NCERT Solutions for Class 11 Business Studies Chapter 4

NCERT Solutions for Class 11 Business Studies Chapter 4 Business Services. Study material in Hindi and English Medium are given here in PDF file format to free download. Topic wise answers of short and long questions are also given with suitable explanation.

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11th Business Studies Chapter 4 Business Services

Class: 11Business Studies
Chapter: 4Business Services
Contents:NCERT Solutions and Study Material

Class 11 Business Studies Chapter 4 Solutions

11th B St Chapter 4 Short Answer Questions

Define services and goods.

Goods are physical product which can be delivered to a buyer. It refers to transfer of the ownership from seller to customer. For example; television, mobile phone etc.
Services are those separately identifiable, essentially intangible activities which provide satisfaction of wants, and are not necessarily linked to the sale of a product or another service. For example; DTH services, mobile banking etc.

What is e-banking? What are the advantages of e-banking?

Online banking, also known as internet banking or web banking, is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution’s website. It includes ATMs, credit cards, debit cards, mobile banking and internet banking.
Advantages of e-banking from banks point of view are
a) It promotes paper less transactions giving environmental advantage and competitive advantage to a bank.
b) Burden of data processing gets considerably reduced due to centralised data base
c) Gives an opportunity to cover all far and wide regions with less capital investment.
Advantages of e-banking from customer’s point of view are
a) 24/7, 365 days a year service to the consumers helps them with anytime anywhere banking.
b) It reduces risk and ensures greater security.
c) It increases financial discipline by keeping record of each and every transaction.
d) Availability of banking facility at any-time and anywhere increases satisfaction of the consumers.

Write a note on various telecom services available for enhancing business.

Various telecom services available for enhancing business are as follows:
a) Cellular Mobile Services: These companies provide all types of telecom services like voice and non-voice messages, data services, PCO connectivity etc.
b) Radio Paging Services: It is one way information broadcasting solution and has spread its reach to a large area. It includes services including tone only, numeric only and alpha/numeric only.
c) Fixed Line Services: These services utilise any type of network equipment connected through fibre optic cable laid across the length and breadth of the country.
d) Cable Services: These services transmit media information within a license area of operation to operate.
e) VSAT Services: VSAT stands for Very Small Aperture Terminal. It is a satellite based communication service which is highly flexible and reliable communication mainly used by government agencies.
f) DTH Services: DTH stands for Direct to Home is a satellite based service which uses a dish antenna and a set up box to receive media services.




Explain briefly the principles of insurance with suitable examples.

The principles of insurance are explained below:

    1. Principle of Utmost Good Faith: Uberrima fides is a Latin phrase meaning “utmost good faith”. It is the name of a legal doctrine which governs insurance contracts. This means that all parties to an insurance contract must deal in good faith, making a full declaration of all material facts in the insurance proposal. Any fraud or misrepresentation of facts can result into cancellation of the contract.
    2. Principle of Insurable interest: The principle of insurable interest on life insurance is that a person or organization can obtain an insurance policy on the life of another person if the person or organization obtaining the insurance values the life of the insured more than the amount of the policy. In this way, insurance can compensate for loss. Absence of insurance makes the contract null and void. If there is no insurable interest, an insurance company will not issue a policy.
    3. Principle of Indemnity: Indemnity is a guarantee to restore the insured to the position he or she was in before the uncertain incident that caused a loss for the insured. The insurance company promises to compensate the policyholder for the amount of the loss up to the amount agreed upon in the contract. This is a regulatory principle that provides compensation equivalent to the actual loss and not the amount exceeding the loss.
    4. Principle of Subrogation: Subrogation is a term describing a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss. The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss.
    5. Principle of Contribution: The principle of contribution is implemented when multiple insurance policies are covering the same property or loss, the total payment for actual loss is proportionally divided among all insurance companies. If the same subject matter, except life is insured by more than one insurers, then the actual loss will be shared by all the insurers.
    6. Principle of Mitigation: If means that the insured should try to minimise the loss of the subject matter of the insurer even if it is insured.
    7. Principle of Proximate Cause: In law, a proximate cause is an event sufficiently related to an injury that the courts deem the event to be the cause of that injury. This principle is applicable when the loss is the result of two or more causes. The proximate cause means; the most dominant and most effective cause of loss is considered. This principle is applicable when there are series of causes of damage or loss.




Explain warehousing and its functions.

A warehouse is a building for holding or storing goods from the time of their production or purchase to final consumption. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages. It covers the gap between production and consumption. In addition to providing services of storage, warehouse also provides logistical service in a cost effective manner.
Functions of Warehouses:

    1. Cost Effectiveness: Due to the storage space available goods can be stored and can reduce ordering cost significantly. It stores goods in surplus and there is no deficit at the time of demand.
    2. Value Added Services: Warehouses also provide ancillary value added services like transit mixing, packaging and labelling.
    3. Price Stabilization: Warehouses help to achieve equilibrium by equalizing demand and supply and helps achieve more stable prices of the product.
    4. Financing: Warehouse owners advance money to owners of goods on the security of these goods and they also provide these goods on credit to customers. It can also help warehouse owners to borrow capital from banks.
    5. Inventory Management: Warehouse owners can enhance inventory management skill and maintain proper records of inventory with methods like JIT system, LIFO, FIFO etc.
    6. Consolidation: Consolidating is necessary for goods that are produced in small quantities but sold to customers in bulk. Warehouse help in consolidation of the goods

11th B. St. Chapter 4 Long Answer Questions

What are services? Explain their distinct characteristics.

