CUET Entrepreneurship-Chapter-Setting Up a Small Scale

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Entrepreneurship
  • Chapter
    CUET Entrepreneurship-Chapter-Setting Up a Small Scale
  • Chapter Name
    Setting Up a Small Scale
  • Category
    CUET (Common University Entrance Test) UG

Important MCQ Questions on CUET Entrepreneurship-Chapter-Setting Up a Small Scale with Detailed explanation

HT having an expert teacher prepared the most important MCQ Questions on CUET Entrepreneurship-Chapter-Setting Up a Small Scale with Detailed explanations. All the concepts of Entrepreneurship in the syllabus of CUET are covered with coverage of the entire syllabus. This page is prepared for Entrepreneurship-Chapter-Setting Up a Small Scale and covers all important topics of the competitive exam CUET for domain subject test. Check out MCQ Based questions for CUET Entrepreneurship uploaded by the HT experts. 

MCQ Questions for CUET Entrepreneurship-Chapter-Setting Up a Small Scale Set-1

Entrepreneurship - MCQ on Setting up A Small Scale Enterprise Stage-I

Class XII

Q.1. Rearrange the steps involved in Enterprise Process Model:

1. Scanning of the environment.

2. Gathering or collecting ideas.

3. Investigation and analysis of ideas.

4. Identifying the services and products.

a. 4 à 2 à 3 à 1

b. 1 à 2 à 3 à 4

c. 4 à 3 à 2 à 1

d. 2 à 1 à 3 à 4

Answer:

(b)

Exp: The process involves the following steps:

Q.1. Scanning of the environment.

2. Gathering or collecting ideas.

3. Investigation and analysis of ideas.

4. Identifying the services and products.

5. Process of market research and analysis.

6. Setting up a project.

Q.2. _______ specifies the relationship between Knowledge & skills and the market forces.

a. Opportunity

b. Strategic position

c. Environment

d. Entrepreneurship

Answer:

(b)

Exp: Strategic position means that the entrepreneur is able to achieve his goals and objectives and fulfill the purpose of the organization.

Q.3. The process in which the raw material is changed to finished product is known as

a. Entrepreneurship

b. Extraction

c. Operation

d. Generation

Answer:

(c)

Q.4. Which step precedes the gathering of ideas?

a. Investigation and analysis of ideas.

b. Identifying the services and products.

c. Process of market research and analysis.

d. Scanning of the environment.

Answer:

(d)

Q.5. Which step precedes the market research and analysis?

a. Scanning of the environment.

b. Gathering or collecting ideas.

c. Identifying the services and products.

d. Investigation and analysis of ideas.

Answer:

(c)

Q.6. The formation of an enterprise depends on

1. Skills 2. Knowledge and 3. Market forces

a. 1 & 2 only

b. 2 & 3 only

c. 1 & 3 only

d. 1,2 & 3

Answer:

(d)

Q.7. Choose the correct option

1. Skills à Conceptual Force

2. Knowledge à Dynamic Force

3. Creativity à Dynamic Force

a. Only 1 & 2 are true

b. Only 2 & 3 are true

c. Only 1 & 3 are true

d. 1, 2 & 3 are true

Answer:

(c)

Q.8. Payment of Minimum Wages Act is related to

a. Human Resources

b. Material Resources

c. Financial Resources

d. Others Resources

Answer:

(a)

Q.9. Which of the following term/s is/are related to Human resources?

1. Marketing

2. Finance

3. Factory Act

4. Assembling

a. 1 & 3 only

b. 2 & 3 only

c. 1,2 & 3 only

d. 4 only

Answer:

(a)

Q.10. The functions performed by trained manpower include

a. Computer service

b. Installation of Machinery

c. Typing

d. Communication

Answer:

(b)

Q.11. Choose the correct statement(s)

1. Skilled and unskilled labour is a part of Human Resources

2. Processing and Assembling fall under Material Resources

3. Marketing is a part of Financial Resources

a. 1 & 2 only

b. 2 & 3 only

c. 1 & 3 only

d. 1, 2 & 3

Answer:

(a)

Q.12. Choose the correct option

Statement 1: An Entrepreneur is an important human resource.

Statement 2: An entrepreneur is both an employer and an employee.

a. (1) is correct but (2) is incorrect.

b. (1) is correct and (2) supports (1).

c. (1) is incorrect but (2) is correct.

d. (2) is correct and (1) supports (1).

Answer:

(b)

Exp: In an enterprise the human resources consist of the entrepreneur himself, trained manpower, skilled and unskilled labour and other administrative staff.

Q.13. Which of the following is the function performed by administrative staff?

a. Communication

b. Machinery Selection

c. Machinery installation

d. Both (b) & (c)

Answer:

(a)

Exp: The administrative staff performs the various tasks such book keeping, communication, office support, filing the documents, keeping the record of the tasks to be done, typing, computer work etc.

