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CBSE Questions for Class 11 Commerce Business Studies Business Services Quiz 6 - MCQExams.com
CBSE
Class 11 Commerce Business Studies
Business Services
Quiz 6
Non-payment of premium results in a policy being declared _______________.
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Insured
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Null and void
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Dishonoured
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None of the above
Explanation
Non-payment of premium results in a policy being declared null and void. To run a policy, certain amount of premium is to be paid at a regular interval of time period. If someone fails to pay that certain amount of premium within the gven period of time, then as a result the policy becomes null and void.
Identify the type of warehouse licensed by the government provided for storing imported goods _______________.
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Duty-paid warehouse
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Bonded warehouse
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Government warehouse
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Licensed warehouse
Explanation
Bonded warehouse licensed by the government provided for storing imported goods. It may be managed by the state or private enterprises.Bonded warehouse can be defined as customs-controlled warehouse for storing the imported goods until the duty is paid.
Goods once cleared from Bonded warehouse can be shifted to Duty-paid warehouse.
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True
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False
Explanation
Bonded warehouses are licensed by the government to accept imported goods prior to payment of tax and customs duty.
The goods are kept in bonded warehouses by the customs authorities till the customs duty is paid.
Goods can be removed in part as and when required by the importers and buyers, and import duty can be paid in installments.
Life Insurance Corporation Ltd. is formed under ______________.
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Companies Act, 2013
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Special Act of Parliament
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Both (a) & (b)
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None of these
Explanation
The public enterprises that are formed by a Special Act of the Parliament are known as Statutory Corporations. The Act defines the powers and the functions of such organizations. It is a financially independent corporate body and has the capacity to act on its own name.
The Life Insurance Corporation of India was created on 1st September 1956, under the
Life Insurance Corporation Act, 1956 passed by the Parliament.
It was set up with the objective of spreading life insurance more widely and in particular to the rural areas so that it reaches all insurable persons in the country and provides them adequate financial cover at a reasonable cost.
Hence, B is the correct option.
'Goods in bond' is related to which of the following warehouses?
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Public warehouses
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Bonded warehouses
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Co-operative warehouses
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Cold-storage warehouse
Explanation
Public warehouses can be used for storage of goods by traders, manufacturers or any member of the public after the payment of a storage fee or charges. The government regulates the operation of these warehouses by issuing licences for them to private parties.
Bonded warehouses are licensed by the government to accept imported goods prior to payment of tax and customs duty. These are goods which are imported from other countries. Importers are not permitted to remove goods from the docks or the airport till customs duty is paid.
At times, importers are not in a position to pay the duty in full or does not require all the goods immediately. The goods are kept in bonded warehouses by the customs authorities till the customs duty is paid. These goods are said to be in bond.
Some marketing cooperative societies or agricultural cooperative societies have set up their own warehouses for members of their cooperative society.
Cold-storage warehouse are suitable for storing goods that are highly perishable.
Cold-Storage are found in ______.
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Kolkata
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Delhi
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Mumbai
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All of the above
Explanation
Cold storage are used to store perishable goods for a period of time. It is important as it helps to prolong the shelf life of fresh goods. Cold-Storage are found in:
a) Kolkata
b) Delhi
c) Mumbai
Image-based cheque clearing system where the image of the cheque is sent electronically _____________.
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RTGS
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NEFT
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CBS
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CTS
Explanation
Image-based cheque clearing system where the image of the cheque is sent electronically is known as CTS. The Cheque Truncation System( CTS) can be defined as a process of stopping flow of physical cheque in which electronic image of the instrument is presented during the time of clearing.
Under e-banking, accountholders get unlimited access to their accounts.
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True
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False
Explanation
Under e-banking, account holders get unlimited access to their accounts- this is a true statement. Through e-banking customers can conduct transactions electronically. E-banking is a product designed for the purpose of online banking.
How does warehousing help in the widening of the market?
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The goods stored are maintained in good condition.
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Goods can be transported in bulk.
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Processed goods can be packaged.
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Goods produced at one place can be supplied at a distant place by storing them in various cities.
Explanation
Goods produced at one place can be supplied at a distant place by storing them in various cities as because warehousing help in widening of the market. Warehousing can be defined as an act of storing goods which are to be distributed or sold later.
Which of the following is/are the benefit(s) of e-banking to the banker?
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Competitive advantage
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Network is expanded beyond branches
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Centralised database reduces work load
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All of the above
Explanation
E-banking can be defined as a method of banking. Through e-banking customers can conduct transactions electronically. E-banking is a product designed for the purpose of online banking.
Benefits of e-banking to the banker are:
a) Competitive advantage
b) Network is expanded beyond branches
c) Centralized database reduces work load.
