Chapter-4-Planning 

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Business Studies
  • Chapter
    Chapter-4-Planning 
  • Chapter Name
    Chapter 4 Planning
  • Category
    CUET (Common University Entrance Test) UG

MCQ-Based Questions for CUET Business Studies Chapter-4-Planning 

This page is prepared by HT experts and consists of MCQ-Based Questions for CUET Business Studies chapter-4-Planning with a detailed explanation of all the questions asked from 4-Planning. To find the solution to the MCQ questions click on the answer tab. Check out chapter-wise CUET Business studies MCQ questions. 

Practice Questions for CUET Business Studies chapter-4-Planning SET-1

Business Studies - MCQ on Planning

Class XII

Q.1. Planning is a process of

a. doing before thinking.

b. thinking without doing.

c. thinking before doing.

d. doing without thinking.

Answer:

(c)

Explanation: Planning is deciding in advance what is to be done in future. Thinking is necessary if something is to be decided for future.

Q.2. The collective ends toward which organisations direct its energies and activities is called

a. policies.

b. goals.

c. programmes.

d. rules.

Answer:

(b)

Explanation: Goals are the directions where an organisation wants to go in future.

Q.3. The guiding principles established by the company to govern actions, usually under repetitive conditions are called

a. objectives.

b. budgets.

c. programmes.

d. policies.

Answer:

(d)

Explanation: Policies are not the actual procedures of doing things but the things that we have to keep in mind while following the actual procedure. “Honesty is the best policy” means that we have to keep this in mind while following procedures.

Q.4. The rigid instructions that have to be followed are

a. rules.

b. budgets.

c. strategies.

d. objectives.

Answer:

(a)

Explanation: Rules are the plans that cannot be violated. Non-compliance of rules invites penalty e.g. parking vehicle in no parking zone invites fine.

Q.5. Derivative plans are made after formulating the basic plan. Derivative plans include

a. objective of the organisation.

b. policies and procedures to achieve basic plan.

c. overall goal determination.

d. preparing organisational structure.

Answer:

(b)

Explanation: Derivative plans refer to the policies, procedures, rules programmes, budgets etc. These are detailed plans to achieve the basic or main plan.

Q.6. A statement of expected results expressed in numerical terms is called

a. budget.

b. rule.

c. programme.

d. policy.

Answer:

(a)

Explanation: While preparing budget, we measure past activities and projected future activities in numerical terms so that actual performance can be compared to standard performance and improved and corrected.

Q.7. Factor that can adversely affect the planning is

a. external environment.

b. production process.

c. employees of the organisation.

d. management of the organisation.

Answer:

(a)

Explanation: External environment can render the whole planning useless. Suppose a company plans to sell old vehicles in the capital and subsequently government bans the sale of old vehicles. The external environment thus can nullify the planning process. Planning should be such that it has flexibility to cope with ever changing environment.

Q.8. Choice of alternatives is a part of

a. staffing process.

b. directing process.

c. controlling process.

d. planning process.

Answer:

(d)

Explanation: In planning we decide a favourable course of action and we choose this favourable course after evaluating various possible courses of actions.

Q.9. One of the limitations of planning is that

a. it is based on predictions.

b. it helps in anticipating future.

c. it reduces the risk.

d. it help in evaluating performances.

Answer:

(a)

Explanation: Planning involves predicting the future which is uncertain. If future is not predicted with reasonable accuracy, planning may become useless in changed environment.

Q.10. Change in the external environment of business is a/an

a. advantage of planning.

b. limitation of planning.

c. part of the planning process.

d. feature of planning process.

Answer:

(b)

Explanation: An organisation cannot change its external environment, it can only adapt to it. If external environment is not predicted reasonably accurately, planning becomes useless. Tata Motors planned their vehicle production in West Bengal but they had to shift it to other place because of the external factors and thus their planning regarding production in West Bengal had to be discarded.

Q.11. The purpose of planning is to influence the

a. internal environment of the business.

b. creditors of the business.

c. investors.

d. trade associations.

Answer:

(a)

Explanation: Planning means predicting external environment and then moulding the internal environment so that it can keep pace with external environment to achieve organisational goals and objectives.

Q.12. One of the drawbacks of planning is that it cannot be done in

a. procedures related to purchases.

b. production procedures.

c. emergency situations.

d. dealing with clients.

Answer:

(c)

Explanation: Planning consists a process that needs time and in emergency due to limited time, it is not possible to plan.

