MORE 100 MCQS Chapter 8: Controlling
CBSE BOARD 2024
1. The managerial function of ensuring that actual activities conform to planned activities is known as:
A) Directing
B) Controlling
C) Planning
D) Coordinating
Correct Answer: B) Controlling.
Board Tip: Controlling acts as the management's steering wheel, keeping the organization on the path laid out by planning.
Board Tip: Controlling acts as the management's steering wheel, keeping the organization on the path laid out by planning.
PREDICTIVE
2. Controlling is fundamentally related to:
A) Creating new organizational structures
B) Issuing orders and instructions
C) Measurement and correction of performance
D) Hiring new employees
Correct Answer: C) Measurement and correction of performance.
COMPETENCY BASED
3. 'Ganga Ltd.' set a target of producing 1,000 units a month. At the end of the month, the production manager checks the logs and finds only 850 units were produced. He then investigates the reasons for this shortfall. Which function of management is he performing?
A) Planning
B) Staffing
C) Directing
D) Controlling
Correct Answer: D) Controlling.
Analysis: Comparing the standard (1,000 units) with actual performance (850 units) and analyzing the deviation is the core of controlling.
Analysis: Comparing the standard (1,000 units) with actual performance (850 units) and analyzing the deviation is the core of controlling.
CBSE BOARD 2023
4. Controlling is considered a pervasive function because:
A) It is done only at the end of the year
B) It is required at all levels of management and in all types of organizations
C) It restricts employee freedom
D) It is only related to financial matters
Correct Answer: B) It is required at all levels of management and in all types of organizations.
ASSERTION-REASON
5. Assertion (A): Controlling is both a backward-looking and a forward-looking function.
Reason (R): It acts like a post-mortem of past activities to find deviations, and uses this information to improve future planning.
Reason (R): It acts like a post-mortem of past activities to find deviations, and uses this information to improve future planning.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
Logic: Looking back at past mistakes (backward) ensures that the same mistakes are not repeated in the future (forward).
Logic: Looking back at past mistakes (backward) ensures that the same mistakes are not repeated in the future (forward).
CBSE SAMPLE PAPER 2025
6. Which function of management ensures that an organization's resources are being used effectively and efficiently for the achievement of predetermined goals?
A) Controlling
B) Organizing
C) Motivation
D) Leadership
Correct Answer: A) Controlling.
TRICKY QUESTION
7. "Controlling is a continuous process." This statement implies that:
A) Managers should only check performance when a major crisis happens
B) It involves a constant review of actual performance against standards
C) It is the last function of management and therefore ends the cycle
D) Once a deviation is corrected, controlling stops forever
Correct Answer: B) It involves a constant review of actual performance against standards.
Board Tip: Management is a cycle. Controlling never truly "ends" because it immediately feeds back into continuous planning.
Board Tip: Management is a cycle. Controlling never truly "ends" because it immediately feeds back into continuous planning.
CASE SCENARIO
8. The sales manager of 'Apex Books' tracks the weekly sales reports and compares them with the quarterly targets. Whenever there is a dip, he immediately guides the sales team to alter their strategy. This highlights that controlling:
A) Is a pervasive function
B) Is goal-oriented
C) Leads to rigidity
D) Reduces employee morale
Correct Answer: B) Is goal-oriented.
Analysis: Every corrective action taken by the manager is specifically aimed at achieving the organizational goal (sales target).
Analysis: Every corrective action taken by the manager is specifically aimed at achieving the organizational goal (sales target).
CBSE BOARD 2022
9. Good controlling systems help managers to verify whether the plans set earlier are accurate and objective. Which importance of controlling is highlighted here?
A) Accomplishing organizational goals
B) Judging accuracy of standards
C) Making efficient use of resources
D) Improving employee motivation
Correct Answer: B) Judging accuracy of standards.
Note: Business environments change. A good control system helps a manager see if the original targets (standards) need to be revised up or down.
Note: Business environments change. A good control system helps a manager see if the original targets (standards) need to be revised up or down.
ASSERTION-REASON
10. Assertion (A): Controlling improves employee motivation.
Reason (R): A good control system ensures that employees know well in advance what they are expected to do and the standards against which their performance will be appraised.
Reason (R): A good control system ensures that employees know well in advance what they are expected to do and the standards against which their performance will be appraised.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
PREDICTIVE
11. By continuously monitoring the workplace and tracking materials, controlling prevents wastage and spoilage. This refers to which importance?
A) Ensuring order and discipline
B) Facilitating coordination in action
C) Making efficient use of resources
D) Judging accuracy of standards
Correct Answer: C) Making efficient use of resources.
CBSE BOARD 2021
12. Controlling creates an atmosphere of ___________ in the organization by keeping a close check on the activities of employees and reducing dishonest behavior.
A) Order and discipline
B) Fear and anxiety
C) Decentralization
D) Creativity and innovation
Correct Answer: A) Order and discipline.
Logic: When employees know their actions are being measured and recorded, it minimizes negative behavior like theft or extreme tardiness.
Logic: When employees know their actions are being measured and recorded, it minimizes negative behavior like theft or extreme tardiness.
COMPETENCY BASED
13. The Production Department wants to manufacture 500 units, but the Purchase Department only buys enough raw material for 300 units. A strong controlling system catches this discrepancy early and aligns both departments. Which importance of controlling is visible here?
A) Improving employee motivation
B) Facilitating coordination in action
C) Judging accuracy of standards
D) Ensuring order and discipline
Correct Answer: B) Facilitating coordination in action.
Analysis: Controlling provides a common thread that binds all departments together so they don't work in isolation.
Analysis: Controlling provides a common thread that binds all departments together so they don't work in isolation.
TRICKY QUESTION
14. Which of the following is an INTERNAL factor that management can control?
A) Changes in Government taxation policies
B) Rising prices of raw materials globally
C) Wastage of materials by employees on the factory floor
D) Technological advancements by a competitor
Correct Answer: C) Wastage of materials by employees on the factory floor.