Which state government has announced a unique scheme to provide life insurance of up to Rs. $$5$$ lakh per farmer in the state?
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Telangana
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Karnataka
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Odisha
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Uttar Pradesh
Explanation
The Telangana government has announced a unique life insurance scheme for farmers. Under the scheme, the government will provide life insurance facility of Rs 5 lakh to the nominee, after the death of the insured farmer. The entire premium will be paid by the government to the insurance agency and the nominee will get the amount within 10 days of the claim after the death of the farmer. With this, the dependent family will get the benefit irrespective of the reason for the death of the farmer. The state government has tied up with the state-run Life Insurance Corporation of India (LIC) for the implementation of the scheme. The farmers in the age group of 18 to 60 are eligible to enroll their names to get benefit from it. The insurance scheme will commence on August 15 and farmers will be given insurance bonds. Every year on August 1, the total premium amount will be credited to LIC.
______________ system allows an accountholder to operate their accounts from any branch.
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CBS
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CTS
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NEFT
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RTGS
Explanation
CBS system allows an account holder to operate their accounts from any branch. CBS stands for Core Banking Solution. CBS can be defined as a technology platform which helps the customers to access their account from multiple delivery points, which includes different branches of the same bank, ATMs, internet and mobile banking, etc.
In India, life insurance was nationalized in the year __________.
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1946
0%
1951
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1956
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1961
Which one of the following generalisations can be drawn from the principle of subrogation?
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It is the principle by which the insurer, after having paid the loss to the insured, steps into the shoes of the insured person and acquires all rights and remedies as the insured would have enjoyed regarding the said loss
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A person who keeps a stock of inflammable material in his premises
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The insured can get only the compensation against the actual loss and he can't make profit out of insurance
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In marine insurance the immediate cause and not the remote cause shall be considered for bearing the loss
Explanation
In principle of subrogation the insurer, after having paid the loss to the insured, steps into the shoes of the insured and acquires all rights and remedies as the insured would have enjoyed regarding the said loss.
It basically means that insurer has a legal right to claim any future gains from the property after the said loss for any recovery/settlement.
Tick mark the correct answer.
Which one of the following may not necessarily be an advantage of co-ordination?
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Unity of direction
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Effective supervision
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Creative force
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Summarisation of all management functions
The aim of doctrine of subrogation is ___________________.
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to predetermine the worth of insured
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that the insured should not get more than the actual loss or damage
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doctrine of acceptance
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that there has to be an insurable interest
Explanation
Option B is correct.
The principle or the doctrine of subrogation states that after the insured is paid compensation for the loss or damage caused, the ownership of the property that was insured passes to the insurer.
This implies that the insured needs to surrender the property to the insurer i.e. the insurance company and cannot make any profit by selling its scrap.
Which of the following talks about the principle of utmost good faith?
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Premium is computed on the basis of assessment of the proposal form.
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Insurer agrees to compensate for loss of sea perils.
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A person who enters into contract has a legal obligation to act with honesty.
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It is mainly concerned with how the losses or damages happened.
Explanation
An insurance contract is a contract found on utmost good faith. It implies that the insurer and the insured both are under a legal obligation to disclose all the material facts related to the contract of insurance.
The insured shall disclose all the material facts accurately and voluntarily to the insurer. The insurer should also disclose all the terms and conditions clearly to the insured.
In case the insured fails to make such disclosure the insurance contract is voidable at the discretion of the insurer i.e. the insurance company.
Health Insurance is a safeguard against rising medical costs.
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True
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False
Explanation
Health Insurance is a safeguard against rising medical costs- this is a true statement. Health insurance can be defined as a policy which is designed to provide coverage to costs which occur due to medical care. It helps to provide financial protection in case of hospitalization of the insured.
The main element(s) of a fire insurance contract is/are _________________.
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In fire insurance, the insured must have insurable interest in the subject matter of the insurance.
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The contract of fire insurance is a contract of utmost good faith.
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The contract of fire insurance is a contract of strict indemnity.
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All of the above
Explanation
All the above are strictly the features of a contract of insurance. Fire Insurance contract is no different from an insurance contract and thus, these are also the features of a fire insurance contract.
The insured must have an insurable interest in the subject matter of the contract both at the time of taking the policy and as well as at the time of taking the claim for loss or damage.
In this case also the insured must disclose all the material facts such as fire detection and fire fighting equipment, nature of their use, etc. It is a contract of indemnity as the insured can claim only the actual damages from the insurer.
The insurer is liable to compensate only when fire is the proximate cause of damage or loss.
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True
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False
Explanation
The principle of proximate cause states that when the subject matter of the contract is damaged due to more than one cause, then the most proximate cause should be considered. Proximate cause means the most direct or the most dominant or most effective cause that has caused the mishap.
