12th OCM Question Paper 2021 with Solution | Maharashtra Board (Download Free Pdf)

12th OCM Question Paper 2021 with Solution

12th OCM Question Paper 2021 with Solution
12th OCM Question Paper 2021 with Solution
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12th Commerce OCM Textbook Solutions

Chapter Name Solution Link
1) Principles of ManagementClick Here
2) Functions of ManagementClick Here
3) Entrepreneurship DevelopmentClick Here
4) Business ServicesClick Here
5) Emerging Modes of BusinessClick Here
6) Social Responsibilities of BusinessClick Here
7) Consumer ProtectionClick Here
8) MarketingClick Here

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Old Question Papers of 12th Commerce with solution (All Subjects)Click Here

Students Appearing for Maha 12th Class Exam need to Get Familiar with the Exam Pattern and Question Paper design. They Should also know the Marking Scheme of the Upcoming Maharashtra 12th class Exam 2021, Students who are Searching for Maharashtra 12th Class Question Paper 2021 can Find the Complete list of Subject Wise Annual, Supplementary & Model Question Paper of New Syllabus

12th OCM Question Paper 2021 with Solution

Q. 1. (A) Select the correct option and rewrite the sentences:(5) {20}

1) The process of contracting a business function to someone else is called as _____.
a) outsourcing
b) trading
c) e-business

2) The President of District Commission is a _____.
a) District Judge
b) High Court Judge
c) Supreme Court Judge

3) _____ was regarded as Father of Scientific Management.
a) Henry Fayol
b) F W Taylor
c) Philip Kotler

4) Principle of ______ is not applicable to life insurance.
a) insurable interest
b) utmost good faith
c) indemnity

5) In modern competitive market, consumer is regarded as the ______.
a) king
b) Agent
c) Owner

(B) Match the words from the following group ‘A’ and group ‘B’ correctly:  (5)

Group ‘A’Group ‘B’
a) Directing1) Tangible in nature
b) Business Services2) Exists everywhere
c) Digital Cash3) It is the process of instructing, guiding, communicating, and motivating
d) Responsibility towards investors4) Job security
e) Digital Marketing5) Use of digital media
6) Intangible in nature
7) Exists only in cyberspace
8) Use of traditional media
9) Return on investment
10) It is the process of recruiting, placing, and remunerating

A-3 , B-6 ,C-7 ,D-9 ,E-5

(C) Write a word/phrase/term which can substitute the following statements : (5)

1) A place where the goods and services are bought and sold. (Market)
2) A person who is an innovator who introduces new combinations of means of production. (Entrepreneur)
3) Warehouse in which perishable goods are stored. (Cold Storage)                     
4) The first step in an online transaction. (Registration)
5) Earning foreign exchange is the responsibility of the organization towards this group. (Government)

(D) Find and write the odd one among the following :(5)

1) Endowment policy, Whole life policy, Money back policy, Blanket policy.
2) Job security, health and safety measures, good working condition, reasonable profit.
3) District Commission, State Commission, NGO, National Commission
4) Selecting, Training, Co-ordinating, Placing
5) Price, People, Promotion, Product

Q. 2. Explain the following terms/concepts : (Any Four)  (12)

1) E-Business
Answer: The term ‘E-business’ i.e electronic business is derived from the terms e-mail and e-commerce.
E-business or electronic business is the administration of conducting business via the internet. This would include the buying and selling of goods or services, along with providing technical or customer support through the internet.

2) Staffing
Answer: Staffing is the function of execution according to plan and organizational structure. It is the process of attracting, recruiting, selecting, placing, appraising, remunerating, developing, and retaining the best workforce. Overall growth and success of every venture are based on the appropriateness of staffing functions. It is very challenging for organizations to focus on the best utilization of the workforce by using their talents and skills, retaining them, and arranging training and development programs. The function emphasizes managing human and not material or financial

3) Outsourcing
Answer: Outsourcing is the process of contracting a business function or any specific business activity to specialized agencies mostly the non-core areas such as sanitation, security, household pantry etc. are outsourced by the company. The company makes a formal agreement with the agency.
The company benefits in two ways.
i) It reduces its own cost
ii) It uses the expertise of the firm which specializes in a particular kind of service.