13. Planning is a part of management process and it is

a. the last function of management.

b. done right before controlling.

c. done after staffing.

d. the first function of management.

Answer:

(d)

Explanation: Planning is the first function of management. In any human activity, implementation comes after deciding which way to implement.

Q.14. One of the factors affecting planning is

a. objective.

b. strategy of competitors.

c. evaluating alternatives.

d. follow-up.

Answer:

(b)

Explanation: Competitors may formulate more favourable policies for customers that can affect the planning of the organisation.

Q.15. An example of single use plan is

a. programme.

b. rules.

c. methods.

d. procedures.

Answer:

(a)

Explanation: Programme is a single use plan because it is used once and needs to be adjusted for next uses e.g. programme to build a school.

Q.16. The last step in the process of planning is

a. evaluating alternatives.

b. setting planning premises.

c. follow-up and reviews.

d. choosing among different alternatives.

Answer:

(c)

Explanation: After planning various courses of actions, it needs to be reviewed if the plans fit in the scenario for which they are drafted.

Q.17. Single use plans are the plans

a. that are used once and need to be reformulated for next use.

b. that are used repeatedly.

c. that are related to procedures of workmen.

d. that related to routine matters.

Answer:

(a)

Explanation: These plans need to be adjusted for using second time because they are used for specific situations.

Q.18. The budget that is prepared on the basis of general market conditions, past sales trends, orders on hand and salesmen’s estimates is called

a. cash budget.

b. overhead budget.

c. material budget.

d. sales budget.

Answer:

(d)

Explanation: Sales budget is prepared to produce the goods and meet the market demand.

Q.19. The manner in which a certain activity is to be performed is called a

a. policy.

b. objective.

c. procedure.

d. budget.

Answer:

(c)

Explanation: Sequence of different steps in an activity is called procedure.

Q.20. A method is a formalised way of doing a task. Method is one step of a/an

a. policy.

b. strategy.

c. objective.

d. procedure.

Answer:

(d)

Explanation: A procedure is a collection of different steps organised in a sequential order and such steps are called methods.

Q.21. One of the limitations of planning is that

a. it reduces the risk.

b. it is a time consuming process.

c. it provides the basis of control.

d. it involves decision-making.

Answer:

(b)

Explanation: Planning takes time to evaluate alternatives and decide which one best suits the projected environment.

Q.22. One of the limitations or drawbacks of planning is

a. that it cannot anticipate change in fashion.

b. that it facilitates decision-making.

c. that it removes unnecessary activities.

d. that it targets the objectives of the organisation.

Answer:

(a)

Explanation: Change in fashion can nullify the process of planning. If an organisation plans to manufacture suits and afterwards suits become less popular, then planning to prepare suits becomes useless.

Q.23. Evaluation of alternatives is a part of

a. staffing process.

b. planning process.

c. organising process.

d. controlling process.

Answer:

(b)

Explanation: The main purpose of planning is to find a course of action which helps in effective and efficient utilisation of given human, material and technical resources. The course of action is found after evaluating different possible alternatives.

Q.24. Setting organisational objectives is a part of

a. organising process.

b. staffing process.

c. planning process.

d. controlling process.

Answer:

(c)

Explanation: Planning means deciding in advance the purpose for which an entity has been set up. Thus it includes setting objectives.

Q.25. Promoting people from within the organisation is a/an

a. objective.

b. policy.

c. goal.

d. procedure.

Answer:

(b)

Explanation: This is a policy because this has to be kept in mind while following procedures of selection. Policy is not a procedure but the guidelines that should be kept in mind while following the procedure.

Q.26. Planning is an important function of management because

a. it increases resources of the organisation.

b. it helps in selection process.

c. it increases the number of employees.

d. it focuses attention on objectives.

Answer:

(d)

Explanation: The aim of planning is to place a visible purpose in the minds of people so as to attain organisational objectives.

Q.27. Appealed policy is the policy

a. that is deliberately formulated by management.

b. that has been adopted due to outside forces.

c. that has been written in the company’s records.

d. that is formulated on the request of subordinates.

Answer:

(d)

Explanation: Appealed policy is followed on the request of subordinates so as to improve the sense of belonging of employees.

Q.28. Every organisation wants to increase its sales. Improving sales is a/an

a. policy.

b. programme.

c. objective.

d. goal.

Answer:

(d)

Explanation: Improving sales is a goal because it tells the desired direction not its extent or quantity e.g. improving sales is a goal whereas improving sale by 10% is an objective.

