Demonetisation

Correct answer: C. External economic and regulatory risk

Demonetisation was an economic and regulatory change coming from outside the business. Such risk has low control but can be prepared for.

Correct answer: D. Share of digital and banking transactions in total sales

The share of recorded payments in total sales shows movement towards formalisation. Ratios are more useful for measurement.

Correct answer: A. Negotiate bank transfer terms with supplier and prepare cash priority plan

Supplier terms and cash priority should be managed together. This protects both supply and valid payment.

Correct answer: C. Payment mode is changing; demand may not have fully fallen

An unchanged total customer count indicates that customers have not completely stopped visiting the market or business. The fall in cash sales may therefore reflect a shift to digital payments, cards, or other non-cash modes. Hence, a fall in cash sales alone does not prove that total demand has ended. Option A is the closest distractor, but it is not supported when customer numbers remain unchanged. Exam tip: interpret sales data along with indicators such as payment mode and customer footfall.

Correct answer: D. Customers lacked adequate card access, digital awareness, or trust in digital payments

A point of sale machine only creates the facility to accept payment; it does not automatically make customers able or willing to pay digitally. Sales may still not rise if customers do not have cards, lack digital-payment awareness, or do not trust the safety of such payments. A temporary cash shortage or poor internet connection can affect sales, but inadequate customer readiness and trust are the deeper structural reasons. Exam tip: For the success of a digital facility, check customer access, capability, and confidence.

Correct answer: A. Tax scrutiny and questions on source of income

The direct answer is A: the mismatch increases the risk of tax scrutiny and questions about the source of income. The reasoning is straightforward. A business deposits a large amount of cash, but its sales bills show only low sales. Tax authorities or auditors may ask where the extra cash came from and whether all sales were recorded. If records, invoices, bank deposits and accounts do not agree, the business may face investigation, demands for explanation, additional tax, penalties or suspicion of unreported income. A does not claim that wrongdoing is automatically proved; it correctly identifies the compliance risk created by inconsistency. B is wrong because a deposit-sales mismatch does not improve product quality. C is wrong because customer service does not automatically rise from unexplained cash deposits. D is unrelated because brand colour has no connection with income documentation. The safe business practice is to maintain truthful invoices, proper books, bank records and evidence for every receipt. Exam cue: financial records that do not match create tax and source-of-income risk.

Correct answer: B. Transparency in worker payments and stronger labour records

Paying wages through bank accounts creates a formal, verifiable record of every payment. It improves transparency, strengthens labour records, and helps management with compliance and auditing. Option A is the opposite, because bank-based payments make records clearer rather than hidden. Exam tip: Link bank payments with transparency, accountability, and better record-keeping.

Correct answer: C. Providing local language training low-data options and help centre

Rural markets may face language connectivity and training barriers. Simple support increases adoption.

Correct answer: D. Clarifying payment process to customers suppliers employees and banks

Many stakeholders are affected by payments in demonetisation. Clear communication protects both relationships and operations.

Correct answer: B. Credit sales increase and suppliers demand quick payment

Credit sales block cash and quick supplier payment needs cash. This increases working capital need.

Correct answer: C. Its objective was linked with black money, fake currency and formal transactions

The governing concept is balanced evaluation of a public policy: its stated objectives should be separated from claims that it achieved every objective completely. Demonetisation was presented as a measure connected with curbing unaccounted money and counterfeit currency and encouraging formal, traceable transactions. However, it is inaccurate to say that all black money disappeared, that every business received equal benefit, or that no cash shortage or adjustment problem occurred. Option C is correct because it carefully describes the policy’s intended areas without claiming total success. Options A and D use absolute language, while B makes an unsupported universal claim about business outcomes.

Correct answer: A. Customer disputes and loss of trust

Refund is necessary for failed or wrong digital deductions. Without refund process customer trust falls.

Correct answer: A. Payment success rate and failed transaction resolution time

In digital sales payment success and failed payment resolution are important. These were not key metrics in cash sales.