4) Banking
Answer: The term Bank comes from the French word ‘Banco’ which means a ‘bench’. In earlier days, money-lenders used to display coins of different currencies in big heaps or benches or tables for the purpose of lending or exchanging.
A bank is a financial institution that deals with deposits and advances and other related services. Bank provides various services related to money or financial requirements of consumers.

5) Lok Adalat
Answer: Lok Adalat is an effective and economical system for quick redressal of public grievances. It can also be referred to as ‘People’s Court’.
It is established by the government to settle disputes by compromise. The aggrieved party can directly approach the Adalat with a grievance, issues are discussed on the spot, and decisions are taken immediately. Resolution of disputes by Lok Adalat gets statutory recognition. e.g. MSEDCL, MSRTC, Railway Authority, Insurance Companies, Banks, etc. organize regular Lok Adalat.

6) Mental Revolution
Answer: Taylor introduced the concept of “Mental Revolution”. This principle focuses on change in the attitude of employees and management towards each other. Both should realize their equal importance in organization. They should give full cooperation for achieving the goal of the organization. This will increase productivity and profits.

Q. 3. Study the following case/situation and express your opinion : (Any Two) (6)

1) Mr. Ram, an emerging entrepreneur has designed a structure of his business organization by taking into consideration the required resources such as land, money, machinery, workforce, etc, for his new business. He appointed Mr.Shyam as a manager. Mr.Ram has been assigned the responsibilities such as recruitment, selection, training, and development and to determine the remuneration of the employees’ to Mr.Shyam. Mr. Ram has also appointed Mr.Shubham to supervise the work done by the employees according to the standards given to the employees. Mr.Shubham has to also suggest remedies to the employees wherever necessary.
In this context, find out the management functions performed by
a) Mr. Ram

b) Mr.Shyam
c) Mr.Shubham

a) Mr. Ram performs the function of planning and organizing.
b) Mr. Shayam performs the function of staffing because his main duties are to recruit, select, train, and development of the employees.
c) Mr. Shubham performs the function of controlling because he compares the actual performance of employees to standard performance. He also suggests remedies to overcome deviations.

2) An organization manufacturing paints has been enjoying a prominent market position since many years. It has been dumping its untreated poisonous waste on the riverbank which has created many health problems for the nearby villages.
a) Which responsibility is neglected by paint manufacturing organizations?
2) What kind of pollution are they creating?
3) Mention any one precautionary measures they need to take.

1) Responsibility towards the protection of the environment is neglected by the paint manufacturing organization.
2) They are creating water pollution by dumping its untreated poisonous waste on the riverbank.
3) Proper waste management techniques should be used by which waste should be reduced or reused.

3) Mr. Ved made his payment by cheque at the same time Mr. Shlok made his payment by fund transfer. In this situation.
a) Whose payment is faster?
b) Whose payment is related to traditional business?
c) Whose payment is related to e-business?

a) Payment made by Mr. Shlok is faster than the payment made by Mr. Ved.
2) Payment made by Mr. Ved by cheque is related to traditional business.
3) Payment made by Mr. Shlok by fund transfer is related to e-business.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM

Q. 4. Distinguish between the following : (Any Three)    (12)

1) Planning and Controlling

1) MeaningPlanning is deciding in advance what to do how to do it, when to do it and who is to do it.Controlling is the process of taking steps to bring actual results and desired results closer together.
2) ObjectiveTo set goals and choose the means to achieve these goals.To ensure that the objectives are achieved according to the plan.
3) Area of functionIt includes setting objectives by identifying the ways of attaining the goal and selecting the best plan.It includes setting up standards, measurements, and comparisons with actual performance and taking corrective steps whenever necessary.
4) FactorsInternal and external factors are considered in the planning process.Internal and external factors are taken into account for taking corrective action.
5) NatureIt is continuous in nature. It exists in the whole life of an organization.It is the process that starts once the actual plan is executed.
6) Level of ManagementTop management is concerned with planning the activities.Top and middle-level management are responsible. for controlling the activities.

