CHAPTER 1 INTRODUCTION TO BUSINESS & BCK

Questions of December 2012

1. __________ is a feature of partnership form of business.
(a) Separate legal entity from the firm
(b) Limited scope for raising finance
(c) The liability of a partner is limited to his contribution to capital
(d) Registration of partnership is compulsory
2. __________ form of business is/are appropriate for retail business.
(a) Sole proprietorship (b) Partnership
(c) Company (d) Both (a) and (b)
3. Which one of the following does not have perpetual succession?
(a) Company (b) Statutory Corporation
(c) Sole Proprietorship (d) Co-operative Society
4. In a Hindu Undivided Family, liability of __________ is unlimited.
(a) Karta (b) Co-parceners
(c) Both a and b (d) Neither a and b
5. In relation to business organisation structure, which one of the following is easy to form
and wind up?
(a) A company (b) A sole proprietorship
(c) Statutory corporation (d) Public enterprises.
6. Which is not a feature of LLP?
(a) Separate legal entity
(b) All LLP have existence for fixed period.
(c) Partners in an LLP are required to turn into an agreement
(d) In an LLP, partners are not liable for the act of other partners.
7. Voting right that vests with each member of co-operative society is:
(a) One member one vote
(b) Right to vote in proportion of capital contributed
(c) Right to vote as mentioned in memorandum
(d) None of the above.
8. Gas Authority of India Limited is an example of:
(a) Limited liability partnership (b) Private limited company (c) Public enterprise (d) None of
the above.
Solutions of December 2012
1. (b) Following are the essential features of a partnership form of business:
(i) Can be started by minimum'2 persons.
(ii) Can have maximum 10/20 persons.
(iii) Scope for raising finance is limited.
(iv) Formed for earning profit
(v) Liability of all partners is unlimited.
(vi) Registration is voluntary.
(vii) There exist a principal-agent relationship.
Thus, among the given options "limited scope for raising finance" is a feature of
partnership form of business.
2. (d) Business providing direct services like retail business should be set up as sole
proprietor; businesses requiring pooling of skills and funds should be set up as partnership,
while manufacturing concerns of large size should be set up as companies.
Thus, both sole proprietorship and partnership form of business are appropriate for retail
business.
3. (c) Perpetual succession means that the death / insolvency of any member of a concern
does not affects its continuity.
Thus, its legal entity is separate from its members.
All except sole proprietorship are formed like a corporate form of organisation and thus,
have perpetual succession.
4. (a) In HUF, liability of all the co-partners is limited except Karta, thus, enabling more
efficient management.
Thus, the liability of Karta is unlimited.
5. (b) One of the advantages of sole proprietorship form of business is that no legal
formalities are required for its formation. It can be started with a small amount of capital.
Similarly, its winding up also is completely dependant upon sole proprietor.
Thus, sole proprietorship form of business have easy formation and winding up.
6. (b) Following are the features of a limited liability partnership:
(i) Body corporate.
(ii) Separate Legal Entity.
(iii) Perpetual Succession.
(iv) Easy formation.
(v) Flexible operations.
(vi) No minimum capital contribution.
(vii) Easy dissolution.
(viii) Low cost of formation.
(ix) No partner liable for other partner's act.
(x) No restriction on maximum number of partners.
(xi) Mutual rights and duties of partners are governed by an LLP agreement.
Thus, among the given options, option B i.e. "All LLP have existence for fixed period" is not a
feature of LLP.
7. (a) Co-operative societies have a democratic management i.e. every member have equal
voting rights or one member have one vote, thus having equal voice in the management.
8. (c) Public enterprises refers to business organisation owned, managed and controlled by
local, central or State Government. Whole or most of the investment is made by government
itself.
Example: Gas Authority of India Limited, Hindustan Machine Tools, etc.
Questions of June 2013
1. Which one of the following is the oldest and simplest form of organisation?
(a) Functional organisation (b) Committee organization
(c) Line and staff organisation (d) Line organisation.
2. Which one of the following is treated as a separate legal entity different from its members?
(a) Sole proprietorship (b) Hindu undivided family
(c) Partnership (d) Limited liability partnership.
3. Why co-operative marketing society is formed?
(a) To protect the interest of general consumers
(b) To sell the product of small farmers and producers
(c) To protect the interest of small producers
(d) To provide financial support to the members.
Solutions of June 2013
1. (d) The line type of structure is the oldest pattern of organisation. The oldest and simplest
form of organisation is line organisation. Line functions are those which have direct
responsibility for accomplishing the objectives of the enterprise.
2. (d) Limited Liability Partnership has a separate legal entity, liable to the full extent of its
assets. The liability of the partner would be limited to their agreed contribution in the LLP.
Thus, Limited Liability Partnership is treated as separate legal entity, different from its
members. In all other cases the entity and its members are same persons.
3. (b) Co-operative marketing societies are formed by small producers and manufactures
who find it difficult to sell their products individually. The society collects the products from
the individual members and takes the responsibility of selling those products in market.
Thus, cooperative marketing societies are formed to sell products of small farmers and
producers.
Questions of December 2013
1. The choice of an appropriate form of business organisation largely depends upon:
I. Ease of formation
II. Continuity and stability
III. Liability aspects
Correct option is —
(a) I and II (b) II and III
(c) I and III (d) I, II and III.
2. The minimum number of members required to get a co-operative society registered is —
(a) 15 (b) 20
(c) 10 (d) 5.
3. Which of the following entity is created under an Act of the Parliament or an Act of the
State legislature?
(a) Statutory corporation (b) Government companies
(c) Co-operative society (d) Limited Liability Partnership.
4. Which form of business organisation has a separate legal entity ?
(a) Hindu Undivided Family (HUF)
(b) Co-operative society
(c) Partnership firm
(d) Sole proprietorship.
Solutions of December 2013
1. (d) Before selecting any form of business organisation, one must consider the following
factors:
(i) Easy formation
(ii) Liability of owner
(iii) Continuity and stability
(iv) Capital Adequacy
(v) Flexibility of operations
(vi) Relationship between ownership, control & management. Thus I, II and III i.e. Ease of
formation, continuity and stability and liability aspects, all are considered while making
choice of an appropriate form of business organisation.