Correct answer: B. Preparing payment priority list and paying wages rent and key suppliers first

A priority list protects essential payments. When resources are limited in crisis sequencing is necessary.

Correct answer: C. Keeping a digital help counter, a valid cash option and receipt facility together

The governing concept is inclusive customer service: a business should recognise differences in customers’ technology access, digital literacy, payment capacity and need for clear information. A digital help counter can assist people who want or need electronic payment, but inclusion also requires a lawful cash alternative and proper receipts for customers who cannot immediately use digital tools. Option C is correct because it combines guidance, choice and transaction transparency instead of excluding a group. Option A excludes people without smartphones, option B removes genuine customer choice, and option D prevents informed consent and may create confusion or disputes. An inclusive model supports adaptation without forcing one method on everyone.

Correct answer: C. Assessing cash-dependent sales, expenses and payment risk

A cash dependence index shows how much of a firm's sales, expenses and payment processes rely on cash. In a situation such as demonetisation, high cash dependence can disrupt transactions, reduce customer purchases and delay payments. Therefore, its main purpose is to assess cash-based activities and the associated risks. Closing bank accounts would worsen the problem; expanding banking and digital payment options is more appropriate. Exam tip: An index of this kind is generally used to measure risk and plan alternatives.

Correct answer: A. Adopting digital payments with security verification and customer alert system

Digital payment solves cash shortage but security is also necessary. Verification and alerts reduce risk.

Correct answer: B. Customer dispute and weak record

Payment proof reduces customer disputes and strengthens accounting records. Without proof trust becomes weak.

Correct answer: D. Investing in secure payment infrastructure and employee training

Payment infrastructure helps continue sales and training reduces errors. This investment is based on learning from crisis.

Correct answer: A. Sales of a cash-dependent shop fell, while demand for a digital payment app company’s services increased

Option A is correct. Relativity of the business environment means that the same external change affects businesses differently according to their nature and circumstances. Demonetisation could reduce purchases at a cash-dependent shop while increasing demand for a digital-payment company. Option B is incorrect because the impact is not identical on every business. Exam tip: For a question on ‘relativity’, look for one event producing different effects in two sectors.

Correct answer: A. Bank deposits alone are not a success metric

Customer experience should be viewed along with financial records. Balanced management needs both indicators.

Correct answer: A. Restructuring of order and payment risk

The correct answer is restructuring of order and payment risk. In a digital prepaid order, payment is received in advance, reducing the platform’s risks of cash collection, non-payment at delivery, and cash handling. Shifting a production plant concerns the location of manufacturing, not a change in the payment method. Exam tip: For demonetisation-based questions, connect reduced cash use with digital payments and changes in business operations.

Correct answer: A. Keeping bank or digital records of wages and sales

Recorded wages and sales are steps towards formalisation. In the unorganised sector this can be a major change.

Correct answer: B. Multi-payment recorded model with customer support

A multi-payment recorded support model can work during disruptions. Resilience comes from options and control.

Correct answer: A. Customer data security and false payment claims

The direct answer is A: customer-data security and false-payment claims must also be controlled. Moving customers from cash to digital payment creates useful records and convenience, but it also creates new risks. Customer names, phone numbers, account details, transaction information and sometimes identity documents must be protected from theft or misuse. The company must also verify whether a payment was genuinely received, because a person might show a fake screenshot, make a duplicate claim, or exploit an incentive scheme. Therefore the correct chain is: digital conversion increases data and transaction dependence; greater dependence requires privacy, secure systems, staff controls, reconciliation and payment verification; these controls reduce fraud and loss. B, C and D are ordinary workplace or operating matters but do not represent the main risk created by digital payments. A is correct because it includes both privacy and financial verification. Incentives should be supported by clear eligibility rules, secure access, receipts and reconciliation. Memory cue: digital payment brings two checks—protect the data and confirm the money.