2) Life insurance and Fire insurance.

PointsLife insuranceFire insurance
1) MeaningA contract whereby the insurance company undertakes to pay a certain sum of money either on death or maturity (whichever is earlier) for a consideration (premium)A contract in which insurer
promises to pay compensation to insured if something happens
to the subject matter due to fire or related events.
2) Policy taken byIt can be taken by an individual for his own life or for his family members.It can be taken by individuals for their properties or by businessmen. For their goods, properties business liabilities.
3) Subject matterIn life insurance, the life of the insured is a subject matterIn Fire insurance, the goods and assets or property of the insured is the subject matter.
4) Insurable InterestIt must exist at the time of contractIt must exist both at the time of contract and also at the time of loss.
5) TenureThe policy can be issued for any number of years, even until the death of the assured.It is generally for a short period like one year.
6) CompensationIt is paid either on death or
maturity whichever is earlier.
It is paid only if there is a loss due to fire during the term of policy.

3) State Commission and National Commission.

PointsState CommissionNational Commission
1) MeaningA consumer dispute redressal forum at the State level established by the State Government is known as State
A consumer dispute redressal forum at the National level
established by the Central Government by notification is
known as National Commission.
2) PresidentA person who is sitting or retired Judge of High Court shall, be appointed as the President of
State Commission.
A person who is or has been a judge of the Supreme Court,
shall be appointed as the president National Commission.
3) MemberNot less than four or not more than such number of members
as may be prescribed in consultation with the Central
Not less than four and not more than such number of members as may be prescribed.
4) Membership TenureThe members can have the membership for a term of five years or up to the age of sixty-seven,
whichever is earlier.
The members can have the membership for a term of five
years or up to the age sixty-seven years and president upto seventy years, whichever is earlier.
5) Area coveredIt covers a particular state.It covers the entire country.
6) Monetary JurisdictionTo entertain complaints where the
value of the goods or services paid as consideration exceeds
Rs. one crore, but does not exceed Rs. ten crores.
To entertain complaints where the
value of the goods or services paid as consideration exceeds
Rs. ten crores.
7) AppealAn appeal against the State Commission can be made to the
National Commission.
An appeal against the National Commission can be made to the Supreme Court.

4) Commercial Bank and Central Bank.

PointsCommercial BankCentral Bank
1) FunctionThe main function is to accept deposits from the public for lending to industry and others.The main function of the central bank (RBI) is to regulate the money supply in the country.
2) Printing of currencyCommercial banks cannot print currency.The central bank can print currency notes.
3) Acceptance of depositsCommercial banks accept deposits from the public.The Central Bank does not accept deposits from the public.
4) LoansCommercial banks provide loans to industry and commerce.The Central bank provides loans to bankers and financial institutions
5) OwnershipIt can be owned by private and/or by government agencies.It is owned and controlled by the government of India
6) Number of banksThere are many commercial banks in India.There is only one Central Bank (RBI) in India.
7) Monetary policyThe commercial banks do not frame any monetary policyThe Central Bank frames the monetary and credit policy.

Q. 5. Answer in brief : (Any Two) (8)

1) Explain the characteristics of an entrepreneur.

Answer: Entrepreneurs have some special characteristics like creative thinking, imagination, enthusiasm, sincerity, etc. The characteristics of an entrepreneur may be briefly stated as follows:

1) Intellectual Capabilities:
An entrepreneur is a creative thinker. He has reasonably good intelligence. He has the ability to analyze business situations. This ability will help him to take proper decisions.