2. (c) Co-operative society is a voluntary association of persons who join together to
safeguard their own interest. It is a business activity without having any profit. Any 10
members can form co-operative society.
3. (a) Statutory corporation refers to an autonomous corporate body created under an Act
of Parliament or as Act of state legislature. It is set up by statute.
4. (b) Co-operative society possess the following characteristics-
(i) Voluntary Association
(ii) Separate legal entity
(iii) Democratic management
(iv) Service motive
(v) Utilisation of surplus
(vi) Cash Trading
(vii) Fixed Rate of Return
(viii) Government control (ix) Share Capital.
Thus, co-operative society has a separate legal entity.
Questions of June 2014
1. What is the liability of each partner under LLP?
(a) Limited (b) Unlimited
(c) Partially Limited (d) None of the above
2. Which of the following is not a form of organisation?
(a) Partnership (b) Company
(c) Partners (d) Sole Proprietorship
3. Who can be the head of Joint Hindu Family business?
(a) Karta (b) Co-parcener
(c) Manager (d) Director
4. Members of RUF are known as
(a) Partners (b) Shareholders
(c) Members (d) Co-parceners
5. Which amongst the following is a feature of LLP?
(a) Separate legal entity (b) Unlimited liability
(c) No perpetual succession (d) Not a body corporate
6. Head of HUF is known as -
(a) Karta (b) Co-parceners
(c) Manager (d) Head
7. In case of HUF what are liabilities of Co-parcener and Karta -
(a) Both have unlimited liability.
(b) Co-parcener’s liability is limited while Karta’s liability is unlimited.
(c) Karta’s liability is limited while Co-parcener’s liability is unlimited.
(d) Both have limited liability.
Solutions of June 2014
1. (a) Under Limited Liability Partnership, as the name represents all the partners have a
form of limited liability for each individual’s protection within the partnership.
2. (c) Partnership, Company, Sole proprietorship are forms of organisation while partners
are the members of a partnership firm and not a form of business organisation.
3. (a) According to the Hindu Law of Society, only Karta i.e. the eldest male member of the
Hindu family can be the head of Joint Hindu Family Business. Hence option (a) is correct.
4. (d) HUF is a most peculiar form of business organisation in which the family possesses
some inherited property. Its members are known as Co-parceners.
5. (a) Following are the features of a LLP :
(i) Body corporate
(ii) Separate legal entity
(iii) Perpetual succession
(iv) Easy formation
(v) Flexible operations
(vi) No minimum capital contributions
(vii) Easy dissolution
(viii) Low cost of formation
(ix) No partner liable for other partner’s act
(x) No restriction on maximum number of partners.
(xi) Mutual rights and duties of partners are governed by an LLP agreement.
Thus, among the given options, option (a) i.e. Separate legal entity is a feature of LLP.
6. (a) HUF is the most peculiar form of business organisation in which the family possesses
some inherited property and the head of the family, known as Karta, who manages its
affairs.
7. (b) In HUF, liability of all the co-parceners is limited except Karta, thus enabling more
efficient management.
Thus, liability of Karta is unlimited and co-parceners is unlimited.
Questions of December 2014
1. To form a partnership, the minimum capital contribution should be:
(a) Rs. 1 Lakh (b) There is no minimum limit
(c) Rs. 1 Crore (d) Rs. 5 Lakh.
2. The Karta in Joint Hindu Family business has:
(a) Unlimited liability (b) Joint liability
(c) Limited liability (d) No liability for debts.
3. The objects and powers of a statutory corporation:
(a) May not change (b) May not be changed easily
(c) May change easily (d) None applicable.
Solutions of December 2014
1. (b) In a partnership, there are no complicated legal formalities involved in the
establishment of partnership business. The partners entered into a partnership agreement
can start their business, there is no such any minimum capital contribution limit.
However, in case of sole proprietorship, the capital is limited to the savings of one owner or
his borrowing capacity. Hence, option B is correct.
2. (a) The liability of the co-parceners is limited, except for that of the Karta. This makes the
Karta to manage the business in the most efficient manner. Thus, the Karta in Joint Hindu
Family business has unlimited liability.
3. (b) The objects and powers of a statutory corporation may not change easily. For this,
special law passed by Parliament has to be amended for changing the objects or powers.
Questions of June 2015
1. Which corporation has both characteristics i.e. of a partnership and of a separate legal
entity?
(a) Limited Liability Partnership (LLP)
(b) Company
(c) Partnership
(d) Statutory Body.
2. Kendriya Bhandar is a:
(a) Co-operative Credit Society
(b) Consumers Co-operative Society
(c) Producers Co-operative Society
(d) Co-operative Marketing Society.
Solutions of June 2015
1. (a) A Limited Liability Partnership, popularly known as LLP combines the advantages of
both the company i.e. separate legal entity and partnership into a single form of organization.
2. (d) Kendriya Bhandar, Apna Bazar and Sahakari Bhandar are examples of consumer’s
Co-operative society.
Questions of December 2015
1. What is Karta’s liability in HUF?
(a) Limited (b) Unlimited
(c) Limited by guarantee (d) None of these
2. Which of these is not a statutory corporation?
(a) RBI (b) SBI
(c) LIC (d) Bank of Baroda
3. Liability of other Co-parceners are:
(a) Limited upto the extent of share except Karta
(b) Unlimited upto the extent of share except Karta
(c) Unlimited
(d) Limited
Solutions of December 2015
1. (b) The liability of the co-parceners is limited, except for that of the Karta. This make the
Karta to manage the business in the most efficient manner. Thus, the Karta in Joint Hindu
family business has unlimited liability.
2. (d) Statutory body is a body that is created under an Act of Parliament or an Act of state
legislatures. Examples:- RBI, SBI, LIC. Bank of Baroda is a private institution. Hence,
option(d) is correct.
3. (a) The liability of each member of the hindu undivided family business is limited to the
extent of his share in the business while karta has unlimited liability.
Questions of June 2016
1. Business undertaking are generally exposed to:
(a) Risk and uncertainty both (b) Uncertainty only
(c) Risk only (d) Neither risk nor uncertainty.
2. A Public Corporation has:
(a) Public ownership
(b) Public accountability
(c) Business management for public
(d) All are applicable.
3. The liability of each member of the Hindu Undivided Family business is:
(a) Limited to a sum as declared by him in general public
(b) Unlimited
(c) Limited to the extent of his share in the business except karta
(d) Limited to the extent of his share in the business including that of karta.
Solutions of June 2016
1. (a) Business undertakings are always exposed to risk and uncertainty. Business is
influenced by future conditions which are unpredictable and uncertain. This makes business
decisions risky, thereby increasing the chances of loss arising out of business.