Board Tip: A major limitation of controlling is that it has *little to no control over external factors* (like A, B, and D).
Board Tip: A major limitation of controlling is that it has *little to no control over external factors* (like A, B, and D).
CBSE BOARD 2024
15. The effectiveness of controlling is severely hampered when standards cannot be defined in:
A) Qualitative terms
B) Quantitative terms
C) Financial terms
D) Long-term objectives
Correct Answer: B) Quantitative terms.
Note: It is very difficult to measure deviations in areas like "employee morale" or "customer satisfaction" because they lack strict numerical (quantitative) values.
Note: It is very difficult to measure deviations in areas like "employee morale" or "customer satisfaction" because they lack strict numerical (quantitative) values.
CASE SCENARIO
16. The management of a logistics company decides to install GPS trackers and CCTV cameras in all delivery vans to monitor the drivers' routes and halt times. The drivers immediately threaten to go on strike, claiming it is an invasion of their privacy. This highlights which limitation of controlling?
A) Little control over external factors
B) Difficulty in setting quantitative standards
C) Resistance from employees
D) Costly affair
Correct Answer: C) Resistance from employees.
Analysis: Employees often resist strong control systems because they feel their freedom is being unfairly restricted.
Analysis: Employees often resist strong control systems because they feel their freedom is being unfairly restricted.
CBSE SAMPLE PAPER 2025
17. Controlling is often considered a "Costly Affair." Why?
A) Because employees demand higher salaries when they are controlled
B) Because setting up CCTVs, hiring auditors, and compiling reports requires a lot of time, effort, and money
C) Because it leads to a loss in sales
D) Because the government taxes controlling systems
Correct Answer: B) Because setting up CCTVs, hiring auditors, and compiling reports requires a lot of time, effort, and money.
ASSERTION-REASON
18. Assertion (A): Small enterprises often struggle to maintain highly detailed control systems.
Reason (R): A control system must justify the expenses incurred on it. Small businesses may find the cost of installing heavy controlling mechanisms outweighs the benefits.
Reason (R): A control system must justify the expenses incurred on it. Small businesses may find the cost of installing heavy controlling mechanisms outweighs the benefits.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
PREDICTIVE
19. Which of the following areas is the hardest to set quantitative standards for?
A) Production (Number of units)
B) Sales (Revenue generated)
C) Finance (Expenditure limits)
D) Human Behavior (Employee motivation levels)
Correct Answer: D) Human Behavior (Employee motivation levels).
COMPETENCY BASED
20. "If you try to control everything, you may end up controlling nothing." This management principle points towards the need for:
A) Complete Autocracy
B) Eliminating planning
C) Focusing on Key Result Areas (Critical Point Control)
D) Removing all performance standards
Correct Answer: C) Focusing on Key Result Areas (Critical Point Control).
Analysis: Managers cannot monitor every tiny detail without wasting massive amounts of time, so they must focus on the most critical deviations.
Analysis: Managers cannot monitor every tiny detail without wasting massive amounts of time, so they must focus on the most critical deviations.
CBSE BOARD 2023
21. An organization aims to increase its profits by 15%. This target serves as a base for the controlling function. This highlights that controlling is:
A) A pervasive function
B) A backward-looking function
C) A goal-oriented process
D) A continuous process
Correct Answer: C) A goal-oriented process.
TRICKY QUESTION
22. Is controlling necessary even if an organization has the most perfect, flawless plan ever created?
A) No, perfect plans execute themselves automatically
B) Yes, because the business environment is dynamic and things can change during execution
C) No, controlling is only for badly run businesses
D) Yes, but only to monitor the lower-level workers
Correct Answer: B) Yes, because the business environment is dynamic and things can change during execution.
CASE SCENARIO
23. A multinational bank ensures that its control systems (audits, software checks) do not cost more than the financial losses they are trying to prevent. The management is being careful about which limitation of controlling?
A) Resistance from employees
B) Little control over external factors
C) Difficulty in setting standards
D) Costly affair
Correct Answer: D) Costly affair.
CBSE BOARD 2021
24. What is the fundamental relationship between Planning and Controlling?
A) They are entirely independent of each other
B) Controlling precedes Planning
C) They are inseparable twins of management
D) Planning is a one-time event, Controlling is continuous
Correct Answer: C) They are inseparable twins of management.
Board Tip: Planning without controlling is meaningless. Controlling without planning is blind.
Board Tip: Planning without controlling is meaningless. Controlling without planning is blind.
FINAL MASTER QUESTION
25. "Planning is looking ahead and controlling is looking back." Is this statement entirely true?
A) Yes, absolutely true without exception.
B) No, because both planning and controlling are only forward-looking.
C) No, because planning is also looking back (at past data) and controlling is also looking ahead (to improve future plans).
D) Yes, because planning happens at the top level and controlling at the bottom.
Correct Answer: C) No, because planning is also looking back (at past data) and controlling is also looking ahead (to improve future plans).
Final Analysis: This is one of the most frequently asked theoretical questions in the board exams. Both functions look both ways!
Final Analysis: This is one of the most frequently asked theoretical questions in the board exams. Both functions look both ways!
CBSE BOARD 2024
26. The controlling process essentially begins with:
A) Measurement of actual performance
B) Taking corrective action
C) Setting performance standards
D) Analyzing deviations
Correct Answer: C) Setting performance standards.
Board Tip: Standards are the benchmarks against which actual performance will be measured. Without a standard, you cannot control anything.
Board Tip: Standards are the benchmarks against which actual performance will be measured. Without a standard, you cannot control anything.
PREDICTIVE
27. Which of the following is an example of a 'Qualitative' standard?
A) Producing 500 units per day
B) Reducing defects to less than 2%
C) Earning a profit of ₹10 Lakhs
D) Improving the goodwill and corporate image of the company
Correct Answer: D) Improving the goodwill and corporate image of the company.