Q.14. Provident Fund Act relates

a. Human Resources

b. Material Resources

c. Financial Resources

d. Natural Resources

Answer:

(a)

Q.15. In a labour intensive industry the investment will be heavier on

a. Human Resources

b. Material Resources

c. Financial Resources

d. Natural Resources

Answer:

(a)

Q.16. Which of the following factor relates the size of the unit?

a. Communication

b. Land

c. Marketing

d. Sales

Answer:

(b)

Q.17. Land, Building, finance etc determines the _______ of the unit.

a. Success

b. Size

c. Location

d. Profit

Answer:

(b)

Q.18. The location of a unit depends on

a. Land

b. Sales

c. Market

d. Communication

Answer:

(c)

Q.19. IFCI stands for

a. Indian International Financial Corporation

b. Indian Industrial Financial Corporation

c. Industrial Finance Corporation of India

d. International Financial Corporation of Industries.

Answer:

(c)

Q.20. The factors like availability of resources & land and the market etc determine the ________ of a unit.

a. Size

b. Location

c. Manufacturing

d. Marketing

Answer:

(b)

Q.21. Which of the following is a supporting body to the entrepreneurs

a. Reserve Bank of India

b. Entrepreneurship Development Institute of India

c. Ministry of Finance

d. All of the above

Answer:

(b)

Q.22. Factories Act relates

a. Human Resources

b. Material Resources

c. Financial Resources

d. Natural Resources

Answer:

(a)

Q.23. Value addition is related to

a. Installing Machinery

b. Identifying Machinery

c. Manufacturing

d. Both (a) and (b)

Answer:

(c)

Q.24. Identification and purchasing of machinery is determined by

a. Marketing

b. Manufacturing

c. Analyzing

d. Advertising

Answer:

(b)

Q.25. Which of the following is/are considered as Collateral Security?

a. Building

b. Debtors

c. Customers

d. Share Capital

Answer:

(a)

MCQ Questions for CUET Entrepreneurship-Chapter-Setting Up a Small Scale Set-2

Q.26. Which of the following is an example of Technical Resources:

a. Know-how

b. Money

c. Dealer Agent

d. Funds

Answer:

(a)

Q.27. Which of the following is an example of Financial Resources:

a. Training

b. Money

c. Dealer Agent

d. Know-how

Answer:

(b)

Q.28. Which of the following is an example of Marketing Resources?

a. Know-how

b. Money

c. Dealer Agent

d. Funds

Answer:

(c)

Q.29. Which of the following is a component of Human resources?

a. Know-how

b. Money

c. Labour

d. Funds

Answer:

(c)

Q.30. __________ is used as security to release loans:

a. Land

b. Margin money

c. Goodwill

d. Both (a) and (b)

Exp: Collateral security refers to the fixed assets such as building, land etc that is accepted in the name of the entrepreneur to release the loan.

Q.31. Enterprise Process Model as a circle specifies:

a. One factor leads to another

b. Strategic process

c. Development

d. Progress

Answer:

(a)

Q.32.Double circle in an enterprise process model means:

a. Development

b. Progressive nature

c. Strategic process

d. Both (a) and (b)

Answer:

(d)

Exp: An enterprise process model is progressive by nature. It is a continuous process that indicates the development and the progress. Thus double circle means the continuity of the progress and development.

Q.33. Tax holiday is a/an

a. Provision

b. Incentive

c. Policy

d. Innovation

Answer:

(b)

Q.34. The Entrepreneurship Development Institute of India was set up in

a. 1982

b. 1983

c. 1984

d. 1985

Answer:

(b)

Q.35. The strength of the trained manpower is determined on the basis of

a. Techniques

b. Production

c. Machinery

d. Administration

Answer:

(a)

Q.36. The strength of skilled manpower is determined on the basis of

a. Techniques

b. Production

c. Machinery

d. Administration

Answer:

(b)

Q.37. Expand SIDBI

a. Small Industrial Departmental Board of India

b. Small industries and dual banking system

c. Small Industrial Development Bank of India

d. Administration

Answer:

(c)

Q.38. When was SIDBI setup?

a. 1988

b. 1989

c. 1990

d. 1991

Answer:

(c)

Q.39. The National Institute for Entrepreneurship and small Business Development was setup in

a. 1980

b. 1981

c. 1982

d. 1983

answer:

(d)

Q.40. The National Institute for Entrepreneurship and small Business Development was setup by

a. Ministry of Finance

b. Entrepreneurship Development of India

c. Ministry of Small Scale industries

d. A group of financial institutions.

Answer:

(c)

Entrepreneurship - MCQ on Setting Up a Small Scale

Class XII

Q.1. The recruitment, development, organisation, coordination and compensation of human resource is called as

a. Resource management.

b. General management.

c. Operations management.

d. Personnel management.

Answer:

(d)

Exp: After planning human resource requirement in an enterprise, suitable workforce is recruited, developed, coordinated, organised and compensated. This whole process is termed as Personnel management.

Q.2. Government of India supports entrepreneurship through

a. Money.

b. Incentives.

c. Awards.

d. Technology.

Answer:

(b)

Exp: The government of India, in order to encourage and develop entrepreneurship in the small scale sector provides various incentives to the prospective entrepreneurs and supports them through a vast network of institutions.

Q.3. Double circle of the enterprise process model signifies

a. Passive nature of entrepreneurial initiative.

b. Aggressive nature of entrepreneurial initiative.

c. Progressive nature of entrepreneurial initiative.

d. Inflexible nature of entrepreneurship.

Answer:

(c)

Exp: The Enterprise Process Model is visualised as a cycle, where one factor leads to another and the double circle indicates the developmental and progressive nature of entrepreneurial initiative.