Q.29. “No parking” is an example of

a. policy.

b. objective.

c. rule.

d. procedure.

Answer:

(c)

Explanation: “No parking” is an example of rule because it will invite penalty if not followed and it is more specific than general like policy.

Q.30. There are two types of plans, standing and one time. Standing plans mean

a. plans that are used once.

b. plans that are related to workmen.

c. plans used repeatedly in similar situations.

d. plans that deal with suppliers.

Answer:

(c)

Explanation: These plans are standard plans that are used in repeated situations and are changed only in exceptional situations.

Q.31. Procedures and programmes play a vital role in

a. making policies.

b. setting objectives.

c. defining strategy.

d. day-to-day functioning.

Answer:

(d)

Explanation: Procedures and programmes are made to materialise the plans. They relate to daily activities of production purchase, sale etc.

Q.32. Policies are made to achieve

a. methods.

b. objectives.

c. rules.

d. procedures.

Answer:

(b)

Explanation: Objectives are the basic or main goals of the organisation, while policies are one of the subsidiary or derivative plans like methods, rules, procedures etc.

Q.33. One of the limitations of planning is that

a. it reduces flexibility in actions.

b. it increases flexibility in actions.

c. it provides basis for control.

d. it reduces risk.

Answer:

(a)

Explanation: Planning reduces flexibility as it defines a course of action that is to be followed while execution.

Q.34. A Business organisation sets the target to increase its sales by 15% in the next quarter. It is an example of

a. a goal.

b. a programme.

c. an strategy.

d. an objective.

Answer:

(d)

Explanation: Increasing sales by 15% are an objective because here we are quantifying the desired direction (goal) that is “increasing sales”.

Q.35. The steps taken in purchasing the material are collectively called

a. policy.

b. procedure.

c. objective.

d. rules.

Answer:

(b)

Explanation: Procedures are collections of steps to be taken for day-to-day activities like purchase, sale or production.

Q.36. Planning is a process related to

a. correcting the wrong actions.

b. defining the course of action.

c. measuring performances.

d. selecting new employees.

Answer:

(b)

Explanation: In planning we chalk out different courses of actions that will lead to the goal we want to achieve and then decide which plan of action will lead to the goals with efficient and effective utilisation of resources in a shorter period of time.

Q.37. Policies provide guidelines for actions. Thus policy is a/an

a. standing plan.

b. part of the programme.

c. part of the procedures.

d. one time plan.

Answer:

(a)

Explanation: Policies are used repeated while following procedures, methods or programmes which is why they are standing plans.

Q.38. “No smoking” is a/an

a. objective.

b. rule.

c. policy.

d. method.

Answer:

(b)

Explanation: “No Smoking” is a rule because its non-compliance will invite punishment or fine.

Q.39. Planning provides a definite course of action before the implementation. Thus it avoids

a. decision-making.

b. thinking before doing.

c. aimless and unnecessary actions.

d. goal setting.

Answer:

(c)

Explanation: Planning helps to reach the goals in a short period of time, and planning in advance means that unnecessary action will not be followed while execution.

Q.40. One of the advantages of planning is that

a. it is a costly process.

b. it brings order in place of chaos.

c. it is time consuming process.

d. it provides rigidity to the future course of action.

Answer:

(b)

Explanation: Planning recommends a desired course of action, thus it helps to reduce chaos due to unnecessary actions while execution.

Q.41. Policies are formulated to

a. deal with contingencies.

b. define organisational objectives.

c. write the steps of production.

d. guide decisions in repetitive situations.

Answer:

(d)

Explanation: Policies provide guidelines to be kept in mind while following procedures. For non-repetitive situations policies are not required and rule can be sufficient.

Q.42. One of the limitations of planning is that

a. it is an intellectual process.

b. it is a pervasive function.

c. it may become useless due to external changes.

d. it helps in decision-making.

Answer:

(c)

Explanation: Planning may become useless due to changes in external environment of the organisation. If a company plans to export gold and government imposes heavy tax on gold or bans the export of gold, in that scenario planning to deal in gold may not be profitable for the organisation.

Q.43. Policies are mainly formulated by

a. middle management.

b. top management.

c. employees of the organisation.

d. first line management.

Answer:

(b)

Explanation: Policies are general guidelines that are concerned with whole of the organisation. Top management decides on matters regarding the whole organisation.

Q.44. The first step in the planning process is

a. making short-term plans.

b. defining departmental targets.

c. formulating policies and guidelines.

d. setting objectives.