2. (d) A public corporation is formed by the government to meet some governmental and
political purpose. The very common examples are for the cities and town benefits.
3. (c) The liability of each member of the Hindu Undivided Family business is limited to the
extent of his share in the business except karta. This makes the Karta to manage the
business in the most efficient manner.
Questions of December 2016
1. The affairs of a company is overseen by:
(a) Shareholders
(b) Employees
(c) Board of Directors
(d) Dividend Holders.
2. In case of Hindu Undivided Family, the individual share of each coparcener:
(a) depends upon his efficiency
(b) keeps changing on the death or birth of co-parcener
(c) is fixed
(d) keeps changing annually
3. The size and structure of business depend on many factors which (are):
(a) In the control of enterprises
(b) Arbitrary and random
(c) Range from internal to external factors which are beyond the control of enterprises
(d) Beyond the control of enterprises.
4. Limited Liability Partnership is constituted under __________.
(a) The Companies Act, 2013
(b) Limited Liability Partnership Act, 2008
(c) Partnership Act, 1932
(d) None is applicable.
Solutions of December 2016
1. (c) A company is a voluntary association of people carrying on - business. It is a Artificial
Legal person whose management is separated from ownership. Ownership lies with
shareholders who contribute share capital and management lies with the Board of
Directors who oversee the affairs of company.
2. (c) In a Hindu Undivided Family Business, the share of each Co parcener is fixed but is
liable to change due to death or birth of any member in the family.
3. (a) The Size and Structure of Business depend upon factor such as:
(a) District Ownership
(b) Lawful Business
(c) Separate Status
(d) Deals in Goods and Services
(e) Risk involvement
They are all in the control of enterprise.
4. (b) Limited Liability Partnership, the world wide recognized form of business organisation
has been introduced in India by the way of Limited Liability Partnership Act, 2008.
Questions of June 2017
1. In case of Cooperative Societies minimum number of members are:
(a) 7
(b) 2
(c) 5
(d) 10
2. Sole proprietary business is suitable when market is:
(a) Non Existent
(b) National
(c) Local
(d) Global
3. Limited liability partnership is constituted under __________.
(a) Companies Act, 2013
(b) Limited Liability Partnership Act, 2008
(c) Partnership Act, 1932
(d) None is applicable
Solutions of June 2017
1. (d) In case of Co-operative society the minimum number of members required are 10
under the Co-operative Society Act, 1912 but the Act does not specify the maximum number
of members for any co-operative society.
2. (c) The sole proprietorship business is most suitable where the market for the product is
small and local, where the capital requirement is small and the risk involvement is not too
heavy. Thus, Option C is correct.
3. (b) Limited Liability Partnership Act, 2008 came into effect by way of notification dated 31st
March, 2009. Thus it is governed by Limited Liability Partnership Act, 2008.
Multiple Choice Questions
1. Following is not a characteristic of business organisation:
(a) Discontinuity of operations (b) Distinct ownership (c) Lawful business (d) Risk
involvement.
Answer:
2. is a form of business that is owned, managed and controlled by an individual.
(a) Partnership (b) Company
(c) HUF (d) Sole Proprietorship.
Answer:
3. Individual owing and running the business is known as:-
(a) Single owner (b) Sole Trader
(c) Single Trader (d) Businessman.
Answer:
4. Which of the following is an advantage of sole proprietorship?
(a) Easy formation (b) Maintenance of business secrecy
(c) Both (a) and (b) (d) None of the above.
Answer:
5. Which of the following has most stable existence?
(a) Sole proprietorship (b) Partnership
(c) Company (d) HUF.
Answer:
6. Which form of organisation is only found in India?
(a) HUF (b) Co-Operative Society
(c) Joint Stock Company (d) Governmental Undertaking.
Answer:
7. The business affairs are managed by the head of the family, known as—
(a) Co-parcener (b) Owner
(c) Shareholder (d) Karta.
Answer:
8. Karta’s liability is—
(a) Limited (b) Unlimited
(c) Limited by guarantee (d) None of the above.
Answer:
9. Mutual agency is an important feature of—
(a) HUF (b) Joint Stock Company
(c) Partnership (d) Co-operative Society.
Answer:
10. Company is managed by shareholders.
(a) True (b) False
(c) Can’t say (d) None of the above.
Answer:
11. In which of the following, the ownership of venture is reflected by ownership of shares or
stock?
(a) HUF (b) Partnership
(c) Corporations (d) Trusts.
Answer:
12. For having direct control over the business activities, which form is preferred—
(a) Partnership - (b) Sole proprietorship
(c) HUF (d) Company.
Answer:
13. Which is not a characteristic of sole proprietorship?
(a) No sharing of profit and loss (b) One-man’s capital (c) Less legal formalities (d)
Association of persons.
Answer:
14. What are the characteristics of HUF?
(a) Governed by Hindu Law
(b) Continuity
(c) Fluctuating share of each member
(d) All of these.
Answer:
15. Cooperative society is that society which has been registered under the Cooperative
Society Act __________?
(a) 1920 (b) 1932
(c) 1912 (d) 1872.
Answer:
16. LLP, this forms of organisation has been introduced in India by way of?
(a) LLP Act, 2009 (b) LLP Act,2008
(c) LLP Act, 1932 ' (d) None of these.
Answer:
17. Which is the last step to end LLP?
(a) Receive certificate
(b) Signature
(c) File electronically
(d) Track status.
Answer:
18. Direct motivation, maintenance of business secrets, close personal relations etc are the
advantages of
(a) Partnership
(b) Limited liability partnership
(c) HUF
(d) Sole Proprietorship
Answer:
19. The profit share of coparceners in a HUF
(a) Depends on the Capital Contributed
(b) Depends on the decision of Karta
(c) Is equal
(d) None of the above
Answer:
20. In case of death of a partner
(a) The partnership dissolves (b) The partnership firm dissolves (c) Both (a) and (b) (d)
Neither (a) nor (b)
Answer:
21. Greater Permanency, limited liability, ease of transfer of ownership are the advantages
of
(a) HUF (b) LLP
(c) Sole Proprietorship (d) Company
Answer:
22. AMUL milk products is an example of
(a) Co-operative Farming Society
(b) Consumer Co-operative Society
(c) Co-operative Credit Society
(d) Co-operative Market Society
Answer:
23. The societies formed to provide financial support to the members are called
(a) Co-operative Credit Society
(b) Housing Co-operative Society
(c) Co-operative Finance Society
(d) None of the above
Answer:
24. Voluntary association, utilization of surplus, cash trading etc. are the characteristics of
(a) Co-operative society
(b) Company
(c) Statutory body
(d) All of the above
Answer:
25. Which of the following statement is true in respect of the voting rights of a member in a
Co-operative Society?
(a) Each member has one vote
(b) Voting rights are proportionate to the capital contributed
(c) Voting rights is not exercised by the members
(d) None of the above
Answer:

Answer

1 (a) 2 (d) 3 (b) 4 (c) 5 (c) 6 (a)

7 (d) 8 (b) 9 (c) 10 (b) 11 (c) 12 (b)

13 (d) 14 (d) 15 (c) 16 (b) 17 (a) 18 (d)

19 (c) 20 (a) 21 (d) 22 '(d) 23 (a) 24 (a)

25 (a)

CHAPTER 2 BUSINESS ENVIRONMENT

Questions of December 2012

1. Which of the following is a part of liberalisation process?
(a) Making industrial licensing requirement mandatory in most of the industry
(b) Regulating the scale of business activities
(c) Fixing of prices of goods and services
(d) Simplifying the procedures for imports and exports.
2. Macro factors of business environment are generally:
(a) As controllable as micro factors
(b) Less controllable than micro factors
(c) More controllable than micro factors
(d) None of the above.
3. Which one of the following is the result of product differentiation?
(a) Brand Equity
(b) Competitive Advantage
(c) Value System
(d) None of the above.
4. Which one of the following is the desired future position?
(a) Financial Statement
(b) Vision Statement -
(c) Objectives
(d) All of the above.
5. Mission Statement of a company is derived from its:
(a) Articles of Association
(b) Vision Statement
(c) Memorandum of Association
(d) Prospectus.
6. There is a close and __________ interaction between the business and its environment.
(a) Frequent
(b) Continuous
(c) Seldom
(d) Occasional
Solutions of December 2012
1. (d) Liberalisation refers to the process of eliminating unnecessary controls and restrictions
on the smooth functioning of business enterprises.
It includes:
(i) Abolishing industrial licensing requirement.
(ii) Freedom in fixation of goods and services.
(iii) Reduction in tax rates.
(iv) Freedom in deciding business scale.
(v) Simplifying import export procedures.
Thus, among the given options, simplifying the procedures for imports and exports is
right.
2. (b) Macro Environment also known as General or Remote Environment is beyond the
direct control and influence of the organisation. These factors are more uncontrollable than
micro factors i.e. they are less' controllable than micro factors.
3. (b) Competitor analysis is a critical aspect of analyzing the internal business
environment. Competitor's action affect the ability of the business to make profits, because
competitors will continually seek to gain advantage over each other, by differentiating their
product and service and by seeking to provide better value for money.
4. (b) Vision Statement is a road map of a company's future. It describes the desired future
position of the company.
5. (b) Mission Statement helps defining the company's business, its objectives and its
approach to reach those objectives. It broadly describes an organisation's present
capabilities, customer focus, activities and business makes, thus helping an organisation to
reach its desired future position as set out in its vision statement.
Thus, mission statement of a company is derived from its Vision Statement.
6. (b) Business environment is always changing in nature. Moreover, environment influences
business and in turn, business influences environment.
Thus, it can be said that there is close and continuous interaction between business and its
environment.
Questions of June 2013
1 Which one of the following shows a big picture of what a company wants to achieve in
future?
(a) Vision statement (b) Mission statement
(c) Value statement (d) Quality statement.
2. Value system of an organisation have an impact on its:
I. Objectives
II. Policies
III. Practices
IV. Profit
The correct option is:
(a) I and II only (b) I, II and III only
(c) II, III and IV only (d) I, II, III and IV.
3. Which among the following are the key drivers of globalisation?
(a) Government action, exchange rates, competition and socio-demographic factors
(b) Market convergence, competition, exchange rates and cost advantages
(c) Cost advantages, government action, economic cycles and competition
(d) Market, cost, competition and government policies.
Solutions of June 2013
1. (a) Vision statement is where you want your business to reach at. It is your future dream
for your business. Thus we can say that Vision Statement shows a big picture of what a
company wants to achieve in future.
2. (b) The principles of right and wrong that are accepted by an individual or organisation are
what comprise value system. The value system of the founders and those at the helm of
affairs has important bearing on the choice of business, the mission and objectives of the
organisation, business policies and practices.
Thus, value system has no impact on profits of an organisation.
3. (b) Globalization may be defined as “the growing Economic interdependence of the
country worldwide through increasing volume and variety of gross border transactions in
goods and services. Thus, we can say that, market convergence, competition, exchange
rates and cost advantages are the key drivers of globalization.
Questions of December 2013
1. Which one of the following is not a feature of business environment ?
(a) Dynamic nature (b) Image building
(c) Uncertainty (d) Totality of external forces.
2. Which one of the following describes the desired future position of a company ?
(a) Mission statement (b) Vision Statement
(c) Competitive advantage (d) Qualitative policy.
3. The process of eliminating unnecessary controls and restrictions on the smooth
functioning of a business enterprise is known as :
(a) Liberalisation (b) Globalisation
(c) Privatisation (d) None of the above.
Solutions of December 2013
1. (b) Following are the features of Business Environment:
(i) Dynamic
(ii) Multi - faceted
(iii) Sum of external forces
(iv) Uncertainty
(v) Both specific and general forces
(vi) Relativity
Therefore, image building is not a feature of business environment.
2. (b) ‘Vision Statement’ is a road map of a companies future. It describes the desired future
position of the company.
3. (a) Liberalisation refers to relaxation of previous government restrictions usually in areas
of social and economic policies. It refers to the process of eliminating unnecessary controls
and restrictions on the smooth functioning of business enterprises.
Questions of June 2014
1. Business environment consists of which element?
(a) Internal (b) External
(c) Both (a) & (b) (d) None of these
2. Which of the following is not an economic policy?
(a) Industrial Policy (b) Fiscal Policy
(c) Exim Policy (d) Technological Policy
3. Macro environment is concerned with major issues and upcoming changes in the