2) Future Vision:
The entrepreneur has good foresight about future market situations. He should also have knowledge about the external business environment. This will help him to make proper decisions according to the situations and changes in the market. So, he can take timely action for the same.

3) Hard Work:
An entrepreneur is ready to work hard. It is more necessary when a new venture is started. He has to work for long hours. Many times he has to handle the main areas of business independently. This will make him successful.

4) Technical Knowledge:
An entrepreneur has good technical knowledge about his business. The entrepreneur has the ability to update himself with the latest knowledge about the product, process, and technology.

5) Communication Skills:
An entrepreneur needs to communicate with different people like customers, suppliers, creditors, employees, etc. He must be able to express his ideas and strategies effectively. It is necessary that there is a proper understanding between the sender and the receiver of the message.

6) Highly Optimistic:
An entrepreneur has to always think positively. He is always hopeful and confident about the market situation even in failure times. Such a positive attitude helps him to run his business successfully.

2) Explain any four rights of consumers.

Answer: Every consumer should be aware of his rights and use them in his daily life for protection. Consumers have to fight for their rights and put pressure on businesses, manufacturers, and traders for safeguarding their rights.

Following are the rights of consumers:

1) Right to Safety:
This right protects consumers against products, production processes, and services that are hazardous to health or life. According to this right, the consumer must get full safety and protection to his life and health. This safety should be in relation to medicines, electrical appliances, food, etc. The GOI has given safety standards in the form of AGMARK, lSI, BIS, Hallmark, etc.

2) Right to Information:
According to this right, consumers should be provided with adequate information about all aspects of goods and services like price, name of the manufacturer, contents used, batch number if any, date of manufacture and expiry date, user manual, safety instruction, etc. This right also enables consumers to select the right product or service. It is applicable to food products, medicines, spare parts or any other consumer products or services.

3) Right to Choose:
According to this right, consumers should be given full freedom to select an article as per their requirement, liking, and purchasing capacity. The right to choose is related to the concept of a free-market economy. As per this right, the seller cannot compel consumers to buy a particular product and hence monopoly is prevented.

4) Right to be heard:
Every business organization should listen and solve the complaints of consumers. According to this right, consumers have the opportunity to voice their complaints to the consumer forum. Consumers also give suggestions to manufacturers or traders on certain matters such as quality, quantity, price, packaging, etc. Nowadays, consumers can file online complaints through portals or mobile applications.

3) State social responsibilities of business towards employees.

Answer: Employees are human resources to the organization. They must be treated with dignity and respect. The management and employees should develop mutual understanding and trust. The government has passed various labour laws to safeguard the interest of employees.
The business has the following responsibilities towards employees:

1) Job security:
Security of job provides mental peace and employees can work with full dedication and concentration. Commitment to the work will raise their morale and loyalty towards the organization.

2) Fair Remuneration:
The business should pay attractive salaries to all their employees. Other incentives like bonuses, overtime allowance, etc. should be given to them. Remuneration should be fixed according to the nature of the work. Suitable wage plans providing increments and revision of wages are also essential.

3) Health and Safety Measures:
Businesses should protect the health and hygiene of employees. Canteen facilities, medical facilities, and proper sanitation must be provided to the workers. Proper maintenance of machines and premises must be done to prevent accidents and to control pollution. Safety equipment like hand gloves, safety shoes, helmets, goggles, masks, etc. should be provided to concerned employees.

4) Good Working Condition:
The employees should be provided with good working conditions such as adequate lighting, ventilation, drinking water, etc. Necessary steps should be taken to avoid air, water, and sound pollution. There should be proper working hours with lunch breaks and rest pauses etc.

