand goods shops like Emerald Furniture are:
- The second hand goods shop sell products which are already used like automobiles, books, furniture, household goods, etc.
- These shops sells products at low and reasonable prices. In case of products which are considered as antique and collectibles, higher prices are charged.
- These are located at street crossings or in crowded streets having a stall to display and little infrastructure.
Q.80 “The retailers help the manufacturers and wholesalers in promotion of products”. Discuss
To promote their products, manufacturers and wholesalers engage in activities that aim to increase the sale of their products.
The retailers also indulge in such advertising and promotional activities and further encourage sale of products. They assist the manufacturers and wholesalers by offering discounts, refunds, free gifts, etc. to the consumers.
Q.81 Brown Goods is a retail store that sells daily use products like shampoos, toothpaste, soaps, chocolates, biscuits, etc. the store is opens from 8am to 9 pm and also offers home delivery services to nearby local residents.
(i). Name and explain the type of retail store reflected in the case.
(ii). State the features of such type of retail stores.
(i) The type of retail store reflected in the case is general store.
A general store sells goods required for daily consumption like grocery items, stationery items, eatables, etc. and are located in residential areas with long opening hours.
(ii) The features of general stores are:
- These stores are opened for long hours at convenient timings for customers.
- They provide ease to consumers as they make goods available to consumers required on regular basis.
- They also offer credit facilities to their regular customers.
Q.82 Harry is a retailer engaged in business of selling mobile phones. He owns a large store that offers smartphones of different brands like Apple, Samsung, Oppo, Lenovo, Motorola, Xiaomi, etc. He buys these smartphones from wholesalers dealing in sale of these products. Also, due to original products being sold, Harry’s store has a good reputation. Many customers prefer to buy products from Harry as he offers good services and discounts also.
(i) Explain the type of trade being conducted in the above case
(ii) State the services provided to consumers by Harry.
(i) The type of trade being conducted by Harry in above case is retail trade.
Retail trade involves sale of goods and services to the final consumers for their personal and non-business uses.
(ii) The services provided to consumers by Harry as a retailer are:
- Information about new products: Retailers engage in display of products and personal selling efforts which provides important information about the new products being introduced in the market.
- Convenience in buying: Retail stores located nearby like in local markets, residential areas, etc., it is easy for customers buy products as per their requirements.
- Wide choice of goods: The retailers offers a wide variety of goods to consumers by selling goods from different producers and manufacturers.
- After sales service: These are offered by retailers in the form of home delivery, increasing warranty of the product at discount prices, offering cashback offers, etc. so as to ensure repeated purchase from the consumers.
Q.83 State and explain the type of itinerant trader in the following cases:
- Gaurav is a small retailer and sells cheap plastic products like boxes, plates, etc. near a bus stand
- Rama is a petty trader who repair watches. He generally moves his shop from one place to another, in case there is less potential.
- Manav is a trader who sells cutlery items for households at low prices. He opens his shop on particular days in different residential locations.
(i) Gaurav can be categorised as a street trader.
They are the retailers who sell consumer items of common use like stationery items, eatables, readymade garments, newspapers and magazine, etc. and are commonly located at places where large population gathers like near railway stations, bus stands, etc.
(ii) Rama is a cheap jack retailer.
Cheap jacks are those retailers who have individual shops of a temporary nature in a business locality. They change their area of business from one locality to another, according to the potential of the area. They sell common consumer goods and services like buckets, repair of watches, shoes, etc.
a) Rama can be categorised as a market trader
Market traders are small retailers who open their shops at different places on fixed days or dates. They sell goods to low income group of customers at low prices. They can sell particular type of goods like stationery, fabric materials, etc. or can be general merchant traders.
Q.84 Vending machines have made availability of wide range of products easy and convenient for customers. They have promoted the concept of self-service technology worldwide. One of the biggest example is the banking ATM. Initially with the setup of first ATM’s, many bankers were hesitant, but today there are more than 3 million ATM’s established all around the world.
State some of the reasons that led to success of these vending machines.
Following reasons are responsible for success of setting up of Vending machines:
Special packs have to be developed for the machines.
- Easy and convenient for customers which made them buy goods from these machines
- Quick service with 24*7 facility which made availability of services like cash withdrawals, bill payment, issue of tickets, etc.
- Setting up of vending machines doesn’t require much space as compared to other physical stores
- Located at small distances and near offices, service stations, shopping area, etc.
Q.85 Kanan wants to open a mail order house retail business. he searched about the scope and nature of these kind of stores and decided to sell goods through catalogues and posts. But he was doubtful about the success of these retail stores so he decided to further search and analyse the type of goods that will be suitable for such business.
According to you, what kind of goods will be suitable for Kanan to sell through such stores.
Kanan should consider the following type of goods that will be suitable for selling through Mail order houses:
- Goods which have popular demand by customers and can be distributer over wide area
- Goods that don’t require demonstration or skills for their usage
- Durable and easy to use goods which doesn’t get damaged easily
- Standardised goods with good quality and brand name so that they are distinguished by customers
Examples: cosmetics and beauty aids, electronic gadgets, medicines, small home utility goods, books, etc. Can be sold through mail order houses.
Q.86 Titan is an Indian luxury goods shop that offers watches, eyewear and jewelry. The company has over- 400 ‘World of Titan’ stores, 150 ‘Fastrack’ stores, 300 eyewear store, around 200 jewelry stores and 740 service center stores. The company aims to invest more and open more stores across the country.
How would opening up of more chain stores will help Titan?
