Question Set B

cbse 12th Standard Business Studies Controlling Important Questions And Answers Study Material - QB365

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Questions:

Multiple Choice Question

70 x 1 = 70

To be listed on OTCEI, the minimum capital requirement for a company is

(a)

Rs 5 crores

(b)

Rs 3 crores

(c)

Rs 6 crores

(d)

Rs 1 crores

Which of the following is not correct?

(a)

Controlling is goal oriented

(b)

Controlling ensures order and discipline

(c)

Controlling is pervasive function

(d)

Contolling can prevent deviations

Controlling cannot prevent __________.

(a)

Setting Standards

(b)

Comparision of Actual and planned standards

(c)

Deviations

(d)

Order and Discipline

If there is lack of motivation among employees, suggest one better corrective action

(a)

Warning to employees

(b)

New Recruitment

(c)

Deal Strictly

(d)

Providing Suitable incentives

If actual performance is less than the standard performance it is called _______.

(a)

Improved Deviation

(b)

Better Deviation

(c)

Negative Deviation

(d)

Positive Deviation

When actual performance is better than the standard performance it is called __________.

(a)

Negative Deviation

(b)

None of these

(c)

Poor Deviation

(d)

Positive Deviation

Which of the following is a limitation of controlling?

(a)

Controlling improves employee motivation

(b)

Controlling is goal oriented

(c)

Controlling ensures order and discipline

(d)

Controlling is expensive

Why actual performance is compared with standards?

(a)

To take corrective action

(b)

To improve the quality of material

(c)

None of these

(d)

To change the machinery

Setting a standard time, say, 6 hours to perform a task is an example of ___________.

(a)

Qualitative Standards

(b)

None of these

(c)

Qualitative and Quantitative Standards

(d)

Quantitative Standards

10.

Controlling is _______.

(a)

Free

(b)

Economical

(c)

Costly

(d)

Very Cheap

11.

The main focus of controlling is on ________.

(a)

Competition

(b)

Business Environment

(c)

Results

(d)

External Forces

12.

Controlling is necessary for ____________.

(a)

Large Scale Enterprise

(b)

Medium Level Enterprise

(c)

All of these

(d)

Small Scale Enterprise

13.

What is not correct about controlling?

(a)

Controlling is pervasive function

(b)

Controlling is External Source

(c)

Controlling is a continuous process

(d)

Controlling is goal oriented

14.

There is one popular saying that Planning is looking ______________ while controlling is looking _________.

(a)

Ahead, Back

(b)

Back, Ahead

(c)

Future, Present

(d)

None of these

15.

Planning without controlling is ________.

(a)

Effective

(b)

Cheap

(c)

Costly

(d)

Meaningless

16.

Controlling is blind without _____________.

(a)

Budgeting

(b)

Staffing

(c)

Capital market

(d)

Planning

17.

Budgetary control requires the preparation of

(a)

Training schedule

(b)

Budgets

(c)

Network diagram

(d)

Responsibility centres

18.

Which of the following is not applicable to responsibility accounting

(a)

Investment centre

(b)

Accounting centre

(c)

Profit centre

(d)

Cost centre

19.

Management audit is a technique to keep a check on the performance of

(a)

Company

(b)

Management of the company

(c)

Shareholders

(d)

Customers

20.

Controlling function of an organisation is

(a)

Forward looking

(b)

Backward looking

(c)

Forward as well as backward looking

(d)

None of the above

21.

An efficient control system helps to

(a)

Accomplishes organisational objectives

(b)

Boosts employee morale

(c)

Judges accuracy of standards

(d)

All of the above

22.

At present only two depositories are registered with SEBI ________.

(a)

NSDL and ABSL

(b)

NEFT and TDS

(c)

NSDL and HDFC

(d)

NSDL and CDSL

23.

What is meant by Demat Account?

(a)

Dematerialisation of of Securities

(b)

Depository Participant Account

(c)

Demand Depository Account

(d)

Development Market Account

24.

Under Private Placement Company sell securities to some selected institutions. From the following identify such institution.

(a)

GIC

(b)

UTI

(c)

All of these

(d)

LIC

25.

What is the meaning of right issue?

(a)

None of these

(b)

Company sells the securities to some selected institutions

(c)

Company offers new shares to its existing shareholders

(d)

Securities are not issued to existing shareholders at all

26.

Which of the following is a method of floatation?

(a)

All of these

(b)

Offer for sale

(c)

Offer through prospectus

(d)

Private Placement

27.

Only institutional investors can participate in ________.

(a)

Foreign Market

(b)

Capital Market

(c)

Loan Market

(d)

Money Market

28.

Money market deals in ___________.

(a)

Medium term securities

(b)

Short term Securities

(c)

Long term Securities

(d)

None of these

29.