5) Recognition of Trade Unions:
It is the responsibility of business organizations to maintain industrial peace. Employers must recognize the workers’ right to join a trade union. Employers should not restrict employees from forming a trade union. ‘Divide and Rule’ policy should not be followed. Management should sort out various problems of workers by holding talks or negotiations with such unions. Management and union should agree to ban strikes and lockouts to protect the interests of both parties.

Q. 6. Justify the following statement : (Any Two)  (8)

1) Principles of management are flexible in nature.

a) Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.
b) Management principles are flexible in nature. It means they can be changed or modified according to the situation.
c) Managers can be flexible while implementing principles to suit the requirement.
d) The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organization according to its need.
e) Thus it is rightly justified that, Principles of management are flexible in nature.

2) Planning is the basic function of management.

a) Planning is the process of establishing goals and a suitable course of action for achieving these goals.
b) Every function of management is based on planning.
c) It includes deciding the things to be done in advance.
d) Designing proper planning and implementing accordingly is the key to achieving the objectives of an organization.
e) Hence, Planning is the basic function of management.

3) The Consumer Protection Act was passed in the interest of consumers.

a) The Consumer Protection Act came into force from 1986. The Act has for the first time recognized six rights of the consumer:
i) Right to Safety.
ii) Right to Information
iii) Right to Choose
iv) Right to be heard
v) Right to Redress
vi) Right to Consumer Education

b) The Act has made provision for the establishment of Consumer Protection Councils at the central and state levels for promoting and protecting these rights.
c) The Act has created quasi-judicial machinery consisting of the District Commission, State Commission, and National Commission to entertain complaints and to give fair justice to the aggrieved consumers.
d) The strict enforcement of these rights creates competition among the sellers. Consequently, the consumers get quality goods at fair prices.
e) Thus it is rightly justified that, The Consumer Protection Act was passed in the interest of consumers.

4) Marketing is significant to consumers.

a) Marketing creates awareness among the consumers about different brands and features of the product available in the market.
b) Consumers can compare product features, price, availability, and other essentials because of marketing.
c) Marketing helps the consumer to choose the best products and services from the different options available.
d) Marketing helps to maintain the balance between demand and supply. It results in stable prices.
e) Marketing leads to consumer satisfaction through honest advertising, assurance of quality products, and availability of innovative products.
f) Hence, Marketing is significant to consumers.

Q. 7. Attempt the following : (Any Two)   (10)

1) Explain any five principles of management given by Henry Fayol.

Answer: Following are the five principles of management given by Henry Fayol.

1) Principle of Division of Work:
According to this principle, the work is divided into different kinds such as technical, financial, commercial, security operations, accounting, and managerial. It is assigned to employees as per their qualities and capabilities. It helps in improving the efficiency and expertise of employees which ultimately turns into the expected productivity level.

2) Principle of Authority and Responsibility:
Authority is the right to take decisions. It is necessary to get things done appropriately by subordinates. Authority always comes with responsibility. If the manager is given the authority to complete a task within a given time, he should be held responsible if he does not complete the work within the given time. The manager should have the proper authority to take managerial decisions on his own with respect to the goal.

3) Principle of Discipline:
According to Fayol, discipline is the most essential thing in the organization. Employees must obey and respect the rules that govern the organization. Discipline helps to achieve the goals of the organization. Good discipline is the result of effective leadership. There must be a clear understanding between the management and workers regarding the organization’s rules. Basic discipline should be observed at all levels of management.

4) Principle of Unity of Direction:
This principle states that ‘there should be one head and one plan’ in every organization. Each group in the organization should have the same objective and the group should be directed by one manager using a single plan.

5) Principle of Order:
This principle is based on ‘A place for everything and everything in its place. Human resources and materials should be in the right place at the right time for maximum efficiency. Human resources should be placed in right place and on right job. The principle focuses on the proper utilization of physical and human resources.

2) Explain the importance of marketing towards society.

Answer: Following are the importance of marketing towards society.

