Chapter-8-Controlling 

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Business Studies
  • Chapter
    Chapter-8-Controlling 
  • Chapter Name
    Chapter 8 Controlling
  • Category
    CUET (Common University Entrance Test) UG

MCQ-Based Questions for CUET Business Studies Chapter-8-Controlling 

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Practice Questions for CUET Business Studies chapter-8-Controlling SET-1

Business Studies - MCQ on Controlling

Class XII

Q.1. The function of management that comes after directing function is called

a. planning.

b. organising.

c. staffing.

d. controlling.

Answer:

(d)

Explanation: Controlling is the last function of management. Once the employees are informed about the procedures and methods they have to follow, their performance is checked and corrected, if it is below expectations.

Q.2. Controlling is looking back because

a. it aims to improve future performance.

b. it includes measuring past performance.

c. it involves building organisation structure.

d. it is related to supervising.

Answer:

(b)

Explanation: In controlling, we look back at the actual performance and see whether it has been as was planned before its execution or not.

Q.3. Budgets are numerical expressions of the desired performance. A budget is an instrument of

a. planning and organising.

b. planning and directing.

c. directing and controlling.

d. planning and controlling.

Answer:

(d)

Explanation: Budget is a part of both planning and controlling. It is a part of planning because it expresses the goals in numerical terms. It is a part of controlling because it provides standards for controlling.

Q.4. Debt equity ratio is a part of

a. profitability ratios.

b. solvency ratios.

c. turnover ratios.

d. liquidity ratios.

Answer:

(b)

Explanation: This is type of solvency ratio. It tells whether an organisation is capable of paying its long-term loans in time or not.

Q.5. One of the modern techniques of managerial control is

a. statistical reports.

b. break-even analysis.

c. Return on Investment (ROI).

d. budgetary control.

Answer:

(c)

Explanation: Return on Investment (ROI), also known as Return on capital employed, is a modern technique of managerial control. In this ratio, the relation between capital investment and profit is established. It tells about what ratio of income is being earned on the capital employed.

Formula for ROI = Net income / Total investment

Q.6. The technique of managerial control in which all the information is provided to the management regarding the performance of different departments is called

a. management by exception.

b. critical path method.

c. Management Information System (MIS).

d. programme evaluation and review technique.

Answer:

(c)

Explanation: MIS provides accurate information to all the managers at different levels. This facilitates planning, controlling and decision-making.

Q.7. MBE stands for

a. management basics of economy.

b. Management by Exception(MBE) .

c. market before employees.

d. market base evaluation.

Answer:

(b)

Explanation: MBE stands for Management by Exception that says managers should look after only those deviations, which are beyond a certain limit.

Q.8. One of the features of a good control system is that it is

a. simple.

b. complicated.

c. hires more employees.

d. lengthy.

Answer:

(a)

Explanation: Controlling technique should be simple so that the supervisors can understand it correctly and take prompt decisions in the areas of improvement.

Q.9. Mr Shane is a manager in Wisdom Publishing House. He normally observes his subordinates while they are working and every year prepares a report of their performance. Then, he compares these reports every year and tells his subordinates the ways in which they can improve the quantity and quality of their work next year. The technique of managerial control that Mr. Shane is using here is

a. budgetary control.

b. personal observation.

c. break-even analysis.

d. statistical reports.

Answer:

(b)

Explanation: Mr. Shane is using personal observation as a technique of managerial control. This is a traditional technique of managerial control because this technique is being used for a long time. Please note that all the four techniques mentioned above are the traditional techniques of managerial control.

Q.10. The ratios, which indicate about the long-term solvency of the business, are called

a. liquidity ratios.

b. solvency ratios.

c. turnover ratios.

d. profitability ratios.

Answer:

(b)

Explanation: Solvency ratios tell about the long-term financial position of the enterprise. If a person or bank is approached by the enterprise for long-term loans, the lending person or bank will see the solvency ratios of the enterprise. Thus, the lender gets to know whether the borrowing enterprise will be financially able to survive and grow for a long time or not, so that its money is repaid in time.

Q.11. One of the objectives of budgetary control is

a. to provide the basis of comparison.

b. to change the organisation structure.

c. to affect the theories of motivation.

d. to make the targets unachievable.

Answer:

(a)

Explanation: Budgetary control provides the basic figures of desired performance so that the actual performance confirms to them.