Answer:

(d)

Explanation: In planning, we first set up objectives to know where we want to go in future and then chalk out the desired course of action.

Q.45. Objectives provide direction to the organisation. Thus objectives are related to

a. sales procedure.

b. first line management.

c. whole organisation.

d. purchase procedure.

Answer:

(c)

Explanation: Objectives are the main goals of the organisation in measurable terms. Increasing production by 20% is an objective.

Q.46. Policies are derived from

a. methods.

b. procedures.

c. strategies.

d. objectives.

Answer:

(d)

Explanation: Objectives are main or basic plans of an organisation and policy is a subsidiary plan to achieve the main plan. This is why the subsidiary plans are derived from objectives.

Q.47. Standing plans are plans

a. that are used while recruitment.

b. that are used repeatedly in similar situations.

c. that are used once.

d. that are used to define objective.

Answer:

(b)

Explanation: These plans are formulated once and used repeatedly in similar situations. That is why they are called standing plans.

Q.48. Improving quality of the product is a goal and improving quality from 90% to 98% of production is

a. a plan.

b. also a goal.

c. a policy.

d. an objective.

Answer:

(d)

Explanation: Improving quality from 90% to 98% is an objective. Goals converted into measurable terms are called objectives.

Q.49. Planning is related to future. We anticipate future and plan a course of action that best suits the future environment. Thus planning is

a. forward looking.

b. backward looking.

c. observing the competitors.

d. changing the external environment of the organisation.

Answer:

(a)

Explanation: Planning means looking into the future. Planning aims at achieving objectives in future. Objectives cannot be achieved in past as past cannot be altered.

Q.50. Imposed policy is the policy

a. that is deliberately formulated by management.

b. that has been adopted due to outside forces.

c. that has been written in the company’s records.

d. that is formulated on the appeal or request of subordinates.

Answer:

(b)

Explanation: Imposed policy is one that is adopted due to outside forces e.g. giving preference to local people while hiring.

Practice Questions for CUET Business Studies chapter-4-Planning SET-2

Q.51. The policy of hiring only trained workers is a/an

a. appealed policy.

b. imposed policy.

c. originated policy.

d. written policy.

Answer:

(c)

Explanation: The policy of hiring only trained workers is an originated policy because this is deliberately formulated by management to guide decision-making at lower levels.

Q.52. Day-to-day operational plans are formulated by

a. top management.

b. employees of the organisation.

c. first line management.

d. middle management.

Answer:

(c)

Explanation: First line management is responsibility for running day-to-day operations which is the reason why first line management plans for day-to-day operations.

Q.53. One of the limitations of procedures is that

a. it serves as the basis for control.

b. it brings rigidity to the working.

c. it facilitates training of employees.

d. it prescribes a path of action.

Answer:

(b)

Explanation: Procedures bring about rigidity as they discourage new initiative and thinking and employees may not think for new and better ways of doing things.

Q.54. Example of single use plan is

a. programmes.

b. rules.

c. procedure.

d. budget.

Answer:

(d)

Explanation: Budget is single use plan because one budget cannot used repeatedly or every year.

Q.55. Plans that are basis to the very existence of and organisation are called

a. rules.

b. objectives.

c. policies.

d. strategies.

Answer:

(b)

Explanation: Objectives are the basis to the very existence of an organisation they give direction to efforts of the personnel of the organisation.

Q.56. Procedures are influenced by

a. programmes.

b. objectives.

c. rules.

d. policies.

Answer:

(d)

Explanation: Procedures are influenced by policies. Policies provide guidelines that have to be kept in mind while following procedures.

Q.57. A budget is generally prepared for

a. one month.

b. six months.

c. five years.

d. one year.

Answer:

(d)

Explanation: A budget is generally prepared for one year.

Q.58. Overall organisational goals and objectives are formulated by

a. employees of the organisation.

b. top management.

c. first line management.

d. middle line management.

Answer:

(b)

Explanation: Top management formulates overall organisational goals and objectives. Top management takes the decisions regarding the whole organisation.

Q.59. ABC Limited has a policy of giving preference to relatives of employees while recruiting new staff. This is an example of

a. imposed policy.

b. implied policy.

c. appealed policy.

d. originated policy.

Answer:

(c)

Explanation: This is an example of appealed policy because this type of policy is formulated on the appeal or request of subordinates.