environment.
(a) True (b) False
(c) Partly True (d) Partly False
4. Which of the following factor is not included in micro-environment?
(a) Customers (b) Employees
(c) Suppliers (d) Technology
5. The economic environment of business in India is changing at a fast rate mainly due to
economic policies:
(a) True (b) False
(c) Partly Yes (d) Partly No
6. Which of the following affects an individual enterprise ?
(a) General forces (c) Both (a) and (b)
(b) Specific forces (d) None of these
7. Which among the following is the vision of ICSI?
(a) “Promoting global excellence”
(b) “To be a global leader in promoting good corporate governance”
(c) “Partners in Nation building”
(d) “Building corporate responsibility”
8. When a state owned enterprise is given in private hands, it is known as __________.
(a) Liberalisation (b) Globalisation
(c) Privatisation (d) Transformation
9. Who started the process of liberalisation ?
(a) Yashwant Singh (b) Jashwant Singh
(c) Manmohan Singh (d) Mahatma Gandhi
10. Mission Statement is derived from -
(a) Future position of the company
(b) Company’s business and its objectives
(c) Both (a) and (b)
(d) None
11. Which of the following is not an example of mission statement?
(a) NIKE - To bring inspiration and innovation to every athlete in the world.
(b) FACEBOOK - Power to share and make the world open & connected.
(c) GOOGLE - To organise the world’s information and make it universally accessible and
useful.
(d) ICSI - To develop high caliber professionals facilitating good corporate governance.
Solutions of June 2014
1. (c) Business environment factors is a sum of several external and internal forces that
affects the functioning of the business.
Thus, it contains both internal and external elements.
2. (d) Economic policies are:
- Industrial policy
- Fiscal policy
- EXIM policy
- Foreign investment policy
Thus, technological policy is not an economic policy.
3. (a) It is true that macro environment is concerned with major issues with which the
organisation deals for long term working.
4. (d) Micro economics comprises of following factors.
- Consumer / Customers - Competitors
- Employees - Suppliers
- Share holders - Media
Thus, in the given question, technology is not a factor of micro environment.
5. (b) The economic conditions of a country refer to a set of economic factors that have great
influence on business organisations. Hence, the given statement that economic environment
of business in India is changing at a fast rate mainly due to economic policies are false.
6. (b) General forces affect the enterprises or industry as a whole while the specific forces
affect the individual enterprises.
Hence, option (b) is correct.
7. (b) Vision statement is a road map of a company’s future. Following is the vision of ICSI,
“To be a global leader in promoting good corporate governance.
8. (c) Privatization refers to the transfer of assets or service functions from public to private
ownership or control.
Thus, under privatisation a state owned enterprise is given in private hands.
9. (c) Manmohan Singh started the process of liberalisation.
10. (b) Mission statement helps defining the Company’s business, its objectives and
its approach to reach those objectives. It broadly describes an organisation’s present
capabilities, customer focus,, activities and business makes, thus helping an organisation to
reach its desired future position as set out in its vision statement.
11. (d) The mission statement of ICSI is “to develop high caliber professionals facilitating
good corporate governance.”
Thus, option (d) is not an example of mission statement.
Questions of December 2014
1. Early identification of opportunities helps an enterprise to be the first to exploit them
instead of losing it to competitors. The mentioned advantage can be categorised under:
(a) First mover advantage
(b) Initial identifier advantage
(c) Earlier advantage
(d) Second mover advantage.
2. Recruitment of public relations consultants are a part of
(a) Operating Environment
(b) General Environment
(c) Macro Environment
(d) Competitive Environment.
3. Liberalization in India did not result in:
(a) A high growth rate
(b) A healthy and flourishing stock market
(c) Easy availability of goods at competitive prices
(d) Low foreign exchange reserves.
Solutions of December 2014
1. (a) Under first mover advantage, early identification of opportunities helps an enterprise to
be the first to express them instead of losing them to competitors. For ex. Maruti Udyog
became the leader in the small car market because it was the first to recognize the need of
small cars in India.
2. (a) Public relations is a practice of managing the spread of information between an
individual or an organisation the public. Public relations is the idea of creating coverage for
clients, rather than marketing or advertising the aim of public relations is to inform the public,
prospective customers, investors, partners, employees and other stakeholders and
ultimately persuade them to maintain certain view about the organisation. So recruitment of
public relation consultants is a part of Operating Environment.
3. (d) Benefits of liberalization includes:
(i) It has led to expansion of Indian Economy.
(ii) Easy entry of foreign business organisation in India.
(iii) High growth rate.
(iv) Availability of goods at competitive prices.
(v) Healthy stock market.
(vi) Low inflation rate.
But it does not result in low foreign exchange reserves.
Questions of June 2015
1. Where is company’s mission statement derived from?
(a) From the vision of the company
(b) From the company policies
(c) Memorandum of Association of the Company
(d) All of the above
2. Opening up of an industry that has been reserved for the public sector to the private
sector is an example of:
(a) Modernisation (b) Liberalisation
(c) Globalisation (d) Privatisation
3. Mission statement is derived from
(a) Vision statement
(b) Laws and statutes
(c) Company policies
(d) The company’s memorandum of association
Solutions of June 2015
1. (a) Elements of Mission and Vision statements are often combined to provide a statement
of the purposes, goals and values of the companies. However, some times the two are used
interchangeably. Where your vision is your ultimate goal, your mission is how you get there.
2. (d) Another dimension of privatization is opening up of an industry that has been reserved
for the public sector of the private sector.