Q.4. SIDO stands for

a) Small Industrial Development Organisation.

b) State Industrial Deregulation Organisation.

c) Small Independent and Development Organisation.

d) State Industries and Development Organisation.

Answer:

(a)

Exp: Small Industrial Development Organisation, known as the Office of the Development Commissioner (Small Scale Industries), operates under Ministry of Small Scale Industries as the nodal development agency for SMEs. SIDO was established on the basis of the recommendations of the Ford Foundation.

Q.5. SIDBI stands for

a. State Industrial Development Bank of India.

b. Small Independent Development Bank of India.

c. Small Industrial Development Bank of India.

d. State Industrial Deregulation Board of India.

Answer:

(c)

Exp: Small Industries Development Bank of India (SIDBI) was established through an Act of Indian Parliament as the principal financial institution for promoting, financing and developing industry in the small scale sector.

Q.6. SIDBI was established in

a. April 1986.

b) April 1988.

c) April 1990.

d. march 1990.

Answer:

(c)

Exp: Small Industries Development Bank of India (SIDBI) was established in April 1990 under an Act of Indian Parliament. Since its inception, SIDBI has been assisting the entire spectrum of SSI Sector including the tiny, village and cottage industries through suitable schemes tailored to meet the requirement of setting up of new projects, expansion, diversification, modernisation and rehabilitation of existing units.

Q.7. IFCI stands for

a. Industrial Finance Cooperative of India.

b. Industries Financial Cooperative of India.

c. Indian Financial Corporation of Industries.

d. Industrial Finance Corporation of India.

Answer:

(d)

Exp: The government established The Industrial Finance Corporation of India (IFCI) as the first Development Financial Institution in the country to cater to the long-term finance needs of the industrial sector.

Q.8. IFCI was established in

a. 1948.

b. 1950.

c. 1951.

d. 1952.

Answer:

(a)

Exp: The government established the Industrial Finance Corporation of India (IFCI) on July 1, 1948. Traditionally, IFCI has been meeting the changing requirements of the clients by endeavoring to devise various schemes and financial products for multiple industry sectors.

Q.9. National Institute for Entrepreneurship and Small Business Development has been set up for

a. Supporting small scale entrepreneurs.

b. Training established businessmen.

c. Financing established businessmen.

d. Large scale industries.

Answer:

(a)

Exp: The National Institute for Entrepreneurship and small Business Development (NIESBUD) was established by the Ministry of Small Scale Industries, Govt. of India, as an apex body for coordinating and overseeing the activities of various institutions/ agencies engaged in entrepreneurship development particularly in the area of small industry and small business.

Q.10. The National Institute for Entrepreneurship and small Business Development was setup in

a. 1980.

b. 1981.

c. 1982.

d. 1983.

Answer:

(d)

Exp: The National Institute for Entrepreneurship and small Business Development (NIESBUD) was established in 1983 by the Ministry of Small Scale Industries, Govt. of India. The institute aims at promoting, supporting and sustaining entrepreneurship and small businesses through providing training, education, research, consultancy and other interventions.

Q.11. The National Institute for Entrepreneurship and small Business Development was setup by

a. A group of successful entrepreneurs.

b. Ministry of small scale industries.

c. Small industries development organisation.

d. Ministry of finance.

Answer:

(b)

Exp: The National Institute for Entrepreneurship and small Business Development (NIESBUD) was established in 1983 by the Ministry of Small Scale Industries, Govt. of India.

Q.12. In a labour intensive manufacturing unit, there would be more investment on

a. Human resource.

b. Material resource.

c. Financial resources.

d. Fixed assets.

Answer:

(a)

Exp: While setting up a labour intensive manufacturing unit the investment on human resource would be more than the other resources. Since productivity as well as profitability of a labour intensive manufacturing unit depends upon its workforce.

Q.13. One of the constituents of human resource of an enterprise is

a. Vendors.

b. Creditors.

c. Skilled labour.

d. Distributors.

Answer:

(c)

Exp: An enterprise’s human resource consists of trained man power, skilled and unskilled labour and administrative staff. An entrepreneur himself is a very important human resource as he is both an employer and an employee.

Q.14. One of the decisive variables that indicates the efficiency of manufacturing process

a. Cost.

b. Installed capacity.

c. Location.

d. Machinery.

Answer:

(a)

Exp: An entrepreneur has to choose the most appropriate manufacturing process from the options available to him. He should select the process, which deliver the specified product with in cost parameters.

Q.15. A document providing details of project cost, means of finance and other financial calculations for different organizations and agencies is known as

a. Preliminary Project Report.

b. Project Report.

c. Final Project Report.

d. Feasibility Plan.

Answer:

(a)

Exp: An entrepreneur must prepare a Preliminary Project Report after planning human, material and financial resources. It is a document, which provides details of project cost, means of finance and other financial calculations which would be required to be supplied to different related organizations & agencies.

Q.16. The Enterprise Process Model is depicted as a circle as

a. Different factors occur simultaneously.

b. Factors are not related.

c. Factors occur in groups.

d. One factor leads to another.

Answer:

(d)

Exp: The Enterprise process model is visualised as a cycle as one factor leads to another. It also depicts that there should be continuous process of refining, improving and upgrading the already established enterprise.