Logic: Qualitative standards cannot be easily measured in exact numbers, whereas quantitative standards (A, B, C) are strictly numerical.
Logic: Qualitative standards cannot be easily measured in exact numbers, whereas quantitative standards (A, B, C) are strictly numerical.
COMPETENCY BASED
28. A manager decides to evaluate the performance of his sales team. To ensure the evaluation is accurate and reliable, he must measure the actual performance in:
A) Only financial terms
B) The exact same units in which the standards were set
C) Terms of hours worked
D) A completely different unit to avoid bias
Correct Answer: B) The exact same units in which the standards were set.
Analysis: If the standard is set in "number of boxes sold," the actual performance must also be measured in "number of boxes sold" to make comparison possible.
Analysis: If the standard is set in "number of boxes sold," the actual performance must also be measured in "number of boxes sold" to make comparison possible.
CBSE BOARD 2023
29. Which step of the controlling process determines the difference between actual performance and the established standards?
A) Setting performance standards
B) Measurement of actual performance
C) Comparing actual performance with standards
D) Taking corrective action
Correct Answer: C) Comparing actual performance with standards.
ASSERTION-REASON
30. Assertion (A): Measurement of actual performance should ideally be done after the task is completely finished.
Reason (R): Measuring performance while the task is ongoing (e.g., assembling a car) allows managers to spot and fix errors before the final product is ruined.
Reason (R): Measuring performance while the task is ongoing (e.g., assembling a car) allows managers to spot and fix errors before the final product is ruined.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: D) (A) is false, but (R) is true.
Logic: Measurement should be done *during* the performance whenever possible, so that defects can be caught early, not just at the end.
Logic: Measurement should be done *during* the performance whenever possible, so that defects can be caught early, not just at the end.
CASE SCENARIO
31. A quality control inspector randomly picks 5 smartphones out of a batch of 1,000 to check for defects. This method of 'Measurement of Actual Performance' is known as:
A) Personal Observation
B) Sample Checking
C) Performance Reports
D) Accounting Ratios
Correct Answer: B) Sample Checking.
Analysis: In large-scale production, checking every single unit is impossible, so managers check a random sample.
Analysis: In large-scale production, checking every single unit is impossible, so managers check a random sample.
CBSE SAMPLE PAPER 2025
32. The concept which suggests that a manager should focus only on "Key Result Areas" (KRAs) which are critical to the success of an organization is known as:
A) Management by Exception (MBE)
B) Critical Point Control (CPC)
C) Standard Costing
D) Budgetary Control
Correct Answer: B) Critical Point Control (CPC).
Board Tip: CPC focuses on the *areas* you monitor (the KRAs). It is neither economical nor easy to keep a check on each and every activity in an organization.
Board Tip: CPC focuses on the *areas* you monitor (the KRAs). It is neither economical nor easy to keep a check on each and every activity in an organization.
TRICKY QUESTION
33. "An attempt to control everything results in controlling nothing." This statement is the underlying principle of:
A) Planning
B) Division of Work
C) Management by Exception (MBE)
D) Centralization
Correct Answer: C) Management by Exception (MBE).
Logic: MBE dictates that only significant deviations which go beyond the acceptable range should be brought to the notice of top management.
Logic: MBE dictates that only significant deviations which go beyond the acceptable range should be brought to the notice of top management.
CBSE BOARD 2022
34. If the cost of postal stamps increases by 15%, the manager ignores it. But if the cost of raw materials increases by 5%, the manager takes immediate action. This is an application of:
A) Critical Point Control (CPC)
B) Management by Exception (MBE)
C) Taking Corrective Action
D) Setting Standards
Correct Answer: A) Critical Point Control (CPC).
Note: Raw materials are a Key Result Area (KRA) because they heavily impact production costs. Postal stamps are a minor area.
Note: Raw materials are a Key Result Area (KRA) because they heavily impact production costs. Postal stamps are a minor area.
COMPETENCY BASED
35. A factory allows a maximum wastage of 2% in its production line. This month, the wastage was 1.5%. According to the principle of Management by Exception, what should the top manager do?
A) Fire the workers immediately
B) Completely halt production
C) Do nothing and ignore the deviation, as it is within the acceptable range
D) Revise the standard to 0% wastage
Correct Answer: C) Do nothing and ignore the deviation, as it is within the acceptable range.
Analysis: Since 1.5% is below the 2% threshold, it is an acceptable deviation. Top management should not waste their time on it.
Analysis: Since 1.5% is below the 2% threshold, it is an acceptable deviation. Top management should not waste their time on it.
CBSE BOARD 2021
36. What is the primary purpose of 'Analyzing Deviations'?
A) To fire underperforming employees
B) To find out the exact *causes* behind the difference between actual and planned performance
C) To set new plans for the next year
D) To calculate the company's profit
Correct Answer: B) To find out the exact *causes* behind the difference between actual and planned performance.
ASSERTION-REASON
37. Assertion (A): When actual performance perfectly matches the planned standards, the controlling process ends there for that cycle.
Reason (R): Taking corrective action is only necessary when there are negative deviations that cross the acceptable limit.
Reason (R): Taking corrective action is only necessary when there are negative deviations that cross the acceptable limit.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
Logic: You don't need to 'correct' something that is already working perfectly as planned.
Logic: You don't need to 'correct' something that is already working perfectly as planned.
PREDICTIVE
38. Sometimes, deviations are caused not by poor worker performance, but because the original targets set by management were unrealistically high. In such a case, what is the required corrective action?
A) Training the workers
B) Repairing machinery
C) Revising the standards downwards
D) Upgrading technology
Correct Answer: C) Revising the standards downwards.
Note: If the standard itself is faulty, the corrective action is to fix the plan (downward revision of standards).