3. (a) The mission statement of a enterprise is derived from its vision, in some places
mission and vision statements are used interchangeably.
Questions of December 2015
1. Which of these is not included in (NAFTA) North American Free Trade Agreement?
(a) US (b) India
(c) Mexico (d) Canada
2. Who started the process of liberalisation?
(a) Yashwant Singh (b) Jashwant Singh
(c) Manmohan Singh (d) Mahatma Ghandhi
3. When did Government of India introduced a change in Economic policy?
(a) 1892 (b) 1991
(c) 1895 (d) 1781
Solutions of December 2015
1. (b) US, Canada and Mexico have signed the North American Free Trade Agreement to
remove all trade barriers among these countries. India is not a part of NAFTA.
2. (c) Manmohan Singh started the process of liberalisation.
3. (b) Government of India introduced a change in Economic policy 1991. This policy
abolished licensing in most of the cases, allowed private participation in most industries,
disinvestment was carried out in many public sector enterprises and opened up the economy
considerably.
Questions of June 2016
1. Mission statement is derived from:
(a) Company policies
(b) The Companies memorandum of association
(c) Vision statement
(d) Laws and statutes
2. Product differentiation is an example of:
(a) Brand loyalty
(b) Value statement
(c) Brand equity
(d) Competitive advantage.
3. Which of the following is correct?
(a) Privatisation got momentum in India after 1947
(b) Privatisation and liberalisation has no co-relation
(c) Privatisation facilitates liberalisation
(d) Liberalisation facilitates privatisation.
4. __________ is not part of External Environment analysis:
(a) Analysing financial ratio
(b) Studying the political environment
(c) Analysis available technologies
(d) Analysis social, cultural, demographic and geographic forces.
5. Which of the following is a part of internal environment scanning:
(a) Political environment
(b) Customer preferences
(c) Chain of command
(d) Law and order.
6. __________ causes unnecessary delays, file backups, storage problem and the like:
(a) Fungus
(b) Bacteria
(c) Virus
(d) Protozoa.
Solutions of June 2016
1. (c) Mission statement is derived from the vision statement, as mission statement defines
the company’s objective, business and its approach to reach those objectives or the desired
future position of the company. Thus, elements of mission and vision are often combined to
provide a statement of purpose, goal & values of the company.
2. (d) Product differentiation is an example of competitive advantage. To explain it is a
critical aspect of analyzing the internal business environment. Competitor’s action affect the
ability of the business to make profit and gain an advantage over each other; thus for
seeking to provide better value for money.
3. (d) Liberalisation refers to the process of eliminating unnecessary controls & restrictions
on the smooth functioning of business enterprises thereby facilitating privatisation showing
inevitable historical reaction to the indiscriminate expansion of the state sector & the
associated problems.
4. (a) The external environment of an organisation comprises of all entities that exists
outside its boundaries, but have significant influence over its growth and survival. Hence,
analysing financial ratio is not a part of external environment analysis.
5. (b) Customer preferences is a part of internal environment scanning as the organisation
survive on the basis of meeting “customer needs and wants” and providing benefits to their
customers. Failure to do so will result in a failed business strategy.
6. (c) Virus causes unnecessary delays, file backups, storage problems and the like.
Therefore, the existing technology is not best suited every time. The connections are
unstable, data transfer problems, high cost, competing standards are other constraints.
Questions of December 2016
1. Which of the following is not included in an analysis of the business environment?
(a) Economic trends
(b) Animal behaviour
(c) Social behaviour
(d) Political trends.
2. Opening up of an industry that has been reserved for the public sector to the private
sector is an example of:
(a) Modernization
(b) Globalization
(c) Liberalization
(d) Privatization.
3. Which of the following is not correct?
(a) Identification of possible threats does not help an organization to face the competition
(b) Identification of possible threats helps an organization to grow even in competition
(c) Identification of possible threats helps in taking corrective and improving measures to
survive the competition
(d) Identification of possible threats require thorough knowledge of business environment.
4. Generally the main reason behind starting a business is:
(a) Social service
(b) Earning profits
(c) Earning name
(d) Spiritual reasons.
Solutions of December 2016
1. (b) The acronym for macro analysis is STEEP. The five areas of Interest are:
(a) Socio Cultural and Demographics
(b) Technology
(c) Economic Condition
(d) Ecology and Physical Environment
(e) Political and Legal trend
2. (d) Privatization has become a universal trend means transfer of ownership or
management from public sector to private sector. It also means withdrawal of state from an
industry or sector, partial or fully. Another dimension of privatization is opening up industry
that has been reserved for public sector to private sector.
3. (a) Identification of possible threat help an organisation to face competition and even
grow.
4. (b) Every business serve as a common purpose to earn profit all other reasons are
secondary.
Questions of June 2017
1. Key goal in the firm’s growth phase is:
(a) Expansion of sales.
(b) Expansion of capital.
(c) Cutting costs.
(d) Expansion of profit.
2. Competitors are a part of:
(a) External business environment.
(b) Internal business environment.
(c) Both External and Internal environment.
(d) Neither External nor Internal environment.
3. An activity which is related with continuous and regular production and distribution of
goods and services for satisfying human wants is called:
(a) Production
(b) Distribution
(c) Service
(d) Business
4. The World Trade Organisation (WTO) is stimulating:
(a) Privatisation
(b) Liberalisation
(c) Localization
(d) Globalisation
Solutions of June 2017
1. (a) After the successful introduction of a product, the company tries to increase its market
share or sales in the growth phase, which is its percentage of sales volume compared to