Q.60. Planning premises is one of the steps of planning process. Planning premises means

a. business premises in which planning work is done.

b. environment or boundaries within which plans will be executed.

c. production floor where the work will be carried out.

d. procedure of shifting the premises of the organisation to another location.

Answer:

(b)

Explanation: The limitations in which planning is to be done is called planning premises. If an organisation plans to produce goods, then it will have to analyse different options of producing it. It will not consider the options of purchasing it readymade. So purchasing goods readymade in this case is not a part of planning premises.

Q.61. A plan that states expected results of a given future period in numerical terms is a/an

a. policy.

b. procedure.

c. budget.

d. method.

Answer:

(c)

Explanation: A budget is a numerical expression of the desired performance in near future. Budgets provide basis for controlling by giving standards.

Q.62. The process of planning begins with the setting up of

a. budgets.

b. programmes.

c. procedures.

d. objectives.

Answer:

(d)

Explanation: Objectives are the first steps in the process of planning because they provide a rough idea of the direction in which an organisation wants to move. It is important to know the basic or main plans before making subsidiary or derivative plans.

Q.63. Master budget means

a. production budget.

b. cash budget.

c. combination of all functional budget.

d. material budget.

Answer:

(c)

Explanation: Master budget is the summary budget incorporating all functional budgets sales budget, cash budget, production budget etc.

Q.64. Top management mainly formulates

a. objectives and policies.

b. methods and procedures.

c. rule and guidelines.

d. rules and methods.

Answer:

(a)

Explanation: Top management is mainly concerned with the formulation of organisational objectives and polices, which are concerned with the organisation as a whole.

Q.65. A series of steps arranged in some predetermined best order is called a/an

a. objective.

b. policy.

c. procedure.

d. strategy.

Answer:

(c)

Explanation: A series of steps arranged in some predetermined best order is called a procedure. Procedures define in advance the course of action to be followed and thus reducing unnecessary actions and delay in the production of goods and services.

Q.66. Departmental goals are formulated by

a. middle management.

b. supervisory management.

c. first line management.

d. supplies of the organisation.

Answer:

(a)

Explanation: Departmental goals are formulated by departmental heads which are a part of middle level management.

Q.67. A budget is an instrument of both

a. directing and staffing.

b. planning and control.

c. planning and organising.

d. directing and control.

Answer:

(b)

Explanation: A budget is a part of planning because it provides standards of performance before the actual work. It is an instrument of controlling because it provides standards with which actual performance is to be compared.

Q.68. Planning aims at deciding a course of action that leads to the goals with optimum utilisation of given resources. Thus planning includes

a. defining organisational hierarchy.

b. comparing performances.

c. evaluation of alternatives.

d. recruiting people.

Answer:

(c)

Explanation: Planning means deciding in advance what plan of action to be followed. To decide the desired plan of action, alternatives need to be evaluated.

Q.69. Strategies are single use plans. These are made to

a. coordinate different departments of the organisation.

b. cope with the external environment.

c. design functional budgets.

d. define the purchase procedure.

Answer:

(b)

Explanation: Strategies are formulated to successfully cope with the ever-changing external environment and the policies of the competitors.

Q.70. Policies are directed towards

a. budgets.

b. rules.

c. objectives.

d. methods.

Answer:

(c)

Explanation: Policies are derivative plans to achieve the main or basic plan. Main plans or directions are provided by objectives.

Q.71. The process of management has some predetermined functions. The first function of management is

a. organising.

b. staffing.

c. planning.

d. controlling.

Answer:

(c)

Explanation: Planning is the first function of management. Planning provides the action plan that is to be followed. Planning is the primary function before any action to be taken.

Q.72. Evaluation of alternative courses of action is a part of

a. staffing process.

b. organising process.

c. controlling process.

d. planning process.

Answer:

(d)

Explanation: In planning we decide a course of action that provides most efficient way of achieving the goals. For deciding the most profitable way, alternatives are evaluated.

Q.73. Planning is the primary activity in the process of management. However this is not free from limitations. One of the limitations of planning is that

a. it gives false sense of security.

b. it facilitates control.

c. it facilitates organising.

d. it reduces risk.

Answer:

(a)

Explanation: After planning, an organisation may feel sure that it will achieve desired goals and it may not actually concentrate on following the procedures towards it effectively.

Q.74. Giving preference to local people while recruiting is a/an

a. procedure.

b. budget.

c. rule.

d. policy.