Q.17. A large scale unit in a heavy industry sector would require more investment on

a. Skilled labourers.

b. Heavy machineries.

c. Administrative staffs.

d. Unskilled labourers.

Answer:

(b)

Exp: A large scale unit in heavy industry sector places great importance upon heavy machineries as they are the mainstay of production. The quality and quantity of machinery would determine production quantity as well as profitability of the enterprise.

Q.18. The type and quantity of machinery required in an enterprise depends upon

a. Manufacturing process.

b. Sources of supply.

c. Requirement of maintenance.

d. Human resource.

Answer:

(a)

Exp: The selected manufacturing process of an enterprise helps an entrepreneur in identification as well as purchase of machinery. It also decides the type and quantity of machinery required in an enterprise. Modern machinery and production processes help an enterprise to maintain low cost of production and thus increase profitability.

Q.19. The provisional registration of an enterprise is done on the basis of

a. Preliminary project report.

b) Final project report.

c) Project report.

d. Credit report.

Answer:

(a)

Exp: It is important that the entrepreneur should obtain a provisional registration for the enterprise to avail loans, assistance from the state and central small scale industries department etc. He obtains it from the concerned department of state on the basis of the preliminary project report.

Q.20. An entrepreneur obtains the provisional registration of the enterprise from the

a. District commissioner’s office.

b. Ministry of small scale industries.

c. District industries centre.

d. Ministry of finance.

Answer:

(c)

Exp: An entrepreneur obtains the provisional registration of the enterprise from the District Industries Centre. This registration entitles the entrepreneur to allotment of land, electricity and water connection etc.

Q.21. An entrepreneur is entitled to the allotment of land, electricity, water connection etc. after obtaining

a. Bank loan.

b. License.

c. Project report.

d. Provisional Registration.

Answer:

(d)

Exp: After obtaining the provisional registration of the enterprise from the District Industries Centre, an entrepreneur is entitled to the allotment of land, electricity, water connection etc.

Q.22. While setting up an enterprise an entrepreneur after investigation of ideas proceeds with

a. Setting up the project.

b. Environment scanning.

c. Product/service identification.

d. Market research.

Answer:

(c)

Exp: As clearly depicted in the Enterprise Process Model, an entrepreneur, while preparing to set up an enterprise proceeds with the product or service identification after completing the investigation of business ideas.

Q.23. People who own, operate and take risk associated with a business venture are called

a. Employees.

b. Entrepreneurs.

c. Entrepreneurship.

d. Capitalist.

Answer:

(b)

Exp: The entrepreneurs are individuals who are completely responsible for starting a business venture, whose ownership lies with them. They operate the business according to their own knowledge and skill. The success or failure of their venture depends upon their business acumen.

Q.24. After scanning the environment an entrepreneur proceeds with

a. Investigating business ideas.

b. Gathering business ideas.

c. Product or service identification.

d. Feasibility study.

Answer:

(b)

Exp: An entrepreneur scans the environment around him in order to search and gather different business ideas, which he can then turn into business opportunities. Thus, the step immediately succeeding the environment scanning is the gathering of business ideas in the process of setting up an enterprise.

Q.25. After a thorough market research and feasibility study, an entrepreneur proceeds with

a. Product or service identification.

b. Strategic positioning.

c. Setting up the project.

d. Environment scanning.

Answer:

(c)

Exp: An entrepreneur after completing the market research and feasibility study of the selected business idea proceeds with setting up the enterprise as now he is sure of the business potential of his venture.

MCQ Questions for CUET Entrepreneurship-Chapter-Setting Up a Small Scale Set-3

Q.26. The centre of the Enterprise Process model consists of

a. Entrepreneurial knowledge and skill.

b. Idea generation.

c. Product or service identification.

d. Setting up a project.

Answer:

(a)

Exp: In the Enterprise Process Model the entrepreneurial characteristics of knowledge and skill, strategic positioning and action occupy the centre of the diagram, as they orchestrate the whole process of setting up an enterprise.

Q.27. The most crucial aspect of the process of setting up a business enterprise is

a. Strategic positioning of business idea.

b. Environment scanning.

c. Gathering ideas.

d. Market research.

Answer:

(a)

Exp: The most crucial aspect of the process of setting up of an enterprise is the strategic positioning of the selected business idea, achieved by the entrepreneur. This is reflected in the overlapping area of knowledge and skills and market dynamics.

Q.28. The Enterprise Process Model is visualised as a/an

a. Acyclic diagram.

b. Cyclic diagram.

c. Open chain diagram.

d. Tabular diagram.

Answer:

(b)

Exp: The Enterprise Process Model is visualised as a cycle, where one factor leads to another. Thus, it depicts the cycle of ideas maturing into an enterprise which in turn depend upon one another for their appropriate execution.

Q.29. The equilibrium between entrepreneurial characteristics and market dynamics gives birth to

a. Market competition.

b. An entrepreneur.

c. An enterprise.

d. Various market forces.

Answer:

(c)

Exp: It has been experienced that when there is equilibrium between the two sets of forces, i.e. the forces of knowledge, skill, competency and creativity of the entrepreneur and that of the market then an enterprise comes into existence.