Note: If the standard itself is faulty, the corrective action is to fix the plan (downward revision of standards).
CASE SCENARIO
39. A garment factory set a target to produce 1,000 shirts. They only produced 800. Upon analysis, the manager found that there were frequent power cuts in the city. The corrective action taken was to install a heavy-duty generator. This represents which step of controlling?
A) Setting performance standards
B) Comparing actual performance
C) Analyzing deviations
D) Taking corrective action
Correct Answer: D) Taking corrective action.
CBSE BOARD 2024
40. Which of the following highlights the primary difference between Critical Point Control (CPC) and Management by Exception (MBE)?
A) CPC focuses on the 'Areas' to monitor; MBE focuses on the 'Size' of the deviation.
B) CPC focuses on the 'Size' of the deviation; MBE focuses on the 'Areas' to monitor.
C) CPC is used by lower management; MBE is used by top management.
D) There is no difference; they are exactly the same concept.
Correct Answer: A) CPC focuses on the 'Areas' to monitor; MBE focuses on the 'Size' of the deviation.
Board Tip: This is a golden rule! CPC says "Watch the raw materials, not the paperclips." MBE says "Watch if the raw materials drop by 10%, but ignore a 1% drop."
Board Tip: This is a golden rule! CPC says "Watch the raw materials, not the paperclips." MBE says "Watch if the raw materials drop by 10%, but ignore a 1% drop."
TRICKY QUESTION
41. Why are qualitative standards generally harder to control than quantitative standards?
A) Because they cost more money
B) Because they do not require any planning
C) Because they cannot be measured precisely and compared objectively
D) Because employees always resist them
Correct Answer: C) Because they cannot be measured precisely and compared objectively.
CBSE SAMPLE PAPER 2025
42. "Planning is prescriptive whereas, Controlling is ___________."
A) Descriptive
B) Evaluative
C) Preventive
D) Pervasive
Correct Answer: B) Evaluative.
Note: Planning prescribes what *should* be done. Controlling evaluates what *has* been done.
Note: Planning prescribes what *should* be done. Controlling evaluates what *has* been done.
COMPETENCY BASED
43. During the 'Comparing Actual Performance with Standards' step, a manager finds a positive deviation (Actual > Standard). For example, target was 100 units, but workers produced 120 units. What should the manager's action be?
A) Take corrective action to reduce production
B) Fire the workers for not following the plan
C) Analyze if the standard was set too low, and perhaps revise the standard upward for the future
D) Stop the controlling process completely
Correct Answer: C) Analyze if the standard was set too low, and perhaps revise the standard upward for the future.
CBSE BOARD 2023
44. A deviation in the cost of which of the following is most critical for a manufacturing company?
A) Stationery
B) Canteen expenses
C) Labor and Raw Materials
D) Cleaning supplies
Correct Answer: C) Labor and Raw Materials.
Logic: This is an application of Critical Point Control (CPC). Labor and materials are Key Result Areas.
Logic: This is an application of Critical Point Control (CPC). Labor and materials are Key Result Areas.
ASSERTION-REASON
45. Assertion (A): It is important to find the exact cause of a deviation before taking corrective action.
Reason (R): Treating the symptom rather than the root cause will result in the problem occurring again in the future.
Reason (R): Treating the symptom rather than the root cause will result in the problem occurring again in the future.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
PREDICTIVE
46. If the deviation is caused by defective machinery, the appropriate corrective action is:
A) Provide training to the workers
B) Revise the standard upwards
C) Repair or replace the machinery
D) Modify the raw material supply
Correct Answer: C) Repair or replace the machinery.
CASE SCENARIO
47. The HR manager decides to evaluate employee morale, which is a qualitative standard. To measure this, what indirect metrics could the manager look at?
A) Number of units produced per day
B) Rates of absenteeism and labor turnover (quitting)
C) Amount of electricity used by the factory
D) The cost of raw materials
Correct Answer: B) Rates of absenteeism and labor turnover (quitting).
Analysis: Since you cannot put a number directly on "morale," you measure it indirectly. High quitting rates usually indicate low morale.
Analysis: Since you cannot put a number directly on "morale," you measure it indirectly. High quitting rates usually indicate low morale.
CBSE BOARD 2021
48. The last and final step in the controlling process is:
A) Analyzing deviations
B) Comparing actual performance with standards
C) Taking corrective action
D) Setting performance standards
Correct Answer: C) Taking corrective action.
TRICKY QUESTION
49. Which of the following signifies that the Controlling process has successfully completed a full loop and returned to the Planning function?
A) Measurement of actual performance
B) Management by Exception
C) A revision of the original standards/plans based on corrective action
D) Analyzing deviations
Correct Answer: C) A revision of the original standards/plans based on corrective action.
Board Tip: This is the exact moment controlling feeds back into planning, creating the continuous loop of management.
Board Tip: This is the exact moment controlling feeds back into planning, creating the continuous loop of management.
FINAL MASTER QUESTION
50. Arrange the steps of the Controlling Process in their exact chronological order:
(i) Taking Corrective Action
(ii) Comparing actual performance with standards
(iii) Measurement of actual performance
(iv) Setting performance standards
(v) Analyzing deviations
(i) Taking Corrective Action
(ii) Comparing actual performance with standards
(iii) Measurement of actual performance
(iv) Setting performance standards
(v) Analyzing deviations
A) (iv), (iii), (ii), (v), (i)
B) (iv), (ii), (iii), (v), (i)
C) (iii), (iv), (ii), (v), (i)
D) (iv), (iii), (v), (ii), (i)
Correct Answer: A) (iv), (iii), (ii), (v), (i).
Final Analysis: Memorize this sequence! Set standard -> Measure reality -> Compare them -> Find the causes (Analyze) -> Fix the problem (Corrective Action).