1) Increase in Standard of Living:
The prime objective of marketing is to provide goods and services to the customers to satisfy their needs. Paul Mazur defined marketing as, “The delivery of standard of living to the society”. Marketing helps to identify the needs of the customers and take an initiative to provide quality goods at cheaper prices. This will help to increase and maintain the standard of living of the customers.

2) Provides Employment:
Modern marketing is a total system that covers almost all functions of an organization such as buying, selling, financing, transport, warehousing, risk-bearing, research, development, etc. To run this system there is a need for people. Thus, marketing gives job opportunities to people. In the modern era of automation, lesser employments are available in the production function and the role of marketing has widened. It gives more opportunities for employment in marketing.

3) Decreases Distribution Costs:
Marketing activities help to provide cheap goods and services to society. Effective utilization of channels of distribution can help in reducing the cost prices of the products and services. Reduction of the cost will help to increase the potential consumers for the products or services. It also assures timely availability of the product.

4) Consumer Awareness:
Marketing helps society by informing and educating consumers. The function of marketing is to fulfill the needs of the consumers. Marketing helps consumers to know about new products and services available in the market and their usefulness to the customer. Marketing provides satisfaction to society by supplying relevant information, goods, and services to the people of society according to their demands and taste.

5) Increase in National Income:
Every economy revolves around marketing, production, and finance to the industry. The scientifically organized marketing activities help in the economic development of the country. Effective marketing of products and services result in industrialization, more job, and makes the economy stronger and more stable.

3) State the functions of warehouses.

Answer: A warehouse is defined as “an establishment for the storage or accumulation of goods.
Following is the functions of warehouses:

1) Storage:
This is the basic function of warehousing. Surplus commodities which are not needed immediately can be stored in warehouses. They can be supplied as and when needed by the customers.

2) Price Stabilization:
Warehouses play an important role in the process of price stabilization. It is achieved by the creation of time utility by warehousing. In warehouses, usually large stock of goods is kept. Whenever there is a shortage in the market, goods can be immediately supplied through warehouses, which helps in price stabilization to avoid a rise in price due to demand and supply differences.

3) Risk bearing:
When the goods are stored in warehouses they are exposed to many risks in the form of theft, deterioration, fire, etc. Warehouses are constructed in such a way that they minimize these risks. A warehouse keeper has to take reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, the warehouse keeper shall be liable to the owner of the goods.

4) Financing:
Loans can be raised from the warehouse keeper or from financial institutions against the goods stored by the owner. Goods act as security for the warehouse keeper or for financial institutions. In this manner, warehousing acts as a source of finance for the businessmen for meeting business operations.

5) Grading and Packing:
Warehouses nowadays provide the facilities for packing, processing, and grading goods. Goods can be packed in convenient sizes as per the instructions of the owner.

6) Transportation:
Warehouses can provide transportation facilities to bulk depositors. It collects goods from the place of production and also sends goods to the place of delivery at the request of the owner.

Q. 8. Answer the following questions : (Any One)  (8)

1) What is Insurance? Explain the principles of insurance.

Answer: Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Insurance is a contract between the insurer and the insured, whereby the insurer agrees to compensate the insured against loss. The insured has to pay a certain fixed sum of money on a timely basis to the insurer.

Following are the Principles of Insurance:

1) Principle of Utmost good faith:
In all types of insurance contracts both the parties must have utmost good faith towards each other. The insurer and insured must disclose all material facts clearly, completely, and correctly. The insured must provide complete, clear, and correct information on the subject matter of insurance to the insurer. Similarly, the insurer must provide relevant information regarding the terms and conditions of the contract. Failure to provide complete, correct, and clear information may lead to the non-settlement of a claim.

For example, Mr. Shantanu has not provided information regarding his heart surgery at the time of taking the policy. After his death, the insurance company comes to know about this fact. As Mr. Shatanu has not provided correct and complete information at the time of taking a policy, an insurance company can refuse to give compensation to his family members.