Q.30. A very concise analysis of the process of setting up of an enterprise is given by

a. Bill Bolton and John Thompson.

b. R. L. Stevenson.

c. Trever Baylis.

d. Christopher Staines.

Answer:

(a)

Exp: Bill Bolton and John Thompson described the process of setting up of an enterprise as a result of an entrepreneur’s conviction and appropriate sense of direction with which they are able to build value. In the complete process their strategies play a very crucial role.

Q.31. Bill Bolton and John Thompson described an entrepreneur’s ways of achieving objectives and fulfilling the purpose of the organisation as

a. Entrepreneurial skills.

b. Planning.

c. Business decisions.

d. Business strategies.

Answer:

(d)

Exp: Bill Bolton and John Thompson described that successful entrepreneurs have purpose and direction because of which they are able to build value. They accomplish success in their business venture due to their successful strategies which can be described as means to ends.

Q.32. In the beginning of an organization’s life, it has

a. Lower quality of products/services.

b. Best quality of products/services.

c. Wide range of product/services.

d. Limited range of products/services.

Answer:

(d)

Exp: It has been experienced that at the beginning of an organisation’s life, there is likely to be only one or a very limited range of products or services and this expands considerably as the organisation prospers.

Q.33. In order to sustain an already established enterprise in a dynamic business environment, an entrepreneur should resort to

a. Deploying more man power.

b. Change and continuous innovation.

c. More production.

d. Lower investment.

Answer:

(b)

Exp: An entrepreneur should resort to change, flexibility and continuous innovation in order to sustain growth of an already established enterprise. This action would help an enterprise to cope up with market dynamics as well as keep pace with the changing times and consumer preferences.

Q.34. An entrepreneur’s sound business strategies help an enterprise to

a. Achieve competitive edge.

b. Collection of data.

c. follow competitor’s policy.

d. Identify and purchase machinery.

Answer:

(a)

Exp: Sound business strategies facilitate an enterprise to gain competitive edge over other competitors in the market, which is very important for an enterprise to grow and sustain its growth in the long term.

Q.35. The process of diversification helps a company to

a. Sustain its growth.

b. Enter into market.

c. Increase its production.

d. Decrease its cost of production.

Answer:

(a)

Exp: An enterprise after its initial phases, efforts towards expanding its range of products through diversification so as to increase its reach to customers. This process helps an enterprise to grow as well as sustain its growth in long term.

Q.36. An entrepreneur applies for loans, electricity connection and land on the basis of the

a. Business plan.

b. Feasibility plan.

c. Final project report.

d. Preliminary project report.

Answer:

(a)

Exp: An entrepreneur applies for loans from financial institutions, electricity connection from concerned electricity board and land from the concerned authority on the basis of the prepared preliminary project report.

Q.37. One of the two phases of entrepreneurial process is

a. environment scanning.

b. Product or service identification.

c. Idea generation.

d. Championing a project.

Answer:

(d)

Exp: The two phases in the entrepreneurial process are, firstly, spotting an opportunity and secondly, championing a project, which elaborately describes the complete process of setting up an enterprise.

Q.38. An entrepreneur’s imagination, creativity and innovation adds value to the

a. competitor’s product.

b. Existing business concept.

c. size of Market

d. competitor’s market strategy.

Answer:

(b)

Exp: It has been observed that many new business enterprises are conceived on ideas and concepts that are repackages of existing ideas, which shows that a little imagination, creativity and innovation is required to add value to the existing business concepts.

Q.39. The process of conversion of raw material into finished product is known as

a. Operation.

b. Extraction.

c. Generation.

d. Creation.

Answer:

(a)

Exp: A business enterprise, whether involved in production of products or services has to necessarily carry out certain operations combining raw materials, processing and assembling, utilising workers, machines, tools and power. such process of changing raw materials into finished products with value addition is called an Operation.

Q.40. In an enterprise, the man power constituting the technological expertise and often engaged in identification, installation and supervision of machinery is called as

a. Trained man power.

b. Skilled labour.

c. Administrative staff.

d. Unskilled labour.

Answer:

(a)

Exp: In an enterprise, it is the trained man power which constitutes the technological expertise and they are often engaged in selecting the required machinery for the enterprise, its installation and commissioning as well as overall supervision.

Q.41. In actual production, repair and maintenance activities are carried by

a. work force.

b. Trained man power.

c. Administrative staff.

d. Skilled and unskilled labour force.

Answer:

(d)

Exp: In an enterprise, the skilled and unskilled labour force are involved in the actual production and in repair as well as maintenance activities carried out on plant and machineries.

Q.42. In an enterprise, the office support such as book keeping, typing, computer service, communication etc. is provided by the

a. Skilled labour.

b. Skeletal administrative staff.

c. Administrative staff.

d. Trained man power.

Answer:

(c)

Exp: The administrative staff in an enterprise is assigned the responsibility of providing office support services, which includes book keeping, communication, computer service, typing etc. required for the proper and efficient functioning of the enterprise.

Q.43. At the end of the first stage of setting up of a small scale enterprise, an entrepreneur would have

a. Investigated the generated ideas.

b. Scanned environment.

c. Applied for loans.

d. Identified product or service.

Answer:

(c)

Exp: At the end of the first stage of the process of setting up of a small scale enterprise, the entrepreneur has applied for loans, electricity connection and land.