Final Analysis: Memorize this sequence! Set standard -> Measure reality -> Compare them -> Find the causes (Analyze) -> Fix the problem (Corrective Action).
CBSE BOARD 2024
51. "Planning without controlling is meaningless and controlling without planning is blind." This statement highlights that:
A) Planning and controlling are completely independent
B) Planning and controlling are inseparable twins of management
C) Controlling replaces planning
D) Planning is a substitute for controlling
Correct Answer: B) Planning and controlling are inseparable twins of management.
Board Tip: They are closely interrelated. Plans provide the standards for controlling, and controlling provides feedback for future planning.
Board Tip: They are closely interrelated. Plans provide the standards for controlling, and controlling provides feedback for future planning.
PREDICTIVE
52. Which of the following is a 'Traditional' technique of managerial control?
A) Return on Investment (ROI)
B) PERT and CPM
C) Personal Observation
D) Management Audit
Correct Answer: C) Personal Observation.
Logic: Traditional techniques (like personal observation, statistical reports, break-even analysis, and budgetary control) have been used for a long time. The others are modern techniques.
Logic: Traditional techniques (like personal observation, statistical reports, break-even analysis, and budgetary control) have been used for a long time. The others are modern techniques.
COMPETENCY BASED
53. The finance manager of 'Alpha Ltd.' is analyzing the exact point where the company's total revenue equals its total costs, meaning there is no profit and no loss. Which control technique is he using?
A) Ratio Analysis
B) Break-Even Analysis
C) Budgetary Control
D) Management Information System
Correct Answer: B) Break-Even Analysis.
Analysis: The break-even point is the level of sales at which total costs equal total revenues. It helps managers determine the minimum sales required to avoid losses.
Analysis: The break-even point is the level of sales at which total costs equal total revenues. It helps managers determine the minimum sales required to avoid losses.
CBSE BOARD 2023
54. A technique of managerial control in which all operations are planned in advance in the form of numerical statements (financial terms) and actual results are compared with these statements is known as:
A) Break-Even Analysis
B) Budgetary Control
C) Responsibility Accounting
D) Ratio Analysis
Correct Answer: B) Budgetary Control.
ASSERTION-REASON
55. Assertion (A): Controlling is essentially a backward-looking function.
Reason (R): Controlling involves analyzing past activities to find out deviations from the established standards.
Reason (R): Controlling involves analyzing past activities to find out deviations from the established standards.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
Logic: While controlling is *also* forward-looking (to improve future plans), the act of measuring deviations relies entirely on looking back at what has already occurred.
Logic: While controlling is *also* forward-looking (to improve future plans), the act of measuring deviations relies entirely on looking back at what has already occurred.
CBSE SAMPLE PAPER 2025
56. Which modern technique of control measures the overall performance of an organization by evaluating whether the capital invested has been utilized effectively to generate reasonable profits?
A) Management Audit
B) PERT and CPM
C) Return on Investment (ROI)
D) Statistical Reports
Correct Answer: C) Return on Investment (ROI).
Board Tip: ROI = (Net Income / Total Investment) x 100. It is the ultimate test of how well top management is using the company's capital.
Board Tip: ROI = (Net Income / Total Investment) x 100. It is the ultimate test of how well top management is using the company's capital.
TRICKY QUESTION
57. Which technique is most suitable for controlling the time and cost involved in massive, complex projects like constructing a bridge or building a ship?
A) Budgetary Control
B) PERT and CPM
C) Responsibility Accounting
D) Ratio Analysis
Correct Answer: B) PERT and CPM.
Note: Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are network techniques used exclusively for planning, scheduling, and controlling complex projects.
Note: Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are network techniques used exclusively for planning, scheduling, and controlling complex projects.
CASE SCENARIO
58. The Board of Directors of a company orders a systematic and independent appraisal of the overall performance of the management team. The goal is to identify managerial deficiencies and improve efficiency. This technique is known as:
A) Financial Audit
B) Management Audit
C) Internal Check
D) Responsibility Accounting
Correct Answer: B) Management Audit.
Analysis: Unlike a financial audit (which checks accounting records), a management audit checks the efficiency and effectiveness of the management process itself.
Analysis: Unlike a financial audit (which checks accounting records), a management audit checks the efficiency and effectiveness of the management process itself.
CBSE BOARD 2022
59. Under 'Responsibility Accounting', an organization is divided into different departments or divisions, which are then treated as:
A) Revenue Centers
B) Responsibility Centers
C) Investment Centers
D) Profit Centers
Correct Answer: B) Responsibility Centers.
Note: The head of each center (like a Cost Center, Profit Center, or Investment Center) is made directly responsible for the targets of that specific center.
Note: The head of each center (like a Cost Center, Profit Center, or Investment Center) is made directly responsible for the targets of that specific center.
COMPETENCY BASED
60. In a manufacturing plant, the machining department is only responsible for the expenses incurred during the production process, and has no control over sales or revenue. Under responsibility accounting, this department is classified as a:
A) Profit Center
B) Revenue Center
C) Investment Center
D) Cost Center
Correct Answer: D) Cost Center.
Analysis: A cost center manager is held accountable only for the costs (expenses) incurred, not for revenue generation.
Analysis: A cost center manager is held accountable only for the costs (expenses) incurred, not for revenue generation.
CBSE BOARD 2021
61. The current ratio and quick ratio are calculated by top management to judge the short-term financial position of the business. Which controlling technique is this?
A) Budgetary Control
B) Return on Investment
C) Ratio Analysis
D) Management Information System
Correct Answer: C) Ratio Analysis.
Logic: Analyzing financial statements by computing various ratios (Liquidity, Solvency, Profitability, Turnover) to measure performance.
Logic: Analyzing financial statements by computing various ratios (Liquidity, Solvency, Profitability, Turnover) to measure performance.