competitors in the same category. The company focuses on additional promotional and '
distribution efforts to reach as many potential end users as possible.
2. (a) External Environment consist of the factors that are outside the company’s boundaries,
thus the company has no control over them. Competitors are the part of the same. Before
making any strategy, business must be aware of its competitors actions to the environment
changes.
3. (d) Business is very wide term and is put to different usages. It can be referred as the
activity consisting of purchase, sale, manufacturing, processing and marketing of goods and
services. It exist for profits and satisfying human wants in many ways. Therefore society and
business cannot function without each other.
4. (d) Globalisation refers to integration of world into huge market by removing the trade
barrier among countries. US, Canada and Mexico have signed the North America Free
Trade Agreement (NAFTA) to remove all the trade barrier among the countries. Thus, World
Trade Organisation (WTO) has stimulated the cross borders trade.
Multiple Choice Questions
1. Features of business environment does not include:
(a) Uncertainty
(b) Relativity
(c) Static Nature
(d) Specific and General forces
Answer:
2. “Where you can visualize your business in 10 years time”. This is a:
(a) Mission Statement
(b) Vision Statement
(c) Business Statement
(d) Statement of purpose.
Answer:
3. Types of Business Environment includes the following:
(a) Internal
(b) External
(c) Both (a) and (b)
(d) None of the above
Answer:
4. Internal business environment does not include:
(a) Man
(b) Money
(c) Marketing Resources
(d) Government Policies.
Answer:
5 is a type of external environment.
(a) Operating
(b) General
(c) Remote
(d) All of the above.
Answer:
6. Micro environmental factors can be described as ……………….. close to a business that
have a direct impact on its strategy.
(a) External factors
(b) Internal factors
(c) Both (a) and (b)
(d) Competitive factors
Answer:
7. Change in technology, economic conditions, political and legal factors are ………………..
factors.
(a) Internal
(b) External
(c) Both (a) and (b)
(d) None of the above
Answer:
8. ……………….. is a process of eliminating unnecessary controls and restrictions on the
smooth functioning of business enterprises.
(a) Privatisation
(b) Globalisation
(c) Liberalisation
(d) None of the above.
Answer:
9. Following is not an objective of privatisation :
(a) Improving the performance of PSU’s
(b) Decreasing the size of private sector
(c) Reducing administrative burden
(d) Revenue Generation.
Answer:
10. __________ describes the desired future position of the company.
(a) Internal Environment
(b) Mission Statement
(c) Vision Statement
(d) External Environment.
Answer:
11. A Business has absolute control on the __________.
(a) Internal Environment
(b) External Environment
(c) Both (a) & (b)
(d) None of these.
Answer:
12. Micro and Macro Environment is the part of __________.
(a) Business Environment
(b) Internal Environment
(c) External Environment
(d) Both (b) & (c).
Answer:
13. Micro Environment is also known as
(a) Operating Environment
(b) Task Environment
(c) Both (a) and (b)
(d) Either (a) or (b).
Answer:
14. Financial Factors, Human Resource, Marketing Resource and Miscellaneous Factors are
__________ Factors.
(a) Micro
(b) Macro
(c) Internal
(d) External
Answer:
15. GDP, Per capital income, foreign exchange are the examples of
(a) Economic Policy
(b) Economic System
(c) Economic Conditions
(d) Both (a) and (b).
Answer:
16. When did Government of India introduced a change in Economic Policy
(a) 1892
(b) 1991
(c) 1895
(d) 1781.
Answer:
17. Through the __________ Process, Indian economy has opened up and started
interacting with the world.
(a) Liberalisation
(b) Privatisation
(c) Globalisation
(d) None of these.
Answer:
18. High growth rate, easy availability of goods, at competitive rate, high foreign exchange
reserve can be achieved by:
(a) Liberalisation (b) Privatisation
(c) Globalisation (d) All of the above.
Answer:
19. __________ means transferring something from state ownership to private ownership.
(a) Decentralisation (b) Denationalisation
(c) Divestiture (d) None of these.
Answer:
20. Problems in Privatisation are:
(a) Growth of monopoly power
(b) Loss making units are not bought
(c) Lop-sided industrial development
(d) All of the above.
Answer:
21. __________ refers to integration of world into one huge market by removing the trade
barriers among countries.
(a) Privatisation (b) Liberalisation
(c) Globalisation (d) None of these.
Answer:
22. __________ helps defining the company’s business, its objectives and its approach to
reach those objective.
(a) Vision statement (b) Mission statement
(c) Business statement (d) Statement of purpose.
Answer:
23. Legislature, executive and the judiciary comes under the
(a) Political Environment (b) Physical Environment
(c) Legal Environment (d) Both (a) and (c).
Answer:
24. __________ is the future dream of a business.
(a) Balance Sheet (b) Vision Statement
(c) Mission Statement (d) None of the above
Answer:
25. Which of the following is not covered by the organisation’s Internal f Environment
(a) Human Resource (b) R & D
(c) Media (d) Management Structure
Answer:
26. The forces which are external but still have a direct bearing on the operations of the firm
are called.
(a) Micro Environment (b) Macro environment
(c) Internal Environment (d) All of the above
Answer:
27. Customers, shareholders, competitors, etc. are the elements of
(a) Micro Environment (b) Internal environment
(c) Macro Environment (d) None of the above
Answer:
28. Technology. Culture, Demographics etc. are the elements of
(a) Internal Environment (b) Micro Environment
(c) Macro Environment (d) None of the above
Answer:
29. Which of the following is not a use of Vision/Mission Statement?
(a) Inspiring the Employees
(b) Defining Problems & Standards
(c) Increasing the profits and revenue
(d) Defining the Performance Standards
Answer:
30. Which of the following is not true in relation to the business environment?
(a) It is beyond the organisational
(b) It is a sum total of internal and external control factors
(c) Organisation can remain insensitive to the business environment
(d) It is dynamic in nature
Answer:
31. The partial or full disposal of an investment or asset through sale, exchange, closure or
bankruptcy is called as (a) Divestiture (b) Environment withdrawal
(c) Denationalisation (d) Reprivatisation
Answer:

Answer

1 (c) 2 (b) 3 (c) 4 (d) 5 (d) 6 (b)

7 (b) 8 (c) 9 (b) 10 (c) 11 (a) 12 (c)

13 (c) 14 (c) 15 (c) 16 (b) 17 (a) 18 (a)

19 (b) 20 (d) 21 (c) 22 (b) 23 (a) 24 (b)

25 (c) 26 (a) 27 (a) 28 (c) 29 (c) 30 (c)

31 (a)

CHAPTER 3 BUSINESS ORGANIZATION

TOPIC NOT YET ASKED BUT EQUALLY IMPORTANT FOR EXAMINATION
1. Management analysts are also known as
(a) Management Accountants (b) Management Persons
(c) Management Consultants (d) Management Incharge
Answer: (c)
!. Adani Group was formed in
(a) 1998 (b) 1999
(c) 2001 (d) 2002
Answer: (a)
3. Adani Group has its headquarter in
(a) Maharashtra (b) Gujarat
(c) Karnataka (d) Rajasthan
Answer: (b)
4. Asian Paints operates in __________ countries.
(a) 16 (b) 17
(c) 18 (d) 19
Answer: (d)
5. Asian Paints was initially set up as a
(a) Partnership Firm (b) Limited Liability Partnership
(c) Private Company (d) Public Company
Answer: (a)
6. Asian Paints was set up by __________ friends.
(a) 2 , (b) 3
(c) 4 (d) 7
Answer: (c)
7. Asian Paints was set up in
(a) 1932 (b) 1942
(c) 1952 (d) 1962
Answer: (b)
8. Axis Bank is the __________ largest private sector bank in India.
(a) Second (b) Third
(c) Fourth (d) Fifth
Answer: (b)
9. Axis Bank was established in
(a) 1993 (b) 1995
(c) 1997 (d) 1999
Answer: (a)
10. Bajaj Group was established in