Q.44. The Factories Act is related with an enterprise’s

a. Material resource.

b. Financial resource.

c. Plant and machinery.

d. Human resource.

Answer:

(a)

Exp: In India, there are certain statutory requirements governing the compensation and welfare measures for the employees of the enterprises. Factories Act is one of them and they have to be followed by all the enterprises, irrespective of their size.

Q.45. Payment of Minimum Wages Act lays down guidelines regarding employees

a. Working conditions.

b. Compensation issues.

c. Insurance issues.

d. Provident fund.

Answer:

(b)

Exp: Government of India has laid down statutory requirements, which govern the compensation and welfare measures of the employees. These are stipulated under different Acts. The Payment of Minimum Wages Act lays down directives regarding minimum wages that an enterprise should pay to its workforce.

Q.46. The size of an enterprise refers to its

a. Invested capital.

b. Material resources.

c. Human resource.

d. Installed capacity.

Answer:

(a)

Exp: The size of a unit refers to the size of production the enterprise is capable of, which is depicted through its installed capacity. The size in turn depends upon a number of factors such as finance, land, building etc.

Q.47. In India, most of the industrial units utilise

a. Electrical power.

b. Thermal power.

c. Hydroelectric power.

d. Solar power.

Answer:

(a)

Exp: An enterprise, in order to carry out the process of production requires a suitable source of power which meets its requirements as well as is cost effective. Thus, most of the industrial units in the country utilise electrical power for which a proper permission is obtained from the concerned electricity board.

Entrepreneurship - MCQ on Setting Up a Small Scale

Class XII

Q.1. Trial production means

a. production for self.

b. production for marketing purpose.

c. production under restriction.

d. production in small proportion for testing.

answer:

(d)

Exp: A trial production is initiated after the required machinery is in place and operational and the recruited manpower has been allotted their respective work. It is generally carried out to check whether the final product is as per specifications planned or not. After this, the entrepreneur proceeds with immediate commercial production.

Q.2. New Economic Policy was introduced in

a. 1991.

b. 1992.

c. 1993.

d. 1994.

answer:

(a)

Exp: The New Industrial Policy was announced in July 1991, with the aim of liberalisation, privatisation and globalisation. It also aimed at maintaining a sustained growth in productivity, gainful employment and international competitiveness.

Q.3. A project report includes details of

a. financiers views.

b. entrepreneur’s other investments.

c. competitor’s future strategies.

d. Government approvals.

(c)

Exp: The project report is a document that bears every detail of the project under various heads like product, marketing strategies, manufacturing process, profitability, land and building, staffing, machinery etc.

Q.4. A preliminary project report is prepared to

a. obtain provisional registration.

b. provide details of human resource.

c. provide details of raw materials.

d. provide details of physical resource.

answer:

(a)

Exp: A preliminary project report is a document providing details of project cost, means of finance and other financial calculations to be supplied to different agencies. After preparing this report, the entrepreneur proceeds to obtain provisional registration of the unit from District Industries Centre.

Q.5. The Project report is an extension of

a. business plan.

b. feasibility report.

c. preliminary project report.

d. marketing plan.

answer:

(c)

Exp: A preliminary project report is a document which provides details of project cost, means of finance and other financial calculations to be supplied to different agencies. A project report is a comprehensive version of information provided in the preliminary project report.

Q.6. NOC stands for

a. new operating chart.

b) non operational certificate.

c) no objection certificate.

d. new operation certificate.

answer:

(c)

Exp: The NOC stands for No Objection Certificate. It is an official document which provides the permission to set up an enterprise. There are some products which can be produced only after procuring no objection certificate from the govt. of India or from other regulatory authorities of the government.

Q.7. The entrepreneur can arrange for seed money through soft loans once he

a. obtains No Objection Certificate.

b. prepares project report.

c. establishes marketing network.

d. obtains formal sanction of loan.

answer:

(d)

Exp: Once the formal sanction of the loan is obtained by the entrepreneur, he can then arrange the seed money, which is the initial capital required to set up the business. This initial capital is arranged by the entrepreneur through the soft loans provided especially by financial institutions at lower rates.

Q.8. Globalisation means

a. increasing connectivity with countries.

b. freedom from government control.

c. transfer of ownership.

d. public ownership.

answer:

(a)

Exp: Globalisation means increasing global connectivity. It refers to a process by which regional economies, societies and cultures have become integrated through a global network of communication, transportation and trade.

Q.9. At detailing manpower stage, an entrepreneur

a. recruits according to requirement.

b. obtains NOC.

c. applies for permanent registration.

d. installs machinery.

answer:

(a)

Exp: While detailing manpower, an entrepreneur recruits work force according to actual requirement. Later when the installation of machinery is completed and they become operational, the manpower is allotted their work and place.

Q.10. Liberalisation means

a. increasing global connectivity.

b. transfer of ownership.

c. public ownership.

d. freedom from government ownership.

answer:

(d)

Exp: Liberalisation refers to a process of relaxation of previous government restrictions, usually in areas of social or economic policy. Most often, the term is used to refer economic liberalisation, especially trade liberalisation or capital market liberalisation.