ASSERTION-REASON
62. Assertion (A): A budget acts as both a planning and a controlling device.
Reason (R): A budget lays down the plan in quantitative terms and simultaneously serves as the standard against which actual performance is measured.
Reason (R): A budget lays down the plan in quantitative terms and simultaneously serves as the standard against which actual performance is measured.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
PREDICTIVE
63. A computer-based system that provides accurate, timely, and relevant information to managers to help them make effective decisions and exercise control is called:
A) PERT
B) Management Information System (MIS)
C) Responsibility Accounting
D) Management Audit
Correct Answer: B) Management Information System (MIS).
CASE SCENARIO
64. A manager prefers to physically walk around the factory floor every two hours to watch the workers, check the machines, and ensure everything is running smoothly. This traditional technique of control is:
A) Personal Observation
B) Management Audit
C) Break-even Analysis
D) Statistical Reports
Correct Answer: A) Personal Observation.
Analysis: This creates a psychological pressure on employees to perform well, though it is highly time-consuming for the manager.
Analysis: This creates a psychological pressure on employees to perform well, though it is highly time-consuming for the manager.
CBSE BOARD 2024
65. Which of the following statements perfectly describes the relationship between Planning and Controlling?
A) Planning is the first function, Controlling is the second.
B) Planning evaluates performance, Controlling prescribes action.
C) Planning is looking back, Controlling is looking ahead.
D) Planning provides the base for Controlling, and Controlling improves future Planning.
Correct Answer: D) Planning provides the base for Controlling, and Controlling improves future Planning.
TRICKY QUESTION
66. A department whose manager is held responsible for both revenues generated AND costs incurred is known as a:
A) Cost Center
B) Investment Center
C) Revenue Center
D) Profit Center
Correct Answer: D) Profit Center.
Logic: Profit = Revenue - Costs. Since the manager oversees both, it is a profit center.
Logic: Profit = Revenue - Costs. Since the manager oversees both, it is a profit center.
CBSE SAMPLE PAPER 2025
67. The critical path in CPM (Critical Path Method) refers to:
A) The shortest path to complete a project
B) The longest path in the network which determines the minimum time required to complete the project
C) The path with the lowest cost
D) The path that requires the most labor
Correct Answer: B) The longest path in the network which determines the minimum time required to complete the project.
Board Tip: Any delay on the 'critical path' will delay the entire project.
Board Tip: Any delay on the 'critical path' will delay the entire project.
COMPETENCY BASED
68. A company calculates its 'Debt-Equity Ratio' to check if it has taken on too much external loan compared to the owner's capital. This ratio falls under which category of Ratio Analysis?
A) Liquidity Ratios
B) Solvency Ratios
C) Profitability Ratios
D) Turnover Ratios
Correct Answer: B) Solvency Ratios.
Analysis: Solvency ratios measure the long-term financial health and ability of the business to pay its long-term debts.
Analysis: Solvency ratios measure the long-term financial health and ability of the business to pay its long-term debts.
CBSE BOARD 2023
69. Which of the following is an essential requirement for an effective Budgetary Control system?
A) Estimates should be rigidly fixed and unchangeable
B) Top management support and participation
C) Budgets should only be prepared for the finance department
D) It should be kept secret from lower-level managers
Correct Answer: B) Top management support and participation.
Note: Without the commitment of top executives, budgets will not be taken seriously by the rest of the organization.
Note: Without the commitment of top executives, budgets will not be taken seriously by the rest of the organization.
ASSERTION-REASON
70. Assertion (A): MIS (Management Information System) improves the quality of managerial decision-making.
Reason (R): MIS collects, processes, and provides massive amounts of relevant data to managers at the right time, reducing reliance on guesswork.
Reason (R): MIS collects, processes, and provides massive amounts of relevant data to managers at the right time, reducing reliance on guesswork.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
TRICKY QUESTION
71. While Planning is an intellectual process involving thinking and analysis, Controlling is:
A) Also purely an intellectual process
B) A theoretical process
C) An executive/action-oriented process
D) An informal process
Correct Answer: C) An executive/action-oriented process.
Logic: Controlling requires the manager to physically measure performance and take direct executive action to fix errors.
Logic: Controlling requires the manager to physically measure performance and take direct executive action to fix errors.
CASE SCENARIO
72. Presenting organizational performance in the form of bar graphs, pie charts, and percentages so that top management can grasp the trends at a glance is an example of which traditional controlling technique?
A) Management Audit
B) Statistical Reports
C) PERT
D) Break-Even Analysis
Correct Answer: B) Statistical Reports.
Analysis: Data presented visually as averages, percentages, and charts helps managers quickly identify performance trends.
Analysis: Data presented visually as averages, percentages, and charts helps managers quickly identify performance trends.
CBSE BOARD 2021
73. A department whose manager is held responsible for the return on the capital invested in his department is termed as a/an:
A) Cost Center
B) Revenue Center
C) Investment Center
D) Profit Center
Correct Answer: C) Investment Center.
PREDICTIVE
74. Which of the following statements is INCORRECT regarding the relationship between Planning and Controlling?
A) Planning is the basis of controlling
B) Controlling ensures that plans are implemented correctly
C) Planning can substitute for controlling if done perfectly
D) Controlling provides valuable information for future planning
Correct Answer: C) Planning can substitute for controlling if done perfectly.
Board Tip: They cannot substitute each other. Even the most perfect plan requires controlling to monitor dynamic environmental changes.
Board Tip: They cannot substitute each other. Even the most perfect plan requires controlling to monitor dynamic environmental changes.
FINAL MASTER QUESTION
75. Categorize the following Control Techniques correctly:
(i) Budgetary Control
(ii) Return on Investment (ROI)
(iii) Personal Observation
(iv) Management Information System (MIS)
(i) Budgetary Control
(ii) Return on Investment (ROI)
(iii) Personal Observation
(iv) Management Information System (MIS)
A) (i) & (ii) are Traditional; (iii) & (iv) are Modern
B) (i) & (iii) are Traditional; (ii) & (iv) are Modern
C) (ii) & (iii) are Traditional; (i) & (iv) are Modern
D) (iii) & (iv) are Traditional; (i) & (ii) are Modern
Correct Answer: B) (i) & (iii) are Traditional; (ii) & (iv) are Modern.
