CBSE Class 10 Sample Paper 2025 Solution for Elements of Business

CENTRAL BOARD OF SECONDARY EDUCATION

SAMPLE PAPER
CLASS 10
2025

Solutions

ELEMENTS OF BUSINESS (154)
CLASS X (2024-25)
MARKING SCHEME

Q.NO. QUESTION MARKS

1. C. Letter 1

2. B. Equity shares 1

3. A. Hire purchase 1

4. D. Payment on credit terms 1
5. B. Departmental store 1
6. C. Statement I is true, Statement II is false. 1
7.(A) D. Message 1
OR
7.(B) D. Bing 1

8. C. Automated vending machines 1
9. C. They do not provide credit facilities 1
10. D. Goods that are perishable and bulky in nature 1
11.(A) B. Retained Earnings 1
OR
11.(B) A. Debentures
12. A. Assertion (A) is true but Reason (R) is false. 1

13. A. Trade credit 1
14. D. Speciality stores 1
15. C. Purchase by sample 1
16. C. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the 1
correct explanation of the Assertion.

17. A. Fall of hammer 1
18. A. Credit Note 1

19. (I) Achintya India Life Insurance Co. Ltd. - Public company 1
Hira Asset Management Company Pvt. Ltd. - Private company
(II) Difference between a public company and a private company (Any
two)
BASIS PUBLIC COMPANY PRIVATE COMPANY

1x2

1

Members Minimum- seven Minimum- two
Maximum-Unlimited Maximum-two hundred

Minimum Three Two
number of
directors

Transfer of No restriction on transfer Restriction on transfer
shares

Invitation to Can invite public to Cannot invite public to
public for subscribe to its shares or subscribe to its shares or
subscription debentures debentures

20. (I) The source of finance that Kinjal Enterprises Ltd. has raised through 1
issue of securities to Kaushal is Equity shares.
(II) Disadvantages of using the source of finance.are:
• Investors who want steady income may not prefer equity shares as
equity shares get fluctuating returns
• The cost of equity shares is generally more as compared to the cost
of raising funds through other sources 1x2
• Issue of additional equity shares dilutes the voting power, and
earnings of existing equity shareholders
• (iv) More formalities and procedural delays are involved while raising
funds through issue of equity share. (Any two)
21. Channel of communication refers to the medium through which a message 1
(A) is sent and received. In other words, it's the method of communication used.
Two types of channels of communication are:
• verbal communication
• written communication 1x2
• non-verbal communication (any two)
OR
21. Voicemail: It is a computer-based system for receiving and responding to
(B) incoming telephone calls. It records and stores telephone messages 1
through computer memory.
Two advantages of voicemail are:
• The individuals can record their messages through voice mail.
• The receivers at their own convenience can get the message from the
machines and take action accordingly. 1x2
• The caller can get the required information by dialing the voice mail
number and then following the instructions of the computer. (any two)
22. (I) Urban Fresh is a Multiple Shop/ chain store. 1
(II) Two features of Multiple shops are:
• These shops are located in fairly populous localities, where a sufficient
number of customers can be approached.
• The manufacturing/ procurement of merchandise for all the retail units is
centralised at the head office, from where the goods are despatched to
each of these shops according to their requirements. 1x2
• Each retail shop is under the direct supervision of a Branch Manager,