Q.11. An entrepreneur determines the validity of the specification of the final product by carrying out

a. market research.

b. production.

c. feasibility plan.

d. commercial production.

answer:

(b)

Exp: At the stage of detailing manpower, an entrepreneur carries out trial production in order to determine the validity of the specification of the final product. After which if the product is found to be as per planned specifications, then he can go ahead with commercial production.

Q.12. An entrepreneur procures seed money while

a. obtaining formal sanction of loan.

b. obtaining NOC.

c. detailing manpower.

d. establishing marketing network.

answer:

(a)

Exp: The formal sanction of loan enables an entrepreneur to procure seed money, which is the initial capital required to start the business. He procures it through soft loans from the financial institutions.

Q.13. The preliminary Project Report is a/an

a. permanent document.

b. elaborate document.

c. temporary document.

d. legal document.

answer:

(c)

Exp: An entrepreneur prepares a preliminary project report in order to obtain provisional registration with the District Industries Centre, which helps him in applying for loan, electricity, water connection and land. It is an official document, which an entrepreneur needs to present to different agencies. This is a temporary and precise document, which later is converted into a detailed project report.

Q.14. Soft loan means

a. loan at lower rate.

b. loan at higher rate.

c. loan for SSIs.

d. loan for government units.

answer:

(a)

Exp: Soft loans are that form of financing which offers flexible or lenient terms for repayment, usually at lower rates than market interest rates. Soft loans are provided customarily by government agencies and not by financial institutions. This is also called concessional funding.

Q.15. An entrepreneur obtains a No Objection Certificate for his paper based enterprise from

a. district industries centre.

b. municipal corporation.

c. pollution control board.

d. forest department.

answer:

(c)

Exp: As paper based industries come under the category of industries, which are required to obtain a no objection certificate in order to set up an enterprise and start production. They are required to obtain this certificate from the pollution control board.

Q.16. An entrepreneur obtains license for his tannery at the stage of

a. detailing man power.

b. applying for permanent registration.

c. obtaining formal sanction of loan.

d. obtaining NOC.

answer:

(d)

Exp: Obtaining NOC is a crucial step before proceeding to set up a tannery. Tannery comes under the category of industries that legally require NOC to start a business. Thus, obtaining NOC is an important stage while setting up a tannery.

Q.17. For permanent registration, an entrepreneur applies to the

a. Municipal Corporation.

b. District Industries Centre.

c. Ministry of Small Scale Industries.

d. Pollution Control Board.

answer:

(b)

Exp: An entrepreneur applies to the District Industries Centre in order to obtain the permanent registration of his unit. This permanent registration helps an entrepreneur in getting various government incentives, excise clearances and for other regulatory requirements.

Q.18. An entrepreneur carries out trial production at the stage of

a. detailing manpower.

b. preparation of project report.

c. installation of machinery.

d. construction of building.

answer:

(a)

Exp: In an enterprise, the trial production is done to verify whether the final product is as per the planned specifications or not. This process is carried out at detailing manpower stage when an enterprise makes arrangements for starting production.

Q.19. The provisional registration of an enterprise is done on the basis of

a. preliminary project report.

b) final project report.

c) debit report.

d. credit report.

answer:

(a)

Exp: It is important that the entrepreneur should obtain a provisional registration for the enterprise to avail loans, assistance from the state and central small scale industries department etc. He obtains it from the concerned department of state on the basis of the preliminary project report.

Q.20. An entrepreneur obtains the provisional registration of the enterprise from the

a. District commissioner’s office.

b. Ministry of Small Scale Industries.

c. District Industries Centre.

D) Ministry of Finance.

answer:

(c)

Exp: An entrepreneur obtains the provisional registration of the enterprise from the District Industries Centre. This registration entitles the entrepreneur the allotment of land, electricity and water connection etc.

Q.21. An entrepreneur applies for the allotment of land, electricity, water connection etc. after obtaining

a. bank loan.

b. license.

c. project report.

d. provisional registration.

answer:

(d)

Exp: After obtaining the provisional registration of the enterprise from the District Industries Centre, an entrepreneur is entitled to the allotment of land, electricity, water connection etc.

Q.22. Seed money means

a. fixed capital.

b. startup capital.

c. operating expenses.

d. working capital.

answer:

(b)

Exp: In the initial stages of a firm, comparatively small amount of capital is contributed by a firm's founder(s). It is rarely provided by lenders or institutional investors because startup is the riskiest stage in a firm's life cycle with the highest chance of failure; thus, is generally provided by the government agencies. It is also called front end money, front money or startup capital.

Q.23. An entrepreneur begins the practical steps to set up an enterprise by

a. detailing man power.

b. obtaining formal sanction of loan.

c. obtaining NOC.

d. preparing project report.

answer:

(d)

Exp: When an entrepreneur has decided upon a business idea he starts with the process of providing it a physical shape by first preparing a project report. This helps him in analysing the project in detail.

Q.24. After preparing a detailed project report an entrepreneur proceeds with

a. obtaining formal sanction of loan.

b. obtaining NOC.

c. construction of enterprise building.

d. detailing man power.

answer:

(b)

Exp: An entrepreneur while proceeding with the practical steps for setting up a business works towards obtaining a no objection certificate after preparing a detailed project report.