Final Analysis: Memorizing which techniques are Traditional vs. Modern is highly tested in 1-mark identification questions.
Final Analysis: Memorizing which techniques are Traditional vs. Modern is highly tested in 1-mark identification questions.
CBSE BOARD 2024
76. Which controlling technique evaluates the effectiveness of the entire management team rather than just the financial records?
A) Financial Audit
B) Management Audit
C) Budgetary Control
D) Ratio Analysis
Correct Answer: B) Management Audit.
Board Tip: Management audit is a comprehensive and constructive review of the performance of the management process itself.
Board Tip: Management audit is a comprehensive and constructive review of the performance of the management process itself.
PREDICTIVE
77. If a manager strictly follows 'Management by Exception' (MBE), they will:
A) Investigate every single deviation, no matter how small
B) Delegate the controlling function entirely to subordinates
C) Only intervene when a deviation crosses the pre-determined acceptable limit
D) Ignore all deviations to save time
Correct Answer: C) Only intervene when a deviation crosses the pre-determined acceptable limit.
COMPETENCY BASED
78. 'Sunrise Electronics' set a standard of 2% defective items. During a monthly check, the defect rate was found to be 1.8%. Simultaneously, the cost of imported microchips (a key raw material) rose by 10%. What should the top management focus on?
A) The defect rate, as it involves product quality
B) Neither of them, as both are out of their control
C) The rise in microchip costs, ignoring the defect rate
D) Both equally
Correct Answer: C) The rise in microchip costs, ignoring the defect rate.
Analysis: The defect rate (1.8%) is within the acceptable limit of 2% (MBE). However, the cost of raw materials is a Key Result Area (CPC) and a 10% rise is a major deviation requiring immediate attention.
Analysis: The defect rate (1.8%) is within the acceptable limit of 2% (MBE). However, the cost of raw materials is a Key Result Area (CPC) and a 10% rise is a major deviation requiring immediate attention.
CBSE BOARD 2023
79. Controlling provides feedback to:
A) Only the lower-level workers
B) The Planning process to improve future plans
C) The external auditors
D) The government regulators
Correct Answer: B) The Planning process to improve future plans.
Note: Controlling acts as a feedback loop. Mistakes caught today are used to make better plans tomorrow.
Note: Controlling acts as a feedback loop. Mistakes caught today are used to make better plans tomorrow.
ASSERTION-REASON
80. Assertion (A): It is generally easier to fix responsibility for poor performance in a Divisional structure than in a Functional structure.
Reason (R): In a divisional structure, each product division operates as a distinct 'Profit Center' under Responsibility Accounting.
Reason (R): In a divisional structure, each product division operates as a distinct 'Profit Center' under Responsibility Accounting.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
CBSE SAMPLE PAPER 2025
81. When comparing actual performance with standards, a deviation can be:
A) Positive only
B) Negative only
C) Zero
D) Positive, Negative, or Zero
Correct Answer: D) Positive, Negative, or Zero.
Logic: Performance can exceed standards (Positive), fall short (Negative), or exactly match them (Zero).
Logic: Performance can exceed standards (Positive), fall short (Negative), or exactly match them (Zero).
TRICKY QUESTION
82. If the deviation is POSITIVE (e.g., workers produced 150 units instead of the planned 100 units), what should the management do?
A) Nothing, positive deviations are always good
B) Stop production immediately
C) Analyze if the original standard was set too low and revise it upwards for the future
D) Punish the workers for not following the exact plan
Correct Answer: C) Analyze if the original standard was set too low and revise it upwards for the future.
CASE SCENARIO
83. The HR Manager notes that the labor turnover (employee quitting rate) has suddenly spiked to 15% from the usual 3%. Before taking any corrective action, she interviews the departing employees to understand why they are leaving. She is currently performing which step of controlling?
A) Measurement of performance
B) Taking corrective action
C) Analyzing deviations
D) Setting standards
Correct Answer: C) Analyzing deviations.
Analysis: Finding out the "why" behind the deviation is the core of the analysis phase.
Analysis: Finding out the "why" behind the deviation is the core of the analysis phase.
CBSE BOARD 2022
84. Which of the following is a limitation of the Controlling function?
A) It helps in judging accuracy of standards
B) It ensures order and discipline
C) It faces resistance from employees who feel their freedom is restricted
D) It facilitates coordination
Correct Answer: C) It faces resistance from employees who feel their freedom is restricted.
COMPETENCY BASED
85. If a manager tries to implement strict controls over external macroeconomic factors (like inflation or changing government tax laws), the controlling process will likely:
A) Succeed perfectly
B) Fail, because an enterprise has little or no control over external factors
C) Result in high employee motivation
D) Lead to better planning
Correct Answer: B) Fail, because an enterprise has little or no control over external factors.
CBSE BOARD 2021
86. Controlling is known as an 'Action-oriented' process because:
A) It involves lots of meetings
B) It only points out mistakes without doing anything
C) Finding deviations is useless unless corrective action is taken to fix them
D) It is purely a mental exercise
Correct Answer: C) Finding deviations is useless unless corrective action is taken to fix them.
Board Tip: The whole point of control is to actually *fix* the problem, which requires direct action.
Board Tip: The whole point of control is to actually *fix* the problem, which requires direct action.
TRICKY QUESTION
87. A standard must be:
A) Highly rigid and unchangeable
B) Unrealistic to push workers harder
C) Flexible enough to be modified if the business environment changes
D) Set only in qualitative terms
Correct Answer: C) Flexible enough to be modified if the business environment changes.