A capital market is ideal when:

(a)

Financial institutions are sufficiently developed

(b)

Finance is available at reasonable cost

(c)

All of these

(d)

Capital is most productively allocated

30.

When a trade bill is accepted by a commercial bank, it is known as a __________

(a)

Commercial Bill

(b)

Call money

(c)

None of these

(d)

Certificate of deposit

31.

A commercial bill is used to ________.

(a)

Finance the working capital requirements

(b)

Meet the short term debt

(c)

Meet the long term debt

(d)

Pay the interest

32.

Treasury bills are also known as __________.

(a)

Fixed interest Bonds

(b)

Flate Rate Bonds

(c)

Low Interest Bonds

(d)

Zero Coupon Bonds

33.

A Treasury bill is an instrument of ________.

(a)

Dividend

(b)

Short term debt

(c)

Interest

(d)

Long term debt

34.

The expected rate of return of the money market is _________.

(a)

Very high

(b)

Less

(c)

Zero

(d)

35.

___________ Market instruments enjoy higher degree of liquidity

(a)

Capital market

(b)

Money market

(c)

None of these

(d)

Both money and capital market

36.

What type of instruments are traded in a Money Market?

(a)

All of these

(b)

Call money

(c)

Treasury bills

(d)

Commercial bills

37.

A Treasury Bill is basically:

(a)

An instrument to borrow short-term funds

(b)

An instrument to borrow long-term funds

(c)

An instrument of capital market

(d)

None of the above

38.

Clearing and settlement operations of NSE are carried out by:

(a)

NSDL

(b)

NSCCL

(c)

SBI

(d)

CDSL

39.

NSE commenced futures trading in the year:

(a)

1999

(b)

2000

(c)

2001

(d)

2002

40.

The National Stock Exchange of India was recognized as stock exchange in the year:

(a)

1992

(b)

1993

(c)

1994

(d)

1995

41.

The settlement cycle in NSE is:

(a)

T + 5

(b)

T + 3

(c)

T + 2

(d)

T+1

42.

The total number of Stock Exchanges in India is:

(a)

(b)

(c)

(d)

43.

Primary and secondary markets:

(a)

Compete with each other

(b)

Complement each other

(c)

Function independently

(d)

Control each other

44.

Favourable financial leverage is a situation where __________.

(a)

ROI is Equal to the Rate of interest on debt

(b)

None of these

(c)

ROI is higher than the rate of interest on debt

(d)

ROI is lower than the rate of interest on debt

45.

___________ refers to the increase in profit earned by the equity shareholders due to the presence of fixed financial charges like interest.

(a)

Interest

(b)

Retained Earnings

(c)

Dividend

(d)

Trading on equity

46.

Cost of advertising and printing prospectus is called ____________.

(a)

Dividend cost

(b)

Equity cost

(c)

Debt cost

(d)

Floatation cost

47.

The main objective of financial planning is to ensure that __________.

(a)

Purchase of fixed assets

(b)

Enough funds are available at the right time

(c)

Dividend is paid to shareholders on the right time

(d)

Purchase of raw material

48.

___________ means estimating the funds requirement of a business and determining the sources of funds for current and fixed assets and future expansion prospects.

(a)

Capital Structure

(b)

Dividend Decisions

(c)

Working Capital

(d)

Financial Planning

49.

Which of the following affects the Dividend Decision of a company?

(a)

Cash Flow Position

(b)

Taxation Policy

(c)

Earnings

(d)

All of these

50.

Portion of profit after tax, which is distributed to shareholders is a __________.

(a)

Investment Decision

(b)

Dividend Decision

(c)

Financing Decision

(d)

None of these

51.

Which of the following will affect the financing decisions?

(a)

Cash flow position

(b)

All of these

(c)

Cost and Risk

(d)

Floatation costs

52.

Borrowed funds refer to the ___________

(a)

Debentures

(b)

All of these

(c)

Long term loans

(d)

Public Deposits

53.

Shareholders funds refer to

(a)

Share capital

(b)

All of these

(c)

Surpluses and Retained Earnings

(d)

Reserves

54.

Short term investment decisions affect the __________.

(a)

Long term profitability

(b)

Large amount of funds for future

(c)

Day to Day working of business

(d)

Purchase of fixed assets

55.

Which of the following affects capital budgeting decision?

(a)

Cash Flow of the Project

(b)

Investment Criteria and interest rate

(c)

Rate of Return

(d)

All of these

56.

Which of the following is not concerned with the Long term investment decision

(a)

Opening a new branch

(b)

Inventory management

(c)

Research and Development Programme

(d)

Management of fixed capital

57.

Short-term Investment Decision is also known as ________

(a)

Dividend Decision

(b)

Capital Budgeting

(c)

None of these

(d)

Working capital

58.