As we know that the fire insurance covers the loss or damage caused by fire. Thus, in such case the insurer shall be liable to compensate the insured only when fire is the proximate cause of damage.
The insured can, in the event of loss, recover the actual amount of loss from the insurer. Which of the following elements of fire insurance makes it happen?
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Insurable interest
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Uberrimae fidei
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Indemnity
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Consideration
Explanation
The principle of indemnity states that under an insurance contract
the insurer undertakes to put the
insured in the same
position that he occupied immediately
before the mishap.
The
insurance company undertakes to compensate the
insured for the loss caused to him
due to damage of the
property insured.
For this purpose, the compensation
payable and the loss suffered need to be
measured in terms of money.
All insurance
contracts of fire or marine insurance
are contracts of indemnity.
Under _______ the insurer (Insurance Company) undertakes to pay a specified sum when the insured attains a particular age or on his death which ever is earlier.
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Endowment Life Assurance Policy
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Joint Life Policy
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Annuity Policy
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Children's Flexi Policy
Explanation
A.
There are various kinds of life insurance policies. Under the Endowment Life Assurance Policy, the Insurance
Company undertakes to pay a specified
sum to the insured when he attains a
particular age or on his death which
ever is earlier. However, in the case of his death, the sum is payable to his
legal heir or nominee named therein.
Thus, the
endowment policy is only for a specific period and it matures after a specified
number of years.
Usually ______ policy is taken up by husband and wife or by two partners in a partnership firm.
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Annuity Policy
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Endowment Life Assurance Policy
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Childrens Endowment Policy
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Joint Life Policy
Explanation
Joint life policy as the name suggests is
taken up by two or more persons jointly. The
premium can be paid jointly or by either of
them in installments or lump sum.
On the death
of any one person the
assured sum or policy money is payable
to the
other survivor or survivors.
Usually,
husband and wife
or partners in a
partnership firm take this policy where the amount is
payable to the survivor on the death of
either of the two.
In India, presently the health insurance exists primarily in the form of _______.
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First-Aid policy
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Mediclaim policy
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Hospital policy
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ICU policy
Explanation
In India, presently the health insurance exists primarily in the form of mediclaim policy. Mediclaim policy forms a part of the health insurance policy. It helps to protect the insured from soaring medical expenses. It provides financial protection in case of accidental hospitalization or hospitalization due to illness.
In ________, the amount payable to the insured will not be paid before the death of the assured.
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Endowment Life Assurance Policy
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Whole Life Policy
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Joint Life Policy
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Annuity Policy
Explanation
Whole life policy :-
In the Whole life policy,
the amount payable to the
insured is paid only after the
death of the assured. Thus, the sum assured
becomes payable only to the
beneficiaries or the legal heir of the deceased.
The premium is usually payable for a
fixed period say for 20 or 30 years or for the
whole life of the assured. If the premium
is paid for the fixed period, the policy will
continue till the death of the assured.
A life insurance policy was introduced as a protection against the uncertainty of life.
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True
0%
False
Explanation
The life insurance corporation (LIC) was established with a purpose to insure the life of the humans. In a
Life insurance
contract, the insurer or the insurance company
undertakes to insure the life of a person
in exchange for a sum of money called
premium.
This premium may be paid
in lump sum, or
monthly, quarterly, half yearly or
yearly. T
he insurance company
promises to pay a certain sum of money
either on the death of the person or on
his attaining a certain age.
In case of Hull Policy, the amount insured is fixed at a level above the current market value.
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True
0%
False
Explanation
In case of Hull Policy, the amount insured is fixed at a level above the current market value. Hull policy basically provides coverage for ship damage expenses. It covers all types of vessels operating into the ocean, river or lakes.
Scope of _______ has widened to include disability insurance, health/medical insurance, annuity insurance and life insurance proper.
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Marine insurance
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Life insurance
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Fire insurance
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Motor insurance
Explanation
Scope of life insurance has widened to include disability insurance, health/medical insurance, annuity insurance and life insurance proper. In life insurance, the insurance company charges a premium which is to be paid by the insured at a certain time interval.
According to the basis of the sum insured, the family of the insured will be paid the fixed amount after the death of the insured or at the end of a specific term.
Number of units are 5000 and per unit price is $60, then flexible budget variable would be __________.
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$5, 000, 000
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$3, 000, 000
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$2, 000, 000
0%
$1, 000, 000
The person whose life is insured is called the assured.
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True
0%
False
Explanation
True
The person whose life is insured is called the assured as he is given an assurance by the insured or the insurance company that after a specified period or after his death he or his legal heirs shall be paid the fixed amount for which he has taken the life insurance policy. However, the assured needs to pay the premium regularly.
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