Demonetisation

Correct answer: A. Which payment mode customers are adopting

Information on customer payment behaviour is important for sales strategy. Market information becomes the base of decisions.

Correct answer: A. To exchange old notes and receive valid payments

Banking system became necessary for note exchange and receiving new payments. It was a step towards formal trade.

Correct answer: B. Ask for legally valid payment mode

The governing concept is legal tender: a payment instrument can settle a debt only when the law recognises it as valid for that purpose. Once the specified old notes ceased to be legal tender, a shopkeeper was not required to accept them in an ordinary sale. The sensible and lawful action was to request cash that remained valid or another accepted method, such as a card or digital transfer, and to issue a proper bill. Option A could create a compliance problem, while C gives away the goods unnecessarily and D destroys evidence of the transaction. Therefore, option B is correct.

Correct answer: C. Cost management issue

Digital payment charges can affect business cost. Therefore it should be considered in cost management.

Correct answer: A. Deposit and exchange of notes

People went to banks to deposit and exchange old notes. This temporarily increased banking activity.

Correct answer: A. It made digital payments and money transfers more convenient

When old high-value notes were withdrawn during demonetisation, the availability of cash became limited. Fintech tools, such as digital wallets, UPI and online banking, made payments and money transfers faster and more convenient. Therefore, option A is correct. Option B is incorrect because digital transactions are generally traceable rather than a way to hide cash. Exam tip: Promotion of digital payments is an important effect of demonetisation.

Correct answer: A. Monitoring actual cash and digital receipts became necessary

Controlling involves monitoring actual results. Checking cash and digital receipts became necessary.

Correct answer: A. Getting receipt and digital payment proof

The governing concept is consumer protection through proof of purchase and transaction transparency. A receipt records the seller, product, price and date, while a digital payment record can show that money was actually transferred. Together, these documents help a consumer seek correction, refund or other relief if the product is defective, the amount is disputed or the seller denies the sale. Option B removes useful evidence; C accepts an unfair practice; and D conceals information that consumers need. Thus option A is the only choice that strengthens accountability and consumer rights.

Correct answer: A. Creating an opportunity from a problem

The cash shortage was a business problem, but the entrepreneur identified an unmet customer need and introduced prepaid cards as a practical payment solution. This reflects opportunity recognition, innovation, and adaptation to a changing business environment. Nothing in the example suggests unethical conduct, removal of tax rules, or closure of production. Therefore option A is correct.

Correct answer: A. Economic policy affected technology and consumer behaviour

One economic decision affected digital payments and consumer behaviour. This shows that environment components are connected.

Correct answer: A. Daily reconciliation of cash receipts and payments

During demonetisation, cash availability and cash transactions changed rapidly. Daily reconciliation of cash receipts and payments helps a business track available cash, payment obligations, and discrepancies promptly. Keeping no records or making sales without invoices weakens control, while avoiding bank deposits does not support transparent transactions. Exam tip: In cash-control questions, prefer systematic measures such as recording, reconciliation, and banking.

Correct answer: A. Continuing sales

The governing concept is the continuity and convenience of business transactions through technology. If customers do not have exact change or small valid notes, a digital wallet, card, QR payment or bank transfer can complete the purchase without requiring physical cash. The shop therefore avoids losing willing customers and can continue normal sales, subject to applicable records and rules. Digital payment does not cancel tax obligations, make goods free or remove the need for banking arrangements. Those choices confuse payment convenience with unrelated or false benefits. Hence option A correctly identifies the commercial advantage.

Correct answer: A. One policy affected banking sales technology and customer behaviour together

Impact on many areas together shows complexity. Business environment cannot be understood by only one cause.

Correct answer: A. Matching bank deposits with sales bills

Matching bank deposits with sales bills can show validity of income. Good records help in verification.

Correct answer: D. Cancelling orders without information

The governing concept is customer relationship management, especially clear communication during an unusual business disruption. Demonetisation could create payment difficulties, delays and uncertainty, so a responsible shop should explain available payment methods, accept valid payment and provide a receipt. These actions build trust and allow the customer to understand what will happen. Cancelling an order without informing the customer gives no opportunity to arrange another payment or solution; it may cause inconvenience, disappointment and loss of confidence. Therefore option D is the harmful decision. The other three options are transparent and service-oriented.

Correct answer: A. Digitalisation of business process

Online orders and digital payments make business processes digital. This can be called technological adaptation.

Correct answer: A. Flexibility in payment policy

Accepting payment through bank transfer shows flexibility in the wholesaler’s payment policy. During demonetisation, cash availability was limited; accepting a banking or digital mode allowed retailers to continue purchases and helped maintain business activity. Withdrawal of legal tender refers to the demonetisation measure itself, not to the payment option offered by the wholesaler. Exam tip: When a business accepts alternative payment modes in a difficult situation, identify it as flexibility in payment policy.

Correct answer: C. It never affects businesses

Demonetisation can affect businesses. In incorrect statement questions pay attention to wording.

Correct answer: A. Because digital payments increased

When digital payments increase the risk of online fraud may also increase. Secure systems maintain customer trust.

Correct answer: A. The timing and volume of cash receipts and payments changed

After demonetisation, the availability of currency in circulation fell sharply, affecting both cash collections from customers and cash payments to suppliers and employees. Businesses therefore had to revise their cash budgets to estimate possible cash shortages or surpluses. Closing bank accounts was not required; rather, the use of banking and digital payment modes increased. Exam tip: A cash budget is mainly based on the timing of cash receipts and cash payments.

Correct answer: A. It helps verify transactions

Payment proof, such as a receipt, bank statement, or digital payment record, shows that a payment has actually been made. During demonetisation, as banking and digital transactions increased, such proof became useful for maintaining records, improving transparency, and verifying transactions. It does not by itself eliminate tax liability. Exam tip: associate payment proof with transaction authenticity and transparency.

Correct answer: A. Attracting customers during low demand

Demand may fall during cash shortage so discount can attract customers. This is a sales promotion measure.

Correct answer: A. Promotion of digital payments and formal economy

Demonetisation also aimed to promote digital payments and formal transactions. Link it with wider economic reform.

Correct answer: A. Accepting digital payments and maintaining records

Employees should understand new payment processes. Proper training improves both service and records.

Correct answer: A. Emergency payment plan and digital system

An emergency payment plan protects operations during crisis. Digital systems are important for future preparedness.