Demonetisation

Demonetisation made it important to examine unusual or large cash deposits. The purpose was not to change company names, remove workers, or alter market value. Authorities wanted to know whether the deposited money came from a genuine and declared source. This supported tax compliance, transparency, and action against unaccounted income.

Therefore, option B is correct because tracing the source of income directly describes the purpose of checking cash deposits. A, C, and D are unrelated to financial verification. The check did not automatically prove that every large deposit was illegal; it was a method of comparing deposits with records, declared income, and a person’s normal financial activity.

Rising demand for digital payments created a market for e-payment services. Opportunity can arise by solving a problem.

Supply chain can slow down when transport and wage payments are delayed. Cash-dependent activities are more affected.

A payment made through a bank account along with an invoice creates a documented and traceable record. Therefore, it is the best example of a formal transaction. A cash payment without a receipt lacks proper proof and record, so it is relatively informal. Exam tip: Identify formal transactions through banking channels, bills, receipts, and written records.

Easy payment options provide customer convenience. This helps a business offer better service than competitors.

Withdrawal and deposit rules were regulatory controls linked with government and banking system. Such rules can affect business decisions.

Government economic policy is an important component of external environment. Demonetisation made its impact clear.

Clear information and payment convenience maintain customer trust. Goodwill is protected through service behaviour during crisis.

Direct payment of salaries into bank accounts was useful after demonetisation because it reduced dependence on old currency notes and created a clear payment record. This method is more transparent and secure. Unrecorded cash payments reduce transparency, while stopping salaries is not in employees' interest. Exam tip: In demonetisation questions, identify banking and digital modes as formal, recorded methods of payment.

Demonetisation changed the way customers paid for goods and services. Cash became difficult to use for a period, while card and digital payments became more important. A sales report arranged by payment mode could show how much business came through cash, cards, mobile payments, or other channels. This information helped managers understand changing customer behaviour.

Thus, option A is correct. It could help a business plan cash handling, digital facilities, staffing, and stock decisions more intelligently. Reports about employees’ height, wall colour, or shop music do not explain sales or payment trends. The report was useful because it connected sales figures with the method through which customers actually paid.

Purchasing behaviour may change when cash availability changes. Payment ability is also considered in demand forecasting.

Recorded payments can strengthen financial records. Transparency is important as a long-term benefit.

Receiving payment through bank account is easy and recorded. It increases formality for small businesses.

Currency system is linked with economic environment. Instability in it can immediately affect business.

After demonetisation, cash availability was restricted, so relying only on cash payments would have been an unsuitable business decision. It could affect sales, customer convenience, and day-to-day transactions. Adopting digital payments and maintaining organised banking records were more appropriate responses. Exam tip: In such questions, select the option that does not adapt to the changing business environment.

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

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

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.

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

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