2

who is held responsible for its day-to-day management.
• All the branches are controlled by the head office, which is concerned
with formulating the policies and getting them implemented
• The prices of goods in such shops are fixed and all sales are made on
cash basis.
• The head office normally appoints inspectors, who are concerned with
day-to-day supervision of the shops, in respect of quality of customer
service provided etc. (any two)
23. Four reasons for choosing debentures are:
• Debentures are fixed charge funds and do not participate in profits of the
company. 1
• The issue of debentures is suitable in the situation when the sales and
earnings are relatively stable. 1
• As debentures do not carry voting rights, financing through debentures
1
does not dilute control of equity shareholders on management.
• Financing through debentures is less costly as compared to cost of
1
preference or equity capital as the interest payment on debentures is tax
deductible.
24. (I) Purchase by sample: When goods are bought in bulk it is not possible to 2
(A) inspect the whole lot. Therefore the buyer examines a sample to decide the
goods to be purchased. In case of purchase by sample it is agreed upon by
both the parties that the bulk supply shall be of the same quality as that of
the sample.
(II) Purchase by inspection: In case of purchase by inspection the buyer
personally goes to the shop to check the quality of the product to be bought. 2
This is the most common method of buying. It is mostly used in case of retail
buying.
OR
24. Purchase: Purchase is a contract through which a person gets the 1
(B) ownership of some goods or properties transferred in his name from
another, on payment of money.
Sale: Sale is a contract involving the transfer of the possession and 1
ownership (title) of a good or property, or the entitlement to a service, in
exchange for money or value.
The difference between a cash transaction & credit transaction is the timing
of the payment. A cash transaction is a transaction where payment is settled
immediately. On the other hand, payment for a credit transaction is settled
at a later date. For example, Rashi buys groceries and makes payment 2
immediately in cash. It will be known as a cash transaction. However, if he
makes the payment on a later date it will be known as a credit transaction.
25. Four qualities of a good salesperson are:
• Physical qualities: A salesperson should have a good appearance and
an impressive personality. He should also have sound health. 1x4
• Mental qualities: A good salesperson should possess certain mental
qualities like imagination, initiative, self-confidence, sharp memory,
alertness etc. He should be able to understand the needs and
preferences of customers.
• Integrity of character: A good salesperson should possess the qualities
of honesty and integrity. He is to gain the confidence of the customers.

3

A salesperson should be loyal both to the employer and to the
customers.
• Knowledge of the product and the company: A salesperson should
have full knowledge of the product and the company he is representing.
He should be able to explain each and every aspect of the product i.e.
its qualities, how to use it, what precautions to be taken, etc.
• Good behavior: A salesperson should be co-operative and courteous.
Good behavior enables one to win the confidence of the customers.
• Persuasive skills: A good salesperson should be able to convince
customers and create the desire in the mind of prospective customers
to possess the product.
26. (I) Method of communication used by Ms. Deepika Rastogi is Video 1
Conferencing.
Besides listening to the voice, the participants of the conference can also 1
see the picture of each other while talking to each other. This is called video
conferencing.
(II) Two benefits of using this method of communication are:
• Saves time
• Saves cost 1x2
• Effort minimization
• Rapid connect (any two)
27. (I) Horizontal communication: Horizontal or lateral communication takes 3
(A) place between one division and another. For example, a production
manager may contact a marketing manager to discuss the schedule of
product delivery, product design, quality etc.
(II) Vertical communication: Vertical communication flows vertically i.e.,
upwards or downwards through formal channels. Upward communications
refer to flow of communication from subordinate to superior whereas
downward communication indicates communication from a superior to 3
subordinate.
The examples of upward communication are – application for grant of leave,
submission of progress report, request for grants etc. The examples of
downward communication include – sending notice to employees to attend
a meeting, ordering subordinates to complete an assigned work.
OR
27. (I) External communication-External communication means interaction of
(B) the company with the outside environment like customers, vendors, clients,
investors, government agencies, society, etc. It is the transfer or exchange 1
of information between a company and external entities such as customers,
businesses, suppliers, partners etc.
Two types of External communication:
• Formal External Communication
1
• Informal External Communication
1
(II) Three key elements of communication:
• Message
• Sender:
• Encoding 1X3
• Medium
• Decoding

4

• Receiver
• Feedback (any three)
28. (I) The hire purchase system is essentially a contract for hiring of goods. 1
The ownership rights remain with the seller and the buyer exercises his
option for purchasing the goods. The buyer can return the goods at any
stage. The seller can also take back the goods in case of non-payment.
When goods are sold and payment is agreed to be made in installments, it
is known as the installment payment system. In this case if there is default
in payment of any installment by the buyer, the seller cannot ask for the 1
goods to be returned as the ownership rights pass to be buyer when goods
are sold and initial payment is made.

(II) Difference between hire purchase and Installment system: (any four)
S.NO. HIRE PURCHASE SYSTEM INSTALLMENT SYSTEM

1. Ownership is transferred only Ownership is transferred at the
on payment of last beginning of the agreement
installment.

2. Hirer has a right to terminate No right to terminate the
the agreement and return the installment purchase agreement
goods. 1x4

3. Monthly payment is termed Monthly payment is termed as
as hire charges. installment

4. All the risks are borne All the risks are borne by the
by the financing company till buyer from the beginning
the last payment by the hirer.