2) Principle of Insurable interest:
Insurable interest means some financial interest in the subject matter. The insured must have an insurable interest in the subject matter of insurance. Insurable interest is applicable to all insurance contracts. It is said to have an insurable interest in subject matter when the existence of that subject matter puts the insured in financial benefit. Whereas the nonexistence of subject matter put him into financial loss.

For example,
i) a person has an insurable interest in his own life and property.
ii) a businessman has an insurable interest in the goods he deals in the property of a business.
In life insurance, the insurable interest refers to the life insured. Insurable interest must exist at the time of taking a life insurance policy. In fire and marine insurance, the insurable interest must be present at the time of taking policy and at the time of occurrence of loss.

3) Principle of Indemnity:
Indemnity means a guarantee or assurance to put the insured in the same financial position in which he was immediately prior to the happening of the uncertain event. This principle is applicable to fire, marine, and general insurance. It is not applicable to life insurance as loss of life can never be measured in monetary terms.

In case of death of the insured, the actual sum assured is paid to the nominee of the insured. Under this principle, the insurer agrees to compensate the insured for the actual loss suffered. The amount of actual compensation is limited to the amount assured or the loss, whichever is less.
For example, If the property is insured for Rs. two lacs and if the loss by fire is Rs.one lac, then the insured can claim compensation of Rs.one lac only.

4) Principle of Subrogation:
This principle is applicable to all contracts of indemnity. As per this principle, after the insured is compensated for the loss due to damage of the property insured, then the right of ownership of such property passes on to the insurer. This principle is applicable only when the damaged property has any value after the event causing the damage.

For example, Mr. A owns a two-wheeler. The vehicle was stolen and subsequently, Mr.A filed a complaint at the local police station. Upon receiving a report from police, the insurance company compensated fully Mr.A for the loss of the vehicle. Later on, the stolen vehicle was recovered by police. In this situation, the owner of the vehicle does not have any claim over the vehicle as he has already subrogated i.e. transferred the ownership rights of the vehicle to the insurer. The insurer gets every right to sell or to scrap the said vehicl.

5) Principle of Contribution:
This principle is applicable to all contracts of indemnity where the insured has taken out more than one policy for the same risk or subject matter. Under this principle, the insured can claim the compensation only to the extent of actual loss either from one insurer or all the insurers. If the one insurer pays full compensation then that insurer can claim a proportionate amount from other insurers from whom the insured has taken policy.

For example, Ms. Sayali insures her property of Rs. Two Lac Fifty Thousand with two insurers, with T Insurance Co. for Rs.One Lac(2/5th of the property value) and R Insurance Co. for Rs.One Lac Fifty Thousand (3/5th of the property value). If Ms. Sayali ‘s property is destroyed and the loss is worth Rs. One Lac Twenty Thousand, then both insurance companies will contribute towards actual loss i.e.Rs.One Lac Twenty Thousand. Thus company T will pay RS.48000/- (2/5th of the loss) and company R will pay Rs. 72000/-(3/5th of the loss).

6) Principle of Mitigation of loss:
Insured must always try to minimize the loss of the property, in case of uncertain events. The insured must take all possible measures and necessary steps to control and reduce losses. Hence, it is the responsibility of the insured to protect the property and avoid loss.
For example, A house of Mr. Jayant is on fire due to an electric short circuit. In this case, Mr. Jayant cannot remain passive and must try his best to save his house from fire. Mr. Jayant must be active and cannot watch his house burn, just because the house is insured.

7) Principle of Causa-Proxima:
The principle of causa Proxima means, when a loss is caused by more than one cause, then the proximate cause of a loss should be taken into consideration to decide the liability of the insurer. The property is insured against some causes and not against all causes, in such a case, the proximate cause of loss is to be found. If the proximate cause is the one that is insured against, the insurance company is bound to pay compensation and vice versa.