Q.25. After obtaining a no objection certificate, an entrepreneur proceeds with

a. establishing marketing network.

b. strategic positioning.

c. obtaining formal sanction of loan.

d. environment scanning.

answer:

(c)

Exp: An entrepreneur proceeds to obtain the formal sanction of the loan from bank after obtaining the no objection certificate from the government body or the pollution control board. The formal sanction of loan would enable him to proceed with purchase of land and building, recruit manpower, buy machinery etc. and commence production.

Q.26. An entrepreneur starts with the construction of his enterprise building, after he has

a. received the formal sanction of loan.

b. prepared the project report.

c. installed the machineries.

d. detailed the manpower requirement.

answer:

(a)

Exp: The formal sanction of loan enables the entrepreneur to arrange for the seed capital so as to start with the construction of enterprise building or rent premises to start production in the enterprise.

Q.27. The project report is based upon

a. preliminary project report.

b. feasibility study.

c. business plan.

d. market research.

answer:

(a)

Exp: The project report, which an entrepreneur prepares to provide details of the project to various agencies, is an extension of the preliminary project. The preliminary project report only focuses on the financial analysis of the project while the project report includes all the necessary components required to set up an enterprise.

Q.28. The project report provides details regarding the profitability particulars for the next

a. one year.

b. three years.

c. five years.

d. seven years.

answer:

(c)

Exp: The project report provides the details of the project and presents the profitability forecasts of the enterprise for the next five years.

Q.29. A small scale enterprise would require a no objection certificate from the pollution control board if it is engaged in the production of

a. wooden handicraft.

b. medical equipments.

c. medicines.

d. handmade paper bags.

answer:

(c)

Exp: Enterprises that are engaged in the production of chemical products, mineral products, forest products, tanneries, medicines etc. are required to obtain a no objection certificate from the concerned government body as well as from the pollution control board.

Q.30. Commercial production commences in an enterprise only after successful

a. completion of the production.

b. installation of machineries.

c. recruitment of man power.

d. establishment of market linkages.

answer:

(a)

Exp: An entrepreneur can go for immediate commercial production only after successful completion of production, which is carried out to verify whether the final product is according to the planned specifications or not.

Q.31. The phase ‘An enterprise after establishment needs careful nurturing’, is called

a. take off stage.

b. maturity stage.

c. building and growing stage.

d. declining stage.

answer:

(c)

Exp: Once the enterprise comes into being, it requires careful nurturing by the entrepreneur in order to achieve growth and development. This phase is often termed as the “Building and growing stage”.

Q.32. Before installing machinery in the enterprise, an entrepreneur should

a. apply for permanent registration.

b. inspect the machinery.

c. select the cheaper option.

d. establish marketing linkages.

answer:

(b)

Exp: It is advisable that before installation of the machinery, an entrepreneur should visit the manufacturer of the machinery to inspect the machine and its operation before it is shipped to his unit. This helps in verifying the specifications of the machinery beforehand and saves any wastage of time and other resources later.

Q.33. After installation of the machinery, the entrepreneur should proceed with the

a. trial production.

b. process of permanent registration.

c. immediate commercial production.

d. test run of the machinery.

answer:

(a)

Exp: An entrepreneur should instruct to necessarily carry out a test run of the installed machinery in the presence of the company representatives. This is important to check whether the operations of the machinery are as according to the enterprise’s requirements.

Q.34. After installation of the machinery, provisions should be made to impart on hand operation training for

a. administrative staff.

b. trained man power.

c. skilled and unskilled labour.

d. maintenance staff.

answer:

(c)

Exp: The skilled and unskilled labour force would be involved in the actual production process as well as in the repair and maintenance activities in the enterprise; thus, they require proper training in order to operate the machinery.

Q.35. In an enterprise, the machinery should be installed and checked for capacity, cost and quality by the

a. trained manpower.

b. administrative staff.

c. skilled labour.

d. marketing staff.

answer:

(a)

Exp: While installing machinery in the enterprise, it is advisable that the machinery should be selected, installed as well as checked by the trained manpower on the various parameters such as quality, cost and capacity.

Q.36. Smooth marketing of the product is facilitated by an enterprise’s

a. inventory levels.

b. production capacity.

c. marketing network.

d. quality control system.

answer:

(c)

Exp: The entrepreneur must establish linkages with different distributors and sellers by showing them the product manufactured in the enterprise. Such marketing network would facilitate the smooth marketing of the product in the market.

Q.37. Various entrepreneurship development bodies help an entrepreneur in

a. installing machinery.

b. completing required paper work.

c. establishing marketing network.

d. construction of enterprise building.

answer:

(b)

Exp: An entrepreneur takes help from various entrepreneurship development bodies while setting up the enterprise. These agencies help the entrepreneur in completing the required paper work as per the prescribed norms for the purpose of loan, permanent registration, no objection certificate etc.

Q.38. A project report helps an entrepreneur in

a. establishing marketing linkages.

b. calculating tax liabilities.

c. preparing strategies.

d. advertising his product.

answer:

(c)

Exp: A project report is of a great help for entrepreneur as it is a blue print, which helps him to explain his idea to financiers, clients, government agencies etc. It helps him in the preparation of his business strategies.

Q.39. A project report helps the financial institutions to find out projects

a. tax liabilities.

b. feasibility.

c. actual profit.

d. future course of action.

answer:

(a)

Exp: Entrepreneurs tak