Class 11 Business Studies · Original EZT practice
Business, Trade and Commerce (Class 11 Business Studies Chapter 1): what makes an activity a business
A shopkeeper, a doctor and a factory owner all earn - but only some of what they do counts as "business" in this subject. This chapter draws the lines: business versus profession versus employment, what trade really includes, and why risk is the price of profit. Below: the ideas in plain words, then original EZT practice with worked answers. (Note: this is original practice, not a textbook exercise key.)
10 original worked examples, 10 fresh self-check questions, with explained answers. These are not copied textbook exercises, an official chapter index or a full answer key. No affiliation with NCERT is claimed.
Official sources for topic and edition context, checked 17 October 2026:
1. Business, profession, employment: three ways to earn
Business produces or trades goods and services for profit, regularly. A profession needs specialised knowledge, training and membership of a professional body - a doctor, a chartered accountant. Employment means working for someone else for a salary. The tests are: who decides the work, what qualification is needed, and where the reward comes from.
2. What counts as business: production, exchange, regularity, profit
Four tests: dealing in goods or services, production or exchange of them, dealings done regularly (a one-off sale is not business), and a profit motive. Risk - the chance of loss - is inseparable from all of it.
3. Trade and its auxiliaries
Commerce = trade + auxiliaries to trade. Trade is buying and selling; the auxiliaries remove the gaps between producer and buyer: transport (place), warehousing (time), insurance (risk), banking (money), advertising (knowledge).
4. Objectives of business
Earning profit is the core economic objective - it pays for survival, growth and expansion. But a lasting business also serves people: fair prices, honest quality, jobs, and paying its dues to society.
5. Business risks: the price of profit
Risk is the possibility of loss from causes you cannot fully control - demand shifts, competition, natural events, theft, price changes. You can insure some risks and manage others, but no business escapes risk completely; profit is partly the reward for bearing it.
Choose, solve, check, then try a fresh question.
Before calculating, read the method prompt and name the condition that makes it useful. Write your own attempt. Open the steps only when you need them, and use the check to catch a wrong sign, unit or interpretation. Finish with the fresh question before reading its answer.
A chartered accountant runs her own audit practice. Business or profession?
Choose the method: Business produces or trades goods and services for profit, regularly.
EZT practice question
A chartered accountant runs her own audit practice. Business or profession?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: profession - it rests on specialised qualifications and ICAI membership, not on trading goods.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
Give one feature that separates employment from business.
Choose the method: Business produces or trades goods and services for profit, regularly.
EZT practice question
Give one feature that separates employment from business.
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: in employment you work under someone else's direction for a fixed salary and carry no business risk; in business you decide the work yourself and carry the risk of loss.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
Ravi sells his old phone once on a resale site. Is that a business?
Choose the method: Four tests: dealing in goods or services, production or exchange of them, dealings done regularly (a one-off sale is not business), and a profit motive.
EZT practice question
Ravi sells his old phone once on a resale site. Is that a business?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: no - business needs regular, repeated dealings; a single personal sale fails the regularity test.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
A kirana store sells groceries daily for profit. Which four features make it...
Choose the method: Four tests: dealing in goods or services, production or exchange of them, dealings done regularly (a one-off sale is not business), and a profit motive.
EZT practice question
A kirana store sells groceries daily for profit. Which four features make it a business?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: it deals in goods, exchanges them for money, does so regularly, and earns profit - all four tests pass.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
Apples grown in Himachal are sold in Chennai. Which auxiliary removes the...
Choose the method: Commerce = trade + auxiliaries to trade.
EZT practice question
Apples grown in Himachal are sold in Chennai. Which auxiliary removes the "place" gap, and which removes the "time" gap for fruit stored off-season?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: transport removes the place gap; warehousing (cold storage) removes the time gap.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
A trader insures her warehouse stock. Which auxiliary of trade is this, and...
Choose the method: Commerce = trade + auxiliaries to trade.
EZT practice question
A trader insures her warehouse stock. Which auxiliary of trade is this, and what gap does it remove?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: insurance - it removes the risk gap by compensating for losses from fire, theft or damage.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
Why is profit called essential even for a business that claims to serve society?
Choose the method: Earning profit is the core economic objective - it pays for survival, growth and expansion.
EZT practice question
Why is profit called essential even for a business that claims to serve society?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: profit funds survival, growth and rewards for risk - without it the business cannot continue serving anyone.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
A shop sells defective goods at full price and earns more this month. Does...
Choose the method: Earning profit is the core economic objective - it pays for survival, growth and expansion.
EZT practice question
A shop sells defective goods at full price and earns more this month. Does higher profit always mean a healthier business?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: no - profits made by cheating destroy trust and future sales; lasting business needs fair dealings, not just this month's numbers.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
A fashion boutique's stock goes out of style unsold. What kind of cause is this?
Choose the method: Risk is the possibility of loss from causes you cannot fully control - demand shifts, competition, natural events, theft, price changes.
EZT practice question
A fashion boutique's stock goes out of style unsold. What kind of cause is this?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: a human/market cause - changing tastes and demand, not a natural one.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
Can a business eliminate all risk by insuring everything?
Choose the method: Risk is the possibility of loss from causes you cannot fully control - demand shifts, competition, natural events, theft, price changes.
EZT practice question
Can a business eliminate all risk by insuring everything?
Show the worked solution
- Name the activity, service, objective or risk in the example.
- Apply the chapter test: regularity, profit, profession, auxiliary or type of risk.
- Give the conclusion with the reason that makes it fit.
Answer: no - insurance only covers some losses; risks from competition, changing demand or bad decisions stay with the owner.
Check: The classification uses the chapter test and the reason in the worked statement.
Watch for this: Do not call every earning activity a business; regular dealings, profit motive and the absence of a professional-body qualification matter.
Now try it yourself
Create one new example by changing the substance, activity or body response and solve it by the same test.
Check your answer
Keep the final result in your notebook; the page-level Try It prompts are intentionally answer-free.
The worked answer above shows the method; independent practice should not become another answer key.
Try it yourself
Work these on paper before checking any notes. Answers are deliberately not shown here.
- Give two differences between business and profession.
- Name four auxiliaries to trade.
- Is occasional stock-market selling a business? Why?
- List two economic and two social objectives of business.
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Questions about this practice page
- What is business in business studies?
- regular production, purchase or sale of goods and services done with a profit motive - a one-off sale or a hobby does not qualify.
- How does a profession differ from business?
- a profession requires specialised knowledge, formal training and membership of a professional body; business needs no prescribed qualification and centres on trading or producing for profit.
- What are auxiliaries to trade?
- services that remove the gaps between producer and buyer - transport, warehousing, insurance, banking and advertising.
- Why is risk called an essential feature of business?
- every business faces the possibility of loss from causes it cannot fully control; profit is partly the reward for bearing that risk.
- Are these the NCERT exercise questions for Business, Trade and Commerce?
- No. EZT pages are original practice on this chapter - use them to prepare for the textbook exercises, not as a substitute for your book.