Titan is a Multiple/Chain store, since it has a number of stores across the country.
Opening up such chain stores would help Titan in:
- Enjoying economies of scale due to central procurement
- Eliminating unnecessary middlemen as the goods are sold directly to the consumers
- Reducing the chances of dead stock as goods which are not in demand in a particular locality may be transferred to another locality store
- Reducing risk of an organisation as losses incurred in one shop may be covered by profits in other shop
Q.87 Soma Pvt. Ltd. delivered 1000 keyboards to Chirayu & Co. at the price of â‚¹ 900 per keyboard before the due date.
The Sales Manager of Chirayu Sons & Co. rejected and sent back 500 keyboards , as the they were not in conformity with the order, along with a written complain and a document stating the amount to be deducted from the dues to Soma Pvt. Ltd.
Identify the document used by Chirayu & Co, for specifying the amount to be deducted.
The document used by Chirayu Sons & Co. is the Debit Note.
Debit Note is a document prepared and sent by one party (either buyer or seller) to the other, stating that the receiver’s account has been debited with the specified amount, for the specified reasons or on the return of goods.
Q.88 Amir moves from street to street to sell non standardised and low value products such as fruits, vegetables, toys, etc.
1.What kind of trade is this?
2.Choose from the following, the kind of trader Amir is?
3. Which one of the following is the demerit of buying from peddlers?
c.Inconvenience in buying
d.Inconvenience of place
1. c. Retail trade
This is the kind of retail trade. It refers to the trade which involves the sale of goods and services directly to the ultimate consumers. Retailing trade is classified on the basis of fixed place of business.
2. c. Peddlers
Peddlers are the small producers or petty traders who carry their products on a bicycle, hand cart, cycle rickshaw or on their heads; move from place to place to sell their products on the doorstep of the customers. These are amongst the oldest form of retailers in the market place and deal in non standardised and low value products.
3. b. Unreliable products
Peddlers are found in the streets of residential areas, places of exhibitions, public areas, etc. They provide convenient service to the consumers. But sometimes, customers feel cheated due to unreliability of products in terms of quality and price.
Q.89 Kiara and Kian are twins. They are invited to a family function. Their parents purchased Kiara’s dress from ‘Stylo kids’ exclusive garments for kids. Whereas for Kian and themselves they purchased the dress from Fashonita, a shop of Fashionita Ltd.
1.Identify the type of store from where Kiara’s dress is purchased.
c.Mail order house
2. Also help us to know the type of store from where other family members purchased their dresses.
c.Mail order house
3. What type of trade will you classify this as?
d.Small Scale retail trade
1. d.Speciality store
Speciality stores specialise in the sale of a specific line of products. These are very popular in urban areas and generally located in a central place where a large number of customers can be attracted. Provide a wide choice to the customers in the selection of goods.
2. a. Chain Store
Chain stores involve establishment of a number of shops with similar appearance in localities, spread over different parts of country. These deal in standardised and branded consumer products having rapid sales turnover. Are run by same organisation which have identical merchandising strategies with identical products and displays.
3. b.Retail Trade
These are retail trade: Fixed shop retail trade. Retail shops in which either single type of goods or a variety of goods are made available to a large number of consumers in a big shop under a single roof.
Q.90 Tiffany & Co. offers an extensive collection of jewelry, timepieces, sterling silverware, china, crystal, stationery, fragrances and accessories.
1. What kind of store is Tiffany & Co.?
c.Mail order house
2. Also help us to know the kind of trader the company is.
3.Can you help us to know the kind of trade Tiffany 7 Co. is into?
1. d.Speciality store
Speciality stores specialise in the sale of a specific line of products. These are very popular in urban areas and generally located in a central place where a large number of customers can be attracted. Provide a wide choice to the customers in the selection of goods.
Tiffany & Co. is a speciality store that is a kind of retail shop. This kind of retailer specialise in the sale of a specific line of products.
3. a.Internal Trade
Internal Trade also known as Domestic Trade involves buying and selling of goods and services within the boundaries of a country. This can be wholesale or retail trade.
FAQs (Frequently Asked Questions)
1. According to Chapter 10 of the Class 11 Business Syllabus, what is trade?
A notion called trade refers to purchasing and selling products for money domestically and abroad. Trading is essential since no nation can produce all the commodities and services independently. The goal of trade is often to make money. It may be divided into two major categories: international and domestic trade (two or more countries). Students can refer to Extramarks to gain access to Important Questions Class 11 Business Studies Chapter 10, which answers all such questions and clarifies doubts of the students and strengthens their concepts.
2. What are the primary legal papers used in domestic trade?
Invoice: In the case of credit transactions, the seller of the goods provides a statement in which he provides information about the goods acquired by the client, such as quantity, quality, rate, total value, sales tax, discount, etc. Another name for it is a bill or memo. The sole source the client has for information on the sum he must pay the seller is the invoice.
Pro-forma Invoice: A Pro-forma invoice is a statement that is provided with the items being shipped from consignor to consignee. It provides information on the assigned items’ quantity, quality, price, and expenditures.
3. What are a few of the trade terms?
The main terms used in the industry as per Important Questions Class 11 Business Studies Chapter 10 are listed below:
- A cash-on-delivery transaction is one in which payment is paid for goods or services at the time of delivery. When the services or goods are delivered, and in instances where the client cannot pay, they typically must return the delivered goods to the seller.
- Free on Board or Free on Train refers to a contract between a seller and a customer wherein the seller is responsible for paying all costs up until the point of delivery to a carrier (which might also be a ship, rail, truck, etc.).