5. On default of payment, the On default of payment, financier
financier has the right to is liable to receive the remaining
forfeit the money paid till dues as it is not forfeited.
date.

29. Joint Stock Company 1
Features of Joint Stock Company are;
(i) Artificial person: A company is a creation of law and exists independent
of its members. Like natural persons, a company can own property, incur
debts, borrow money, enter into contracts, sue and be sued but unlike them
it cannot breathe, eat, run, talk etc. 1x5
(ii) Separate legal entity: From the day of its incorporation, a company
acquires an identity, distinct from its members. Its assets and liabilities are
separate from those of its owners.
(iii) Formation: The formation of a company is a time consuming, expensive
and complicated process. It involves the preparation of several documents
and compliance.
(iv) Perpetual succession: A company being a creation of the law, can be
brought to an end only by law. It will only cease to exist when a specific

5

procedure for its closure, called winding up, is completed. Members may
come and members may go, but the company continues to exist.
(v) Control: The management and control of the affairs of the company is
undertaken by the Board of Directors, which appoints the top management
officials for running the business.
(vi) Liability: The liability of the members is limited to the extent of the capital
contributed by them in a company. The members can be asked to contribute
to the loss only to the extent of the unpaid amount of share held by them.
30. (I) Television advertising- It refers to promotion of a product or service 1
(A) through commercials or sponsored content that are broadcast on television
channels during designated time slots.
Advantages of television advertising:
(i) It is most effective as it has an audio-visual impact.
(ii) With catchy slogans, song and dance sequences, famous personalities
exhibiting products, TV advertising has a lasting impact.
(iii) With varieties of channels and programmes advertisers have a lot of 1x2
choice to select the channel and time to advertise.
(iv) Even illiterate persons can watch the advertisements and understand it
by seeing and hearing.

(II) SIGNIFICANCE OF ADVERTISING
i. To educate customers- Advertising helps in making the consumers aware
about the product ,its availability and uses.
ii. To create demand for new products- Advertising helps in creating the
demand of the product in the market.
iii. To retain existing customers- advertising helps the manufacturers not
only to create a demand for a new product but also to retain the existing 1x3
customers.
iv. To increase sales-advertising creates demands for new products and
sustains the demand of old ones. Thus, with increase in demand, the sale
of the product also increases.
v. To assist salesmen-The salient features of a product, its qualities and its
uses helps a salesman to sell the product quickly without spending time in
explaining and convincing the customer.
OR
30. (I) Sales promotion refers to short- term incentives, which are designed to
encourage the buyers to make immediate purchase of a product or service. 1
(B)
Companies use sales promotion tools specifically designed to promote to
customers.
(II) Tools of sales promotion are:
1. Rebate: Offering products at special prices, to clear off excess inventory.
2. Discount: Offering products at less than list price.
3. Refunds: refunding a part of price paid by customer on some proof of
purchase, say on return of empty foils or wrapper. This is commonly used
by food product companies, to boost their sales.
4. Product combinations: Offering another product as gift along with the
purchase of a product, say offer of a pack of ½ kg of rice with the purchase
of a bag of Aatta (wheat flour), or ‘Get 128 KB Memory Card Free with a
Digicam’. 1x5
5. Quantity gift: Offering extra quantity of the product commonly used by
marketer of toiletry products.

6

6. Instant Draws and Assigned Gift: For example, ‘Scratch a Card’ or ‘Burst
a Cracker’ and instantly win a refrigerator, Car, T-shirt, Computer, with the
purchase of a TV.
7. Lucky Draw: For example, the offer of a bathing soap to win a gold coin
on a lucky draw coupon for free petrol on purchase of a certain quantity of
petrol from a given petrol pump.
8.Usable Benefit: Purchase goods worth ` 3000 and get a holiday package
worth ` 3000 free’ or ‘Get a Discount Voucher for Accessories on Apparel
Purchase of ` 1000 and above.’
9. Full finance @ 0%: Many marketers of consumer durables such as
Electronic goods, automobiles etc offer easy financing schemes such as ‘24
easy installments.
10. Sampling: Offer of free sample of a product, say a detergent powder or
toothpaste to potential customers at the time of launch of a new brand.
11.Contests: Competitive Events involving application of skills or luck, say
solving a quiz or answering some questions. (any five)

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