Answer:

(d)

Explanation: Giving preference to local people while recruiting is a policy. This is a guideline that is to be kept in mind while following the procedures of selection.

Q.75. Procedures are designed to execute

a. policies.

b. objectives.

c. programmes.

d. strategies.

Answer:

(a)

Explanation: Policies provide the guiding principles while implementing a plan and procedures provide the way of doing things. The guiding principle has to be followed while execution.

Q.76. Originated, imposed and appealed are the types of

a. procedures.

b. programmes.

c. policies.

d. budgets.

Answer:

(c)

Explanation: Originated, imposed and appealed are different types of policies that provide guidelines to be kept in mind while following the procedures.

Q.78. Planning means deciding in advance a course of action to achieve goals of the organisation. Thus planning includes

a. setting performance standards.

b. hiring people.

c. taking corrective actions.

d. matching actual performance with standards.

Answer:

(a)

Explanation: Planning involves deciding a course of action to be followed after evaluating alternatives. This plan of action provides standards that are to be followed while execution.

Q.79. Sales budget is a

a. master budget.

b. functional budget.

c. part of procedure.

d. part of methods and rules.

Answer:

(b)

Explanation: Sales is one of the main functions of an organisation that is why it is called a functional budget.

Q.80. Principle of limiting factor means

a. analysing each and every alternative course of action.

b. limited use of factors of production.

c. planning the use of factors of production.

d. analysing those alternatives that are relevant and directly related to the objectives in hand.

Answer:

(d)

Explanation: Limiting factor is the most influential factor while planning. If an activity is to be performed within a week, the alternatives that help in competing the activity in more than one week have to be ignored however efficient they may be. Planning has to revolve around the limiting factor.

Q.81. Evaluation of alternatives is done before

a. follow-up.

b. identifying alternatives.

c. setting objectives.

d. establishing planning premises.

Answer:

(a)

Explanation: Evaluation of alternatives is a step in the planning process, which is done before taking follow-up. First we establish planning premises, them we identify alternatives, then evaluate alternatives and then we follow-up whether the activities planned are running as planned so that obstacles can be removed.

Q.82. One of the external limitations of planning is that

a. it facilitates decision-making.

b. it looks into future.

c. it is a pervasive function.

d. it is affected by economic policies of the government.

Answer:

d
Explanation: If an organisation wants to export sugar, and subsequently government bans sugar exports, then the planning regarding sugar export may go waste.

Q.83. One of the internal limitations of planning is that

a. it facilitates decision-making.

b. it provides rigidity to the execution of plans.

c. it is a pervasive function.

d. it is affected by economic policies of government.

Answer:

(b)

Explanation: Planning provides a course of action to be followed while execution. The employees may follow this procedure as it is even if they can suggest a better way of doing it.

Q.84. All the activities of an organisation are directed towards the

a. policies.

b. rules.

c. objectives.

d. budgets.

Answer:

(c)

Explanation: Objectives are the main plans that provide the basis for the formulation of policies, procedures, programmes, rules and budgets. These derivative plans should be in sync with the main objectives.

Q.85. One of the drawbacks of planning is that

a. it improves performance.

b. it is affected by technological changes.

c. it facilitates decision-making.

d. it is forward looking.

Answer:

(b)

Explanation: Technological change is an external factor that can affect the existing planning. If an organisation wants to produce music cassettes and due to technical advancement customers start to prefer compact discs in place of music cassettes, then planning to produce music cassettes may go waste.

Q.86. Procedures are designed to achieve

a. policies.

b. objectives.

c. budgets.

d. programmes.

Answer:

(b)

Explanation: Objectives are the main plans and programmes are derivative plans. Derivative plans are formulated to achieve main or basic plan.

Q.87. The function of management that provides the base for other functions of management is

a. staffing.

b. controlling.

c. planning.

d. organising.

Answer:

(c)

Explanation: Planning provides direction to the organisation. It defines a course of action. It is primary function of management because any action can be taken only after knowing the direction where we want to go.

Q.88. The basic budget on which all other budgets are based is

a. material budget.

b. purchase budget.

c. production budget.

d. sales budget.

Answer:

(d)

Explanation: All the activities are related to increasing the sales of the organisation and thus increasing the profits. That is why sales budget is the basis of all the budgets. One an organisation know what amount it is to sell, it will be easier to know what amount to purchase and how much to produce.

Q.89. Step of planning in which predictions are made regarding future is called

a. evaluation of alternatives.

b. setting objectives.

c. setting up planning premises.

d. follow-up.