Q.12. The ratios, which indicate the profitability of the enterprise, are called

a. solvency ratios.

b. profitability ratios.

c. liquidity ratios.

d. turnover ratios.

Answer:

(b)

Explanation: Profitability ratios indicate the capacity of a business to earn profits. Gross profit ratio and net profit ratio are some of its examples.

Q.13. One of the features of a good control system is that

a. it should be qualitative.

b. it should be rigid.

c. it should be flexible.

d. it should resist change.

Answer:

(c)

Explanation: A good control system should be able to accommodate the changes taking place in the external environment. If an organisation plans to produce wire phones and later wireless phones come into market, the organisation should reduce its sales targets of wire phones and start producing wireless phones also.

Q.14. Gross profit ratio is a part of

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(b)

Explanation: This ratio tells how much gross profit is being earned on a particular amount of sale. It is a modern technique of managerial control and is called profitability ratio.

Q.15. There is a saying that, “if you try to control everything you may end up controlling nothing”. The principle, which helps in solving this problem, is

a. controlling nothing.

b. ignoring the poor performers.

c. Management by Exception.

d. controlling everything.

Answer:

(c)

Explanation: To avoid controlling nothing while trying to control everything, a manager should use Management by Exception, or Control by Exception. In Management by Exception, a manager controls only those activities or performances, which need urgent attention. If out of ten employees, only two employees are not performing in the desired manner, the manager should deal with those two employees so that their performance is improved. For example, if the minimum quality to be maintained is 90% and out of ten workers two workers are performing at 80% and 65%, the management should concentrate on these two employees rather than concentrating on the employees who are performing in the desired manner.

Q.16. The technique of controlling activities by preparing budgets is called

a. ratio analysis.

b. PERT.

c. CPM.

d. budgetary control.

Answer:

(d)

Explanation: In budgetary control, budgets of desired performance is prepared. Actual performance is then compared with these performances and corrective actions are taken, if necessary.

Q.17. In one of the techniques of managerial control, organisational activities are divided into groups, and each group head is responsible for the achievement of his group targets. This technique is called

a. Return on Investment.

b. management audit.

c. responsibility accounting.

d. PERT or CPM.

Answer:

(c)

Explanation: In responsibility accounting, the common types of responsibility centres are cost centre, revenue centre, profit centre and investment centre. Please also note that all the above techniques are also the modern techniques of managerial control.

Q.18. CPM stands for

a. Crisis Performance Method.

b. Critical Path Method.

c. Creative Performance Method.

d. Critical Performance Method.

Answer:

(b)

Explanation: Critical Path Method is a part of programme evaluation and review technique, which is one of the modern techniques of managerial control.

Q.19. Mr. Lal is a production manager in an automobile company. He devotes a lot of time in correcting the work of each and every subordinate of his that he has no time left to do his own work. He is not able to send his reports to senior managers in time. The principle of management that Mr. Lal should follow is

a. Management by Exception.

b. PERT.

c. principle of equity .

d. principle of Esprit de corps.

Answer:

(a)

Explanation: Mr Lalit should use Management by Exception. This principle says that a manager should concentrate on the subordinates who are performing below the minimum quality standards. For example, if the desired quality level is 90% and 16 out of 20 workers are performing above this level and 4 employees are performing below this level, the manager should devote his attention on improving the quality of the 4 employees who are performing below the level.

Q.20. Quick ratio is a part of

a. solvency ratios.

b. profitability ratios.

c. liquidity ratios.

d. turnover ratios.

Answer:

(c)

Explanation: This is a part of liquidity ratios as it tells about the short-term paying capacity of the organisation.

Q.21. Rajeev, an accounts executive, has made a graph of the trends of sales, profits and costs to make it easily understandable for the managers. The technique of managerial control, Rajeev is involved in, is

a. statistical reports.

b. ratio analysis.

c. PERT.

d. CPM.

Answer:

(a)

Explanation: Analysing the data with the help of ratios and graphs is a part of statistics. This is the reason why this technique is called statistical report. Please note this is a traditional technique of managerial control.

Q.22. Budgets are one of the techniques of control. Budgets provide basis for

a. organising.

b. planning.

c. decision making.

d. controlling.

Answer:

(d)

Explanation: Budgets measure the expected performance in future in numerical terms. They provide the basis against which the actual performance is to be compared and judged.