ASSERTION-REASON
88. Assertion (A): Controlling is blind without Planning.
Reason (R): Planning provides the standard or benchmark against which actual performance is measured.
Reason (R): Planning provides the standard or benchmark against which actual performance is measured.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: A) Both (A) and (R) are true and (R) is the correct explanation.
CBSE BOARD 2024
89. Which of the following highlights the concept that "Controlling is looking forward"?
A) It measures past performance
B) It finds out who made a mistake yesterday
C) It suggests corrective actions to improve future performance and revises future plans
D) It records past data in statistical reports
Correct Answer: C) It suggests corrective actions to improve future performance and revises future plans.
CASE SCENARIO
90. A company prepares a master financial plan showing the expected cash inflows and outflows for the upcoming quarter. At the end of each month, the actual cash position is compared with this plan. This is an application of:
A) Return on Investment
B) Budgetary Control
C) Management Audit
D) PERT
Correct Answer: B) Budgetary Control.
Analysis: Using budgets (financial plans) as the standard for control is the definition of Budgetary Control.
Analysis: Using budgets (financial plans) as the standard for control is the definition of Budgetary Control.
PREDICTIVE
91. If the cause of a deviation is that workers are unfamiliar with a newly installed software, what should the corrective action be?
A) Change the software
B) Fire the workers
C) Provide necessary training to the workers
D) Revise the standard downwards indefinitely
Correct Answer: C) Provide necessary training to the workers.
CBSE SAMPLE PAPER 2025
92. The success of a controlling system depends heavily on how quickly the information regarding a deviation reaches the manager. This highlights the importance of:
A) Autocratic Leadership
B) Management Information System (MIS)
C) Ratio Analysis
D) Break-Even Analysis
Correct Answer: B) Management Information System (MIS).
Note: An effective MIS provides timely, accurate data, allowing managers to act quickly before small deviations become disasters.
Note: An effective MIS provides timely, accurate data, allowing managers to act quickly before small deviations become disasters.
COMPETENCY BASED
93. "The controlling process is exactly the same for a multi-million dollar corporation as it is for a small local bakery." Why is this statement true?
A) Because both use the exact same software
B) Because controlling is a pervasive function that applies universally to all organizations at all levels
C) Because both make the same amount of profit
D) Because the external environment affects both identically
Correct Answer: B) Because controlling is a pervasive function that applies universally to all organizations at all levels.
CBSE BOARD 2023
94. In the context of taking corrective action, when should management step in and modify the original plan itself?
A) Whenever there is any small deviation
B) Never; plans are sacred and cannot be changed
C) When the deviation cannot be corrected because the original standard was set unrealistically high or low
D) Only when requested by the workers
Correct Answer: C) When the deviation cannot be corrected because the original standard was set unrealistically high or low.
ASSERTION-REASON
95. Assertion (A): Ratio analysis is a modern technique of managerial control.
Reason (R): It involves calculating metrics like Liquidity and Solvency to check financial health.
Reason (R): It involves calculating metrics like Liquidity and Solvency to check financial health.
A) Both (A) and (R) are true and (R) is the correct explanation.
B) Both (A) and (R) are true but (R) is NOT the explanation.
C) (A) is true, but (R) is false.
D) (A) is false, but (R) is true.
Correct Answer: D) (A) is false, but (R) is true.
Logic: Ratio Analysis is a *Traditional* technique of control, not a modern one.
Logic: Ratio Analysis is a *Traditional* technique of control, not a modern one.
TRICKY QUESTION
96. If 'Planning' creates the blueprint of the house, 'Controlling' ensures that:
A) The blueprint is destroyed
B) The house is built exactly according to that blueprint
C) People move into the house
D) The house is painted
Correct Answer: B) The house is built exactly according to that blueprint.
CASE SCENARIO
97. A manager realizes that checking every single bottle of juice produced on the assembly line is physically impossible. He decides to check only every 100th bottle. This strategy is an application of:
A) Management by Exception
B) Personal Observation
C) Sample Checking (Measurement of Performance)
D) Revising standards
Correct Answer: C) Sample Checking (Measurement of Performance).
CBSE BOARD 2021
98. Controlling ensures that work is done as per the:
A) Demands of the trade union
B) Pre-determined plans and standards
C) Desires of the competitors
D) Convenience of the workers
Correct Answer: B) Pre-determined plans and standards.
PREDICTIVE
99. Which of the following is NOT an importance of controlling?
A) Accomplishing organizational goals
B) Improving employee motivation
C) Restricting employee creativity
D) Ensuring order and discipline
Correct Answer: C) Restricting employee creativity.
FINAL MASTER QUESTION
100. Combine the correct Management Principle with its explanation:
(i) Critical Point Control (CPC)
(ii) Management by Exception (MBE)
With:
(a) Ignore minor deviations, report only major ones to top management.
(b) Focus on Key Result Areas (KRAs) that impact the whole organization.
(i) Critical Point Control (CPC)
(ii) Management by Exception (MBE)
With:
(a) Ignore minor deviations, report only major ones to top management.
(b) Focus on Key Result Areas (KRAs) that impact the whole organization.
A) (i)-(b) and (ii)-(a)
B) (i)-(a) and (ii)-(b)
C) Both (i) and (ii) map to (a)
D) Both (i) and (ii) map to (b)
Correct Answer: A) (i)-(b) and (ii)-(a).
Final Analysis: This distinction is the most important concept in the entire Controlling chapter. Keep them straight to easily score marks in HOTS questions.
Final Analysis: This distinction is the most important concept in the entire Controlling chapter. Keep them straight to easily score marks in HOTS questions.
🏆
Chapter 8 Mastered!
Exceptional! You have successfully completed all 100 MCQs for Controlling.
You now have a solid command over the entire Part A (Principles and Functions of Management) of your syllabus!
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