Purchase and Sale – Long Answer Questions (CBSE Class 10 EOB)
Medium Level (Application & Explanation)
Q1. Define purchase and sale. How does transfer of ownership take place, and why do both always go together? Illustrate with examples.
Answer:
A purchase happens when a buyer pays money and gets ownership of goods or property. A sale happens when a seller transfers ownership to the buyer in exchange for money.
Transfer of ownership means the buyer now has the right to use, control, and decide about the goods. The seller gives up this right after receiving payment.
Sale and purchase are two sides of the same transaction. One cannot occur without the other.
Key elements are: a willing seller, a willing buyer, an agreed price, and exchange of goods and money.
Examples:
Buying a notebook from a shop: your purchase is the shopkeeper’s sale.
A family buys a house and becomes the owner after paying.
A company purchases raw materials from a supplier; the supplier records a sale.
Q2. Explain why money and transfer of ownership are essential in a sale–purchase transaction. What conditions make a sale complete?
Answer:
In a valid sale–purchase, the buyer pays money and the seller transfers ownership. Without money, it is not a sale; without ownership transfer, it is not complete.
A sale is complete when:
There is a willing buyer and seller.
The price is fixed or agreed.
The goods/services are identified and available to transfer.
Ownership passes to the buyer, and the seller relinquishes rights.
Payment is made immediately (cash) or promised with terms (credit).
Transfer of ownership allows the buyer to use, resell, or consume the goods. The seller then cannot claim those goods.
Examples:
Buying a movie ticket transfers the right to watch the show.
A school pays for lab equipment (now the school owns it).
A buyer pays for a cold drink and becomes its owner at once.
Q3. As a buyer, what should you consider before making a purchase? Prepare a practical checklist and apply it to buying a smartphone.
Answer:
A smart buyer always checks need, quality/features, affordability, and social/cultural fit.
Practical checklist:
Need: Do I really need this now? Is there a cheaper alternative?
Features/Quality: Does it perform my required tasks? Is it durable?
Affordability: Does it fit my budget? Are there hidden costs (accessories, repairs)?
Safety/Compatibility: Warranty, service centers, and user reviews.
Cultural/Social: Does it align with family rules or personal values?
Applying to a smartphone:
Need: Online classes and calls or gaming/movie editing?
Examples: Grocery cash purchases vs. a shopkeeper buying stock from a wholesaler on 30-day credit.
High Complexity (Analytical & Scenario-Based)
Q6. A small retail shop wants to start selling on 30-day credit to regular customers. Analyze the benefits, risks, and a step-by-step credit policy they should adopt.
Answer:
Benefits:
Higher sales and customer loyalty.
Competitive edge over cash-only rivals.
Risks:
Delayed payments, possible bad debts, and cash flow stress.
Extra time spent on records and reminders.
Credit policy steps:
Define eligibility: Only verified, repeat customers with good history.
Set limits: Per-customer credit limit and maximum credit days (e.g., 30).
Use documentation: Invoices, delivery notes, and acknowledgment.
Offer incentives: Small discount for early payment.
Apply controls: Track due dates, send reminders at 7/15/25 days.
Manage collections: Escalation steps, partial payments if needed.
Review regularly: Adjust limits based on payment behavior.
Outcome: Balanced sales growth with risk control and healthier cash cycles.
Q7. A business selling air coolers faces low sales. Using marketing functions, propose a plan to align production with customer needs and improve sales.
Answer:
Diagnose the problem:
Timing: Demand peaks in summer; produce and stock accordingly.
Segmentation: Homes vs. shops; urban vs. semi-urban.
Awareness: Weak promotion or unclear benefits.
Action plan using marketing functions:
Market research: Survey temperature zones, income levels, preferred features (water tank size, noise, energy use).
Product: Add features like low power use, wheels, easy cleaning.
Price: Offer tiered models and festive discounts.
Place: Ensure availability in local electronics stores and online.
Promotion: Demo counters, leaflets, digital ads showing cooling performance.
Feedback loop: Track returns/complaints; refine next batch.
Result: Product–market fit, higher awareness, and season-ready inventory.
Q8. A school wants lab equipment on 30-day credit. As the seller, how will you assess creditworthiness, structure terms, and ensure a smooth sale and transfer of ownership?
Answer:
Assess creditworthiness:
Verify the school’s registration, reputation, and past purchase records.
Ask for references from other suppliers and check payment behavior.
Review available financial indicators (budget approvals or purchase sanctions).
Structure terms:
Clear invoice with due date (30 days), item details, and total.
Delivery note signed by the school at receipt.
Warranty and after-sales support in writing.
Offer early payment discount (e.g., 2% within 10 days) or add late fee.
Set a credit limit and require a purchase order.
Ensure smooth sale:
Demonstrate equipment, install if needed, train staff.
Transfer ownership upon delivery with agreed terms; maintain proper records.
Follow up at 15 and 28 days to ensure on-time payment.
Q9. “Profit is the reward for risk and ensures business survival.” Analyze this statement with links to sales, pricing, and continuous marketing.
Answer:
Businesses invest money and take risks to produce goods/services. Profit is the reward for taking these risks and managing costs well.
Profit arises when the selling price is higher than cost. Without enough sales at the right price, there is loss and possible closure.
Continuous sales bring regular cash flow, which funds wages, suppliers, and growth.
Marketing functions (research, promotion, distribution, after-sales) turn needs into demand, helping products become available, affordable, and known.
Example: If a bakery’s cake costs Rs. 120 to make and it sells at Rs. 150, profit is Rs. 30 per unit. Selling 200 cakes yields Rs. 6,000 profit, which funds new recipes, better ovens, and staff.
Conclusion: Consistent sales + sensible pricing + active marketing sustain profit and long-term survival.
Q10. After buying a soft drink, a customer finds the seal broken and complains. As a seller, design a customer satisfaction and recovery plan to retain trust and repeat sales.
Answer:
Immediate response:
Apologize, replace the item instantly, and ensure a fresh, sealed product.
Record the batch/brand to alert the distributor.
Short-term actions:
Display a return/replace policy to build confidence.
Train staff to check seals/expiry before billing.
Offer a small goodwill gesture (coupon/discount) to encourage repeat purchase.
Long-term plan:
Build a feedback system (register/QR code) to capture complaints.
Track recurring issues by brand or supplier and take corrective action.