Answer:

(c)

Explanation: Planning premises means the limitations within which planning is to be done. This includes predicting future.

Q.90. A school plans to give admission to only those students, who have scored more that 50% marks. This is an example of

a. policy.

b. strategy.

c. rule.

d. budget.

Answer:

(a)

Explanation: This is a policy because it has to be kept in mind while following the procedures of admissions of students. Policies provide guidelines that have to be kept in mind while executing the procedures.

Q.91. One of the drawbacks of planning is that

a. it reduces risk.

b. it provides basis for control.

c. it is a costly process.

d. it helps in formulating goals.

Answer:

(c)

Explanation: Planning involves identifying and evaluating alternatives which requires skills and analytical skills. It also requires considerable time if there are too many alternatives to evaluate.

Q.92. Combination of different functional budgets is called

a. sales budget.

b. production budget.

c. master budget.

d. material budget.

Answer:

(c)

Explanation: Master budget is the sum total of all functional budgets.

Q.93. Systematic ways of handling routine events are called

a. policies.

b. objectives.

c. procedures.

d. strategies.

Answer:

(c)

Explanation: Procedures are formed to deal with routine activities to avoid unnecessary actions.

Q.94. The hierarchy of objectives is also called

a. goal method chain.

b. budget policy chain.

c. end means chain.

d. objective strategy chain.

Answer:

(c)

Explanation: The hierarchy of objectives is also called end means chain because it provides information regarding the end objectives to be achieved and the means or course of action to be followed to achieve them.

Q.95. Whether to introduce a new product or not, how to introduce a product and finding markets for the product are examples of

a. goals.

b. strategies.

c. methods.

d. objectives.

Answer:

(b)

Explanation: Strategies are formulated to deal with external environment and the medium and long-term objectives of the organisation. Decisions regarding a new product have to be taken while taking into consideration the external environment and the strategies of competitors.

Q.96. Planning is useful in a case when

a. its cost exceeds its benefits.

b. it is done after organising function.

c. it is formulated by employees.

d. its benefits exceed its cost.

Answer:

(d)

Explanation: Planning involves time and skills to decide the course of action. If the cost of planning is more than its benefit, it is useless to plan like any other activity.

Q.97. The characteristics of an ideal plan are

a. lengthy, simple and complicated.

b. simple, specific and flexible.

c. specific, flexible but lengthy.

d. lengthy, complicated and flexible.

Answer:

(b)

Explanation: A plan should be easy to understand, to the point without recommending unnecessary activities. It should also have room for flexibility so that it can be adjusted with changing future conditions.

Q.98. Quality improvement or increase in production is an example of

a. objectives.

b. strategy.

c. goals.

d. policies.

Answer:

(c)

Explanation: Goals are the directions where an organisation wants to strive. Goals do not quantify the direction. Increasing sales is a goal and increasing sales by 20% is an objective. Goals give rough idea about the desired direction.

Q.99. Intangible planning premises includes

a. time availability.

b. capital investment.

c. units of production.

d. employees morale and goodwill.

Answer:

(d)

Explanation: Intangible planning premises are those factors which can affect planning process and which cannot be seen or touched or measured. Employees moral cannot be quantified and goodwill can be quantified only when business is being sold.

Q.100. A financial or quantitative statement, prepared and approved prior to a defined period of time, of the policy to be pursued during that period is called

a. policy.

b. objective.

c. budget.

d. method.

Answer:

(c)

Explanation: Budget provides the information regarding desired performance in measurable figures and provides the basis on which actual performance is to be judged after the completion of the production.

Business Studies - MCQ on Planning

Practice Questions for CUET Business Studies chapter-4-Planning SET-3

Q.11 Changes in the government policies and political situations is one of the _­­­­­­­­­­­­­­­­­­­­­________ of Planning.

a. Feature

b. Limitation

c. Importance

d. All of the above

Answer: b. Limitation

Explanation- Changes in the government policies and political situations – changes in the government, its ideology and its fiscal, industrial, monetary and economics policy may create hurdle in the planning process. So, it is the external limitation of the planning.

Q.12 Which of the following function is there with Planning process?

a. Co-ordination

b. Co-operation

c. Both (a) and (b)

d. None of the above

Answer:

(a) Co-ordination

Explanation- Effective Co- ordination:- Planning determines the activities of different individuals, groups and departments in such a way, that maximum co-ordination between physical and human resources may emerge.

Q.13 Policies are____oriented.

a. Goal

b. Profit

c. Goodwill

d. Objective

Answer:

(d) Objective

Explanation- Policies are objective oriented- Policies are framed to achieve the predetermined objectives of the business as such they should be supplementary and complementary to objectives.

Q.14 Objectives are determined by which level of management ?

a. Middle level management

b. Top level management

c. Lower level management

d. None of the above

Answer:

(b) Top-level management

Explanation- Objectives are determined by owners or top level management.

Q.15 Estimate of future needs arranged according to an orderly basis covering the activities of the enterprise for a definite period of time is known as:

a. Policies

b. Budget

c. Rules

d. Methods

Answer: (b)Budget

Explanation- Estimate of future needs arranged according to an orderly basis covering the activities of the enterprise for a definite period of time is known as budget.

Q.16 Which of the following function’s nature is regarded as logical and rational?

a. Methods

b. Policies

c. Procedures

d. Goal

Answer:

(a) Methods

Explanation- Methods by nature regarded as logical and rational.

Q.17 Series of related tasks that make up the chronological sequence and establish ways of performing the work to be accomplished are known as :

a. Methods

b. Policies

c. Procedures

d. Goal

Answer:

(c) Procedures

Explanation- Series of related tasks that make up the chronological sequence and establish ways of performing the work to be accomplished are known as procedures.

Q.18 Simplicity is one of the ____ of Good Plan :

a. Feature

b. Importance

c. Impact

d. Quality

Answer:

(d) Quality

Explanation- Plans must be simple to be understood and worked upon by different individuals and groups.

Q.19 Procedures are determined by which level of management ?

a. Middle level management

b. Top level management

c. Lower level management

d. None of the above

Answer:

(a) Middle level management

Explanation- Procedures are decided by medium and low level executives.

Q.20 Which one of the following is the characteristic of Programmes ?

a. Efficient distribution of work

b. Concrete plans

c. Better use of time

d. Coordination of work

Answer:

(b) Concrete plans

Explanation- Concrete plans- Programmes are plans to accomplish given work. It deals with the systematic detailed development of the work.

Q.21 Rules do not have any-

a. Procedure

b. Policy

c. Rule

d. Method

Answer:

(a) Procedure

Explanation- Rules do not have any procedure rather Procedures may have their rules.

Q.22 Valuation of stock by LIFO and FIFO methods comes under:

a. Rules

b. Budget

c. Goal

d. Methods

Answer:

(d) Methods

Explanation- Formalised and standardized way of doing routine jobs are known as methods. These are standard ways of doing work. It increases efficiency. There is no penalty for violation of methods. So, Valuation of stock by LIFO and FIFO methods comes under Methods.

Q.23 Which of the following function’s nature is regarded official and authoritative ?

a. Methods

b. Rules

c. Procedures

d. Goal

Answer:

(b) Rules

Explanation- Rules are regarded as official and authoritative by nature.

Q.24 Changes in the government policies and political situations is one of the External Limitation of:

a. Planning

b. Organising

c. Directing

d. Controlling

Answer:

(a) Planning

Explanation- Changes in the government, its ideology and its fiscal, industrial, monetary and economic policy may create hurdle in the planning process.

Q.25 Goals established to guide the efforts of the company and each of its components are known as –

a. Policies

b. Budget

c. Objectives

d. None of the above

Answer:

(c) Objectives

Explanation- Goals established to guide the efforts of the company and each of its components are known as Objectives.

Q.26 Series of related tasks is known as –

a. Procedures

b. Objectives

c. Rules

d. Methods

Answer:

(a) Procedures

Explanation- Series of related tasks that make up the chronological sequence and establish ways of performing the work to be accomplished are known as Procedures.

Q.27 Collecting and analysing information is one of the process of –

a. Controlling

b. Directing

c. Staffing

d. Planning

Answer:

(d) Planning

Explanation- Collecting and analysing information- Certain facts and information regarding the anticipated problems, requirements or opportunity are to be collected and properly analysed. This analysis of the facts will prepare sound basis in the formation of plans.

Q.28 Budgeting implementation of plans requires –

a. Goodwill

b. Patent rights

c. Finance

d. None of the above

Answer:

(c) Finance

Explanation- Budgeting implementation of plans requires finance- It is necessary that budgets for master plan and different derivative plans to be prepared. Plans for the arrangement of requisite funds should also be made. Budgeting keeps a check on extravagance and unnecessary expenses. It is a strategy of making planned expenditure.