Services are those separately identifiable, essentially intangible activities which provide satisfaction of wants, and are not necessarily linked to the sale of a product or another service. For example; DTH services, mobile banking etc. A service can also be called as an economic activity, an act or performance offered by one party to another.
Characteristics of Services
a) Intangibility: Services are intangible and have no physical form. We cannot touch them, it is not a physical object. Service is satisfaction driven and concentrates on the benefit a consumer can derive.
b) Inventory: Services are perishable and cannot be stored. Services are provided as and when needed by the customers. Here the element of time assumes a significant position.
c) Inseparability: Services are generally created or supplied simultaneously. They are inseparable and are consumed when performed.
d) Inconsistency: This character of services can be altered as per the need and requirement which makes it difficult to set a standard for any service. The quality and price of services cannot be standardized, thus it varies with every performance.
e) Involvement: The ownership cannot be transferred in case of services as in the case of sale of goods. The users have only an access to services and it demand coordination and involvement between service providers and customer.

Explain the functions of commercial banks with an example of each.

The main functions of commercial banks are:
a) Accepting Deposits: The commercial banks accept deposits from the public. Banks need to pay an interest amount half-yearly or quarterly on the deposits. There are majorly two types of deposits: Current deposit and Fixed deposit.
(i) Current Deposits:
The depositors of such deposits can withdraw and deposit money whenever they desire and they carry either no interest or very low rate of interest.
(ii) Fixed Deposits:
These are the deposits which are deposited for a definite period of time. This period is generally not less than one year and, therefore, these are called as long term deposits.
b) Loan Advancing: The banks also provide customers with loan advancing facilities and charge a fixed or fluctuating amount of interest which is one of the main sources of bank’s income. Banks also provide overdraft, cash credit and trade bill facilities. For this, banks demand a security from the customers and charge very high rate of interest.
c) Discounting of Bills of Exchange: Bank provide the facility of providing funds against bill of exchange to the holder of the bill as a means of short-term advance. The bank usually charges a fee from the bill holder and gives 80% of the total bill amount. The bank then collects the amount due from the debtor and returns the balance amount to the bill holder.
d) Investment of Funds: The banks invest their surplus funds in Government securities, other approved securities and other securities. Government securities include both, central and state governments, such as treasury bills, national savings certificate etc.
e) Agency Functions: Banks function in the form of agents and representatives of their customers. Banks provide the facility of transferring funds of customers to different places. These transfers are facilitated by banks in form of pay orders and bank draft adding some transaction charge. Banks collect cheques, drafts, bills of exchange and dividends of the shares for their customers.



Write a detailed note on various facilities offered by Indian Postal Department.

Indian Post and Telegraph Department provides various postal services all over India. Various saving schemes are offered which includes:
1. Kisan Vikas Patra
2. National Savings Certificate
3. Fixed Deposit Scheme
4. Public Provident Fund
5. Recurring Deposit
6. Money order
Facilities of postal department are broadly divided

    • a) Financial Facilities: Post and Telegraph Department provides financial services using post office’s saving schemes.
    • b) Mail Facilities: It consists of facilities like parcel, insurance, registration etc. It consists of transmission of articles from one place to another.
    • c) International Money Transfers: It enables money transfer from various countries in collaboration with Western Union Money Transfer.
    • d) Passport Facilities: It works in tandem with Ministry of External Affairs and accepts application for passport.
    • e) Speed Post: It provides fast and timely delivery of urgent posts.
Describe various types of insurance and exercise the nature of risks protected by each type of insurance.

Following are the types of insurance:

    • a) Marine Insurance
    • b) Fire Insurance
    • c) Life Insurance



Explain in detail the warehousing services.

A warehouse is a building for holding or storing goods from the time of their production or purchase to final consumption. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages. It covers the gap between production and consumption. In addition to providing services of storage, warehouse also provides logistical service in a cost effective manner.
Primary warehousing services include the following:

    1. Cost Effectiveness: Due to the storage space available goods can be stored and can reduce ordering cost significantly. It stores goods in surplus and there is no deficit at the time of demand.
    2. Value Added Services: Warehouses also provide ancillary value added services like transit mixing, packaging and labelling.
    3. Price Stabilization: Warehouses help to achieve equilibrium by equalizing demand and supply and helps achieve more stable prices of the product.
    4. Financing: Warehouse owners advance money to owners of goods on the security of these goods and they also provide these goods on credit to customers. It can also help warehouse owners to borrow capital from banks.
    5. Inventory Management: Warehouse owners can enhance inventory management skill and maintain proper records of inventory with methods like JIT system, LIFO, FIFO etc.
    6. Consolidating is necessary for goods that are produced in small quantities but sold to customers in bulk. Warehouse help in consolidation of the good as it receives and consolidates goods from different production stations and dispatches it to customer on a single transportation shipment.



Secondary Functions of a Warehouse
    1. Protection of goods: A warehouse provides protection to goods from all possible natural or unnatural loss or damage. It makes special arrangements for different products according to their nature. As all losses are borne by warehouse they take special measures in order to curb losses.
    2. Risk Bearing: Warehouses also bear the accidental risk of storage of goods. Once the custody of goods are handed over to the ware housekeeper for storage, the responsibility of, these goods passes on to the ware housekeeper. Thus, any risk of spillage or brakeage of goods is borne by the warehouse keeper. It is the duty of warehouse keeper to return the goods in good condition, the warehouse becomes responsible for any loss, theft or damage etc.
    3. Processing: Processing is a major step in converting the goods to consumable form. Certain commodities cannot be consumed in the form they are produced and go through processing.
    4. Grading and branding: Warehouses also perform on demand functions of grading and branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. They charge a fee for facilities for mixing, blending and packaging of goods for the convenience of handling and sale.