For example, a house was insured against the risk of theft. There was a theft in the house and before leaving, the house was set on fire by thieves. Now, there are two causes of loss, theft, and fire, and the nearest cause of loss was the fire. As the house was insured against theft and not by fire, the insured will not get any compensation from an insurance company for loss by fire. But, he will get compensation for the property lost by theft

2) Explain the functions of marketing in detail.

Answer: The success of a business is difficult without effective marketing. Marketing deals with the exchange of goods and services to satisfy the needs of consumers. Marketing functions help to study the needs of the consumers and facilitate to satisfy them.
Following are some of the important functions of marketing :

1) Marketing Research:
Effective marketing is possible when a business takes initiative to identify the needs and wants of the consumers in the market. To identify the needs of the consumers, there is a need to collect information from the consumers and analyze the same is known as Market Research. It helps to find out what do consumers want to buy, when do consumers buy, in what quantity they want to buy, and at what price.

2) Buying and Assembling:
It involves collecting raw material from different sources at one place for production. This function is important as the quality and price of raw material determine the cost and quality of the final product.

3) Market Planning:
After assessing the need of marketing, the business needs to chalk out the marketing plan and strategies to achieve the desired objective. Market planning is the process of organizing and defining the marketing objectives of the business and creating strategies to achieve them. It is the comprehensive blueprint that will help to draw an outline business’s overall marketing efforts.

4) Product Development:
Product development and design play an important role in the selling of the product. There is a need to develop a product that suits the needs of the consumer. Product design includes decisions related to quality, standards, shape, design, packing, colour, etc. of the product. The consumer always prefers better and attractively designed products. Good design of the product gives a competitive advantage to the business.

5) Standardisation and Grading:
Standardization means determining standards related to the process, size, quality, design, weight, colour, etc. of the product. It helps in ensuring uniformity in the quality of the product. It helps in achieving customers’ loyalty towards the product. Grading is the process of classification of products according to similar characteristics and/or quality. Grading is done on the basis of their features like size, shape quality, etc. Generally grading is done in the case of agricultural products like wheat, rice, potatoes, etc.

6) Packaging and Labelling:
Package and Label create the first impression on the consumer about the product. Attractive packages and labels can help to make the product successful. Packaging means designing the package for the product. It helps to avoid breakage, damage, and destruction of the product. Packing material includes bottles, containers, plastic bags, tin, wooden boxes, jute bags, bubble bags, packing foam, etc.
A label is a slip that is found on the product and provides all the information regarding the product and its producer. The slip-on in which all this information is provided is called a label and its process is called labeling.

7) Branding:
Every businessman wants to have a special identity in the market for his product. Branding is the process of giving a special identity to a product through a unique brand name to differentiate it from competitors’ products. In simple words giving a distinct name to one’s product is called branding. Registered brands are known as Trademarks. Trademarks can not be copied. Branding helps to get recognition among the consumers. It can help to get new business and increase brand awareness in the market.

8) Customer Support Service:
The customer is the king of the market hence business needs to take the necessary steps for the satisfaction of the customer. Business needs to take every possible effort to provide support services to the customer. Timely support services help to gain customers’ loyalty. The business can provide the support services like Pre-sales service, consumer helpline, after-sales service, technical assistance, product demo, etc. to the customers. These services help in getting, retaining, and growing the customers.

9) Pricing of Product:
Pricing is one of the most important as well as challenging functions of marketing. Many times price of the product decides the success or failure of the product. Pricing plays an important role in the market where there is cutthroat competition. While determining the price of the product businessman needs to consider factors like cost, desired profit, price of the competitor’s product, demand for the product, market condition, etc.

10) Promotional Channels:
Promotion is the process of informing the consumers about the products, their features, uses, prices, etc, and encouraging them to buy these products. Advertising, Personal selling, Publicity, and Sales Promotion are some of the important tools of promotion. Business uses a combination of all or some of these four methods for promotion as per the need of the business. Promotional activities help to increase brand awareness in the market.

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