Long term investment decision is also known as_________.

(a)

Working Capital

(b)

None of these

(c)

Dividend Decision

(d)

Capital Budgeting

59.

Current assets of a business firm should be financed through:

(a)

current liability only

(b)

long-term liability only

(c)

both types (i.e. long and short term liabilities)

60.

A fixed asset should be financed through:

(a)

a long-term liability

(b)

a short-term liability

(c)

a mix of long and short-term liabilities

61.

Higher dividend per share is associated with:

(a)

high earnings, high cash flows, unstable earnings and higher growth opportunities

(b)

high earnings, high cash flows, stable earnings and high growth opportunities

(c)

high earnings, high cash flows, stable earnings and lower growth opportunities

(d)

high earnings, low cash flows, stable earnings and lower growth opportunities

62.

Financial planning arrives at:

(a)

minimising the external borrowing by resorting to equity issues

(b)

entering that the firm always have significantly more fund than required so that there is no paucity of funds

(c)

ensuring that the firm faces neither a shortage nor a glut of unusable funds

(d)

doing only what is possible with the funds that the firms has at its disposal

63.

Current assets are those assets which get converted into cash:

(a)

within six months

(b)

within one year

(c)

between one and three years

(d)

between three and five years

64.

Higher working capital usually results in:

(a)

higher current ratio, higher risk and higher profits

(b)

lower current ratio, higher risk and profits

(c)

higher equity, lower risk and lower profits

(d)

lower equity, lower risk and higher profits

65.

Higher debt-equity ratio results in:

(a)

lower financial risk

(b)

higher degree of operating risk

(c)

higher degree of financial risk

(d)

higher EPS

66.

Financial leverage is called favourable if:

(a)

Return on Investment is lower than the cost of debt

(b)

ROI is higher than the cost of debt

(c)

Debt is easily available

(d)

If the degree of existing financial leverage is low

67.

Companies with a higher growth pattern are likely to:

(a)

pay lower dividends

(b)

pay higher dividends

(c)

dividends are not affected by growth considerations

(d)

none of the above

68.

Other things remaining the same, an increase in the tax rate on corporate profits will:

(a)

make the debt relatively cheaper

(b)

make the debt relatively the dearer

(c)

have no impact on the cost of debt

(d)

we can’t say

69.

A decision to acquire a new and modern plant to upgrade an old one is known as ____________ decision.

(a)

financing decision

(b)

working capital decision

(c)

Investment decision

(d)

None of the above

70.

The cheapest source of finance is:

(a)

debenture

(b)

equity share capital

(c)

preference share

(d)

retained earning

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Answers Key:

Multiple Choice Question

70 x 1 = 70

(b)
Rs 3 crores

(d)
Providing Suitable incentives

(d)
Positive Deviation

(d)
Controlling is expensive

(a)
To take corrective action

(a)
Qualitative Standards

10.

11.

12.

13.

(b)
Controlling is External Source

14.

(a)
Ahead, Back

15.

16.

(d)
Planning

17.

(b)
Budgets

18.

(b)
Accounting centre

19.

(b)
Management of the company

20.

21.

(d)
All of the above

22.

(d)
NSDL and CDSL

23.

(a)
Dematerialisation of of Securities

24.

25.

26.

27.

(d)
Money Market

28.

(b)
Short term Securities

29.

30.

(a)
Commercial Bill

31.

(a)
Finance the working capital requirements

32.

(d)
Zero Coupon Bonds

33.

(b)
Short term debt

34.

(b)
Less

35.

(b)
Money market

36.

(a)
All of these

37.

(a)
An instrument to borrow short-term funds

38.

(a)
NSDL

39.

(b)
2000

40.

(a)
1992

41.

(b)
T + 3

42.

(d)
23

43.

(b)
Complement each other

44.

45.

(d)
Trading on equity

46.

(d)
Floatation cost

47.

(b)
Enough funds are available at the right time

48.

(d)
Financial Planning

49.

(d)
All of these

50.

(b)
Dividend Decision

51.

(b)
All of these

52.

53.

(b)
All of these

54.

55.

(d)
All of these

56.

(b)
Inventory management

57.

(d)
Working capital

58.

(d)
Capital Budgeting

59.

60.

(a)
a long-term liability

61.

62.

63.

(b)
within one year

64.

65.

(d)
higher EPS

66.

(b)
ROI is higher than the cost of debt

67.

(a)
pay lower dividends

68.

(a)
make the debt relatively cheaper

69.

70.

(d)
retained earning

cbse 12th Standard Business Studies Controlling Important Questions And Answers Study Material - QB365 Set B

QB365 Student Learing Managemnet System

Std: 12th Standard CBSE - Business Studies

chapter: Controlling - Important Questions And Answers

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Questions:

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Answers Key:

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