Q.23. The formula for calculating break-even point is

a. Fixed costs/(Sales price per unit – Variable cost per unit)

b. Sales/Fixed costs

c. Fixed costs/(Sales price – fixed cost)

d. Fixed cost per unit/(Total units sold – Total variable cost)

Answer:

(a)

Explanation: Break-even point= Fixed costs/(Sales price per unit – Variable cost per unit). It is a point where company earns zero profits (no profit no loss situation). The target of the organisation should be placed above this break-even point.

Q.24. Personal observation, statistical reports, breakeven analysis and budgetary control are collectively called

a. functional foremanship.

b. process of planning.

c. traditional managerial control techniques.

d. modern managerial control techniques.

Answer:

(c)

Explanation: These are called traditional techniques of managerial control because these are being used by companies for a long time.

Q.25. Analysing the financial statements with the help of ratios is called

a. PERT.

b. break-even analysis.

c. ratio analysis.

d. statistical reports.

Answer:

(c)

Explanation: In ratio analysis, the relations between different items of financial statements are shown by the way of ratios. Liquidity, solvency, profitability and turnover ratios are the main categories of different ratios.

Q.26. The technique of management under which a manager observes the subordinates while they are performing is called

a. personal observation.

b. PERT.

c. break-even analysis.

d. budgetary control.

Answer:

(a)

Explanation: This is a traditional technique of management in which a manager notes down his observations and compares them with the last year’s observations.

Q.27. One of the modern techniques of managerial control is

a. responsibility accounting.

b. personal observation.

c. break-even analysis.

d. statistical reports.

Answer:

(a)

Explanation: Under responsibility accounting, organisation is categorized into various responsibility centers and the head of each center is responsible for the target achievement of his centre.

Q.28. The function of management in which the actual performance is evaluated and measured with the standards set, and corrective actions are taken, if the performance is not up to the mark is called

a. planning.

b. staffing.

c. directing.

d. controlling.

Answer:

(d)

Explanation: Controlling involves measuring actual performance with the planned targets and taking corrective actions, if necessary.

Q.29. Debt equity ratio is a part of

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(a)

Explanation: Debt equity ratio tells us about the long-term solvency of the enterprise. It shows the ratio between owner’s funds and borrowed funds in the business.

Q.30. A good control system should

a. delay the decision-making.

b. ignore the decision-making.

c. facilitate the timely decision-making.

d. complicate the decision-making.

Answer:

(c)

Explanation: A good control should help the managers to locate the problems quickly so that corrective measures can be taken in time. For example, a manager is required to calculate sales on monthly basis. He starts calculating August sales at the beginning of September but finds at the end of September that the sales of August are not good and some actions needs to be taken for improving them for the next time. In this case, September sales cannot be improved because the controlling procedure took almost a month. If performance is evaluated within a couple of days in the beginning of September, then remedies can be taken for September sales also.

Q.31. The longest sequence in the PERT schedule is called

a. chain of command.

b. critical path.

c. logical path.

d. longest path.

Answer:

(b)

Explanation: Critical path is the longest path in PERT. The duration of project is equal to the duration of critical path.

Q.32. Return on Investment (ROI), Ratio Analysis, Responsibility Accounting, Management Audit, PERT & CPM and Management information system are collectively called

a. functional foremanship.

b. process of planning.

c. traditional managerial control techniques.

d. modern managerial control techniques.

Answer:

(d)

Explanation: These are called modern techniques of managerial control because these techniques provide a new approach on the ways an organisation should be controlled.

Q.33. Mr Naveen is an employee in a limited company. The last month he performed well. However, there is no benchmark against which he can compare his performance and evaluate it. The activity, which has not been followed in Naveen’s organisation, is

a. controlling.

b. directing.

c. organising.

d. planning.

Answer:

(a)

Explanation: Standard performance is defined in the controlling function. This is the first step in the process of controlling. In the absence of standards, the employees are not able to judge whether they are performing up to the mark or not and whether they need to improve.

Q.34. If the actual performance is less than the planned one, it means that

a. the resources have been used efficiently.

b. the workers have performed above expectations.

c. the actual performance needs to be improved.

d. the planned performance needs to be increased.

Answer:

(c)

Explanation: Actual performance needs to be improved so that it conforms to the standards next time.

Q.35. Deviation of performance means

a. the performance is below average.

b. the performance is average.

c. the difference between actual and standard performance.

d. the increase in actual performance from last year.

Answer:

(c)

Explanation: Deviation means the amount by which an activity or performance differs from its standard. Deviations tell the management about the difference of actual performance from what was planned.

Q.36. Controlling is the last function of management process. Controlling helps in

a. decreasing costs.

b. increasing costs.

c. increasing working hours of the enterprise.

d. increasing the risk in future production.

Answer:

(a)

Explanation: The purpose of every management activity is to minimise the cost of production. Minimisation of cost leads to increased production.

Q.37. Controlling means setting standards, measuring actual performance and comparing it with standards and taking corrective actions. Controlling helps in

a. demotivating employees.

b. decreasing targets.

c. motivating employees.

d. recruiting employees.

Answer:

(c)

Explanation: Controlling gives targets to the employees. Achieving the targets is an automatic motivation to the employees. Once the employees know that they have performed in the desired manner or better than that, they are encouraged to do better next time.

Q.38. Controlling is the last function of management. It helps in

a. improving plans.

b. reducing profits.

c. increasing costs.

d. avoiding budgets.

Answer:

(a)

Explanation: Controlling helps in locating the deficiencies in planning and in revising standards, if they are not formed properly or need updation. In this way, better plans are formed next time.

Q.39. Systematic and comprehensive evaluation of the performance of the management is called

a. PERT.

b. CPM.

c. MIS.

d. management audit.

Answer:

(d)

Explanation: Management audit involves appraisal of overall performance of the management by reviewing its efficiency and effectiveness.

Q.40. One of the techniques of controlling is

a. functional foremanship.

b. budgetary control.

c. evaluating alternatives.

d. standard task setting.

Answer:

(b)

Explanation: Budgetary control is one of the traditional techniques of controlling. In this technique, budgets are prepared before the actual performance and the results are compared with budgetary standards.

Q.41. Current ratio is a part of

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(c)

Explanation: This is a part of liquidity ratios as it tells about the short-term paying capacity of the organisation.

Q.42. The ratios, which indicate the efficient utilisation of resources, are called

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(d)

Explanation: Turnover ratios indicate how efficiently the resources are being used.

Q.43. Performance appraisal of employees is not possible without

a. planning.

b. organising.

c. directing.

d. controlling.

Answer:

(d)

Explanation: Performance appraisal means giving rewards or suggestions for the actual performance. Actual performance is measured in the controlling function of management. In this way, controlling provides the basis for the performance appraisal of employees.

Q.44. Some of the techniques of managerial control are also called network techniques of managerial control. These techniques are

a. ratio analysis.

b. statistical reports.

c. personal observation.

d. PERT and CPM.

Answer:

(d)

Explanation: PERT is a project management technique. It shows the time taken by each component of a project and also the time taken for its completion. PERT breaks the whole projects into different activities and lays down their proper sequence. This is called network technique because it makes a network of activities interrelated to each other. The longest path connecting the events is called critical path. CPM also means that the time taken by critical path is equal to the time taken by the project. PERT is basically a scheduling tool.

Q.45. The function of management that helps to detect the errors and defects in the work done is called

a. planning.

b. staffing.

c. controlling.

d. directing.

Answer:

(c)

Explanation: Controlling helps to detect the errors in actual performance by comparing it with the standard performance.

Q.46. In one of the techniques of managerial control, the information about the past is depicted through charts, graphs, tables etc. This technique is called

a. ratio analysis.

b. statistical reports.

c. personal observation.

d. PERT and CPM.

Answer:

(b)

Explanation: In statistical reports, the information about the last year’s profit and cost are shown by way of graphs and charts so that they are easy to understand and analyse. This is one of the traditional techniques of managerial control.

Q.47. The last step in the process of controlling is

a. comparing performances.

b. setting standards.

c. finding deviations.

d. taking corrective actions.

Answer:

(d)

Explanation: In controlling, the performance is measured and compared with the standards set. The objective of this activity is to improve the future performance. Performances can be improved when corrective measures are taken after locating the deviations in the actual performance with the standards. Thus, corrective measures are the last step in the process of controlling.

Q.48. Stock turnover ratio is a part of

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(d)

Explanation: Stock turnover ratio indicates how efficiently and quickly the raw material is being converted into finished goods.

Q.49. Proprietary ratio is a type of

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(a)

Explanation: Proprietary ratio is the relation between shareholders funds and the total assets of the enterprise. It reflects the amount of shareholders fund invested in one rupee of fixed asset.

Q.50. The function of management, which locates the errors in planning and the defects in its implementation, is called

a. planning.

b. organising.

c. staffing.

d. controlling.

Answer:

(d)

Explanation: Controlling function is related to measuring actual performance and comparing it with the standards set. After comparing, the deviations and the defects are located.

Q.51. In a supermarket, Mr. Sanjeev is working as a manager in garments section. He has fixed the targets of each of his salesmen to be Rs 10,000 per day. Now, at the end of the month, he is comparing the actual sales done by the executive. The activity of management process in which Mr. Sanjeev is indulged in is

a. planning.

b. organising.

c. controlling.

d. directing.

Answer:

(c)

Explanation: Mr Sanjeev is doing the controlling part of management process. In controlling, standards are set, actual performance is measured and compared with standards, and corrective actions taken, if the actual performance is less than the standard performance.

Q.52. ROI stands for

a. Rate of Income.

b. Rewards on Increments.

c. Return on Investments.

d. Rewards on Investments.

Answer:

(c)

Explanation: This is a modern technique of managerial control. This ratio shows how much income is earned as a percentage of total investments. It also tells about the deviations in achievements from the standard rate of returns.

Q.53. One of the advantages of controlling is that

a. it helps in increasing costs.

b. it helps to reduce profits.

c. it increases employees’ performance.

d. it ignores deviations.

Answer:

(c)

Explanation: Controlling provides the standards against which the actual performance of employees is judged. This motivates the employees to perform better. If employees perform better, they get recognitions and rewards, which satisfies their social needs. In this way, controlling improves the morale of the employees and they work with more dedication and enthusiasm.

Q.54. Negative or unfavourable deviation of performance means

a. actual performance is less than standards set.

b. actual performance is more than standards set.

c. actual performance equals standards set.

d. there are no standards set.

Answer:

(a)

Explanation: If actual performance is less that what we had planned, it is an unfavourable situation. To overcome this situation, we need to concentrate on how to increase the actual performance so that the targets are achieved next time within time and cost limits.

Q.55. Comparing actual performance with standards is a part of

a. planning function.

b. organising function.

c. directing function.

d. controlling function.

Answer:

(d)

Explanation: Controlling is a function of management in which actual performance is measured and checked to know if it deviates with standards set.

Q.56. If the actual performance is better than the planned performance

a. the reason for poor performance should be located.

b. the employees should be rewarded and motivated.

c. the targets should be reduced.

d. the actual performance should be cut short.

Answer:

(b)

Explanation: The employees should be rewarded for their commendable performance. They should be motivated through financial or non-financial incentives so that they beat their previous performance records next time.

Q.57. One of the traditional techniques of managerial control is

a. statistical reports.

b. PERT.

c. management audit.

d. ROI.

Answer:

(a)

Explanation: Statistical reports are one of the traditional techniques of managerial control in which graphical presentation, correlation, average and percentage are calculated after analysing the past and present performance of employees.

Q.58. The traditional technique of managerial control in which cost and profit relationship is studied and a point of no profit no loss is calculated when sales reach that point is called

a. ROI.

b. break-even analysis.

c. PERT.

d. MIS.

Answer:

(b)

Explanation: In break-even analysis, the point of no profit no loss is calculated. The targets are framed to surpass that point so that profit is earned.

The formula for calculating Break-even point = Fixed costs / (Sales price per unit – Variable cost per unit)

Q.59. One of the traditional techniques of managerial control is

a. break-even analysis.

b. Return of Investment (ROI).

c. Ratio Analysis.

d. Management Information System (MIS).

Answer:

(a)

Explanation: Break-even is a traditional technique of managerial control because it has been used for a long time.

In this technique, break-even point is calculated that is a point where there is neither profit nor loss. Performance is designed in such a way that sales targets are above the break-even point.

Q.60. MIS stands for

a. Management Incentive Scheme.

b. Management Information System.

c. Managerial Investment Scheme.

d. Master Investment Scheme.

Answer:

(b)

Explanation: MIS stands for Management Information System.

Q.61. Controlling is forward looking because

a. it aims to improve future performance.

b. it includes measuring past performance.

c. it involves building organisation structure.

d. it is related to supervising.

Answer:

(a)

Explanation: Controlling helps to measure past performances. They are measured and compared with the actual performance so that the past errors can be found. Also, it can be ensured that the same mistakes do not occur again, so that next time we can do the work with minimum mistakes and maximum quality.

Q.62. Mr Sudhanshu is a manager in Angel Automobiles Limited. He observed that his subordinates manufactured and assembled 200 cars in the month of January as against the target of 250 cars set by the higher management. Now, Mr Sudhanshu is suggesting his subordinates about different ways of increasing their production. So, Mr Sudhanshu is involved in the activity of

a. planning.

b. controlling.

c. directing.

d. organising.

Answer:

(b)

Explanation: Mr Sudhanshu is implementing the controlling part of the management process. Controlling involves comparing actual performance with standards, checking deviations and taking measures to correct these deviations so that the performance conforms to the desired one in future.

Q.63. Establishing standards of performance is a part of controlling process. The standards set should be

a. unrealistic.

b. vague.

c. measurable.

d. qualitative.

Answer:

(c)

Explanation: Performance should be defined in quantitative terms so that comparison becomes easy otherwise there is no use of making them if the actual performance cannot be compared with them.

Q.64. The function of management that helps to improve the existing plans is

a. directing.

b. controlling.

c. organising.

d. planning.

Answer:

(b)

Explanation: Controlling function helps in comparing the actual performance with the standards set. If the actual performance is better than the planned, then the standards have to be improved for next time. If the standards cannot be achieved, plans need to be adjusted accordingly.

Q.65. Positive or favourable deviation of performance means

a. actual performance is less than standard.

b. actual performance is more than standard.

c. actual performance equals standards.

d. there are no standards set.

Answer:

(b)

Explanation: This means the actual performance is more than standard performance. This is a favourable situation because what we have done here is better than what we had earlier planned.

Q.66. Debtor turnover ratio is a part of

a. solvency ratios.

b. profitability ratio.

c. liquidity ratios.

d. turnover ratios.

Answer:

(d)

Explanation: Debtor turnover ratio indicates how quickly debtors are being converted into cash.

Q.67. Standards of performance means

a. the actual performance.

b. the desired performance.

c. the negative deviations from performance.

d. the positive deviations from performance

Answer:

(b)

Explanation: Standards of performance mean the performance that is expected to be performed.

Q.68. Mr Mittal is the owner of a refinery company. He has classified the activities of his organisation into different departments and appointed the managers for each department. These managers are responsible for their departmental targets. The technique of managerial control that Mr. Mittal has used here is

a. Break-even Analysis.

b. personal observation.

c. Ratio Analysis.

d. responsibility accounting.

Answer:

(d)

Explanation: In responsibility accounting, activities are normally classified into cost activities, revenue activities and profit activities. Responsibility accounting is a modern technique of managerial control because this technique has evolved in recent years.

Q.69. Mr Raman is a manager in a supermarket. He has set a sales target of Rs 20,000 for every salesman. Now, at the end of the month, Mr Raman is busy in measuring the actual performances of the salesmen. The activity of management in which Raman is busy is

a. planning.

b. organising.

c. staffing.

d. controlling.

Answer:

(d)

Explanation: Mr Raman is busy in the controlling part of management process. In controlling, first the actual performance is measured and then it is compared with budgeted performances.

Q.70. Sometimes the actual performance is increased if it is below the standards set but sometimes standards set also need revision. Standards need revision when

a. standards are realistic.

b. actual performance is sub standard.

c. standards are unrealistic and unachievable.

d. deviations can be corrected.

Answer:

(c)

Explanation: Unachievable standards demotivate the employees because employees may think the employers are trying to exploit them by setting unachievable targets. The targets should be reduced in this case to make them achievable. If a worker makes 1 unit of a product in one hour and management sets a target of 20 units a day, this may demotivate the employee as this target will never be achieved in 8 hours of his job.

Q.71. PERT is a technique of managerial control. PERT stands for

a. Performance Evaluation and Review Technique.

b. People’s Earning and Reward Technique.

c. Programme Evaluation and Review Technique.

d. People’s Evaluation and Recognition Technique.

Answer:

(c)

Explanation: PERT stands for Programme Evaluation and Review Technique. It is a modern technique of managerial control.

Q.72. Mr Vineet is a floor manager in the watch section of a supermarket. There are five salesmen who report to him. The middle management has fixed their sales targets at Rs 1,00,000 per month. However, Mr Vineet does not check whether the actual sales by the salesmen are better or less that the target fixed. So, the salesmen do not know whether they are performing well or need improvement. The function of management that Mr Vineet is ignoring is

a. organising.

b. planning.

c. staffing.

d. controlling.

Answer:

(d)

Explanation: Mr Vineet is not properly implementing the function of controlling. In controlling, the actual performance is measured first and then it is tallied with the standards to see whether the salesmen need some advice and suggestions for improvement.

Q.73. The ratios, which tell us about the short-term solvency of the organisation, are called

a. solvency ratios.

b. liquidity ratios.

c. profitability ratios.

d. turnover ratios.

Answer:

(b)

Explanation: Liquidity ratios are also called short-term solvency ratios. This ratio tells about the ability of a business to meet its short-term obligations.

Q.74. Mr Pawan is the incharge of a programme, which aims to build a school. He has fixed 10 days for assembling the different items needed for construction, 90 days for constructing the building and 25 days for furnishing and whitewashing. In this way, Mr. Pawan has scheduled every activity of construction before its execution. The technique of managerial control that Mr. Pawan has used here is

a. statistical reports.

b. Ratio Analysis.

c. PERT and CPM.

d. Break-even Analysis.

Answer:

(c)

Explanation: In Programme Evaluation and Review Technique, we allocate time for every activity of a project. This analysis provides a basis of control. If the workers assemble materials in 15 days as against the target of 10 days, Mr. Pawan should spend time to locate the reasons of delay in first activity and put more efforts on meeting the deadline for the next activity. CPM is the longest chain of actions in PERT. CPM also means that the time taken by critical path is equal to the time taken by the whole project. PERT is basically a scheduling tool.

Q.75. The last function in the process of management is

a. planning.

b. organising.

c. directing.

d. controlling.

Answer:

(d)

Explanation: Once the employees have performed and worked as per the plans, their performance is measured with the standards set. If the performance is less than expected, remedies are taken so that targets can be achieved next time.

Business Studies - MCQ on Controlling

Practice Questions for CUET Business Studies chapter-8-Controlling SET-2

Q.1 Controlling ensures that an organisation’s resources are being used effectively and efficiently for the achievement of __________?

a. Predetermined goals.

b. Profits.

c. Market share.

d. None of the above.

Answer: (a)

 

Expln. Controlling is, thus, a goal-oriented function.

Q.2 What are the functions of controlling?

a. It finds out how far actual performance deviates from standards.

b. Analyses the causes of such deviations.

c. Attempts to take corrective actions.

d. All of the above.

Answer: (d)

 

Expln. Controlling also helps in the formulation of future plans.

Q.3 What are the objectives of controlling?

a. Determining the progress of work.

b. Detecting deviations from planned standards.

c. Investigating the causes of deviations.

d. All of the above.

Answer:

(d)

Expln. Controlling also tries to keep the loss due to faulty production within the minimum possible limit.

Q.4 What are the limitations of controlling?

a. External factors such as government policy, technological changes adversely effects controlling.

b. Resistance by subordinates.

c. Expensive process.

d. All of the above.

Answer:

(d)

Q.5 What is the relationship between planning and controlling?

a. They are inter-dependent and inter-related activities.

b. Planning is a major function while controlling is a small part of it.

c. Both 1 and 2.

d. None of the above.

Answer:

(a)

Expln. Without planning, there is no basis for controlling activities and vice versa.

Q.6 The control process consists of which of the following steps?

a. Establishment of standards.

b. Measurement of performance.

c. Taking corrective actions.

d. All of the above.

Answer:

(d)

Expln. Comparison of actual performance with standards is also a part of the control process.

Q.7 To be effective, the control should be ___________.

a. Backward looking.

b. Forward looking.

c. Both 1 and 2

d. None of the above.

Answer:

(b)

Q.8 What are the things upon which controlling should focus?

a. Checking current performance.

b. Providing early information to achieve results in conformity with standards.

c. Both 1 and 2.

d. None of the above.

Answer:

(c)

Q.9 Which of the following should controlling ensure?

a. Timely detection of deviations

b. Prevention of their repetition in future.

c. Both 1 and 2.

d. None of the above.

Answer:

(c)

Q.10 The purpose of control is not only to detect errors and defects in performance of work but also to ______________.

a. Adopt remedial measures.

b. Adopt traditional techniques.

c. Both 1 and 2.

d. None of the above.

Answer:

(a)

Expln. Without taking corrective actions, controlling has no meaning.

Q.11 A corrective action may involve a change in which of the following?

a. Change in methods, machinery, rules or procedures.

b. Improving physical conditions of work or changing the nature of supervision.

c. Both 1 and 2.

d. None of the above.

Answer:

(c)

Expln. Where the deviations cannot be rectified through managerial action, the standards may have to be revised.

Q.12 It is through control, that managers ensure the ____________.

a. Execution of plans and achievement of goals.

b. Dividend rate for the next year.

c. Equity availability in the market.

d. All of the above.

Answer:

(a)

Expln. Controlling simplifies the task of a supervisor by comparing the actual performance with the standards.

Q.13 An effective quality control system will ultimately result in quality products, thereby ___________.

a. Decreasing sales and profits.

b. Increasing sales and profits.

c. Reduced goodwill in the market.

d. Reduction in shareholders.

Answer:

(a)

Q.14 Controlling helps in improving ___________.

a. Employer’s performance.

b. Employee’s performance.

c. Shareholder’s performance.

d. All of the above.

Answer:

(b)

Q.15 What does the plans of an organisation indicate?

a. The expected behaviour and activities of people working in different units.

b. The expected behaviour and activities of people working in same units.

c. Both 1 and 2.

d. None of the above.

Answer:

(a)

Q.16 The various techniques of managerial control may be classified as:

a. Traditional techniques.

b. Modern techniques.

c. Subsistence techniques.

d. Both 1 and 2.

Answer:

(d)

Q.17 Which of the following does traditional technique include?

a. Personal observation.

b. Statistical reports.

c. Breakeven analysis.

d. All of the above.

Answer:

(d)

Expln. Budgetary control is another important traditional technique.

Q.18 The sales volume at which there is no profit, no loss is known as:

a. Marginal Utility.

b. Breakeven point.

c. Marginal point.

d. None of the above.

Answer:

(b)

Expln. Breakeven point determines the probable profit and losses at different levels of activity.

Q.19 Which of the following is a traditional technique of Managerial control?

a. Personal observation.

b. statistical report.

c. Breakeven Point.

d. All of the above.

Answer:

(d)

Expln. Traditional techniques are those which are used by the companies for a long time.

Q.20 Expand PERT

a. Programme Evaluation and Review Technique.

b. Program Evaluation and Revenue Technique.

c. Person Evaluation of Review Technique.

d. None of the above.

Answer:

(a)

Expln. PERT is a modern technique of Managerial Control.

Q.21 RoI stands for

a. Return on Investment.

b. Revenue of Income.

c. Review of Income.

d. None of the above.

Answer:

(a)

Expln. RoI is used to find whether the capital is used effectively or not.

Q.22 Current Ratio is a

a. Liquidity Ratio.

b. Solvency Ratio.

c. Profitability Ratio.

d. Turnover ratio.

Answer:

(a)

Expln. CurrentRatio and Liquid Ratio are the example of the liquidity ration.

Q.23 Which is not a Turnover ratio

a. Invetory Turnover Ratio.

b. Stock Turnover Ratio.

c. Debtor Turnover Ratio.

d. Current ratio.

Answer:

(d)

Expln. CurrentRatio is an example of the liquidity ration.

Q.24 __________ratio are used to determine the efficiency of operation based on effective utilization of the resources.

a. Liquidity Ratio.

b. Solvency Ratio.

c. Profitability Ratio.

d. Turnover ratio.

Answer:

(d)

Expln. Higher turnover means better utilization of resources.

Q.25 CPM stands for

a. Cost and Profit management.

b. Critical Path Method.

c. Central Processing Machine.

d. None of these.

Answer:

(b)

Expln. CPM is a modern technique of Managerial Control.

Q.26 _______ is a segment of an organization for generating revenue.

a. Profit Center.

b. Revenue center.

c. Investment Center.

d. None of these.

Answer:

(b)

Expln. Revenue Center is a segment that is primarly responsible for generating revenue.

Q.27 Ratio analysis refers to

a. Analysis of capital.

b. Analysis of Financial statements.

c. Analysis of Shares.

d. None of these.

Answer:

(b)

Expln. There are three types of Ratios.

Q.28 Statistical analysis is done in the form of

a. Average.

b. Percentage.

c. Rations.

d. All of the above.

Answer:

(d)

Expln. Statistical analysis is done in the form of ratios, percentage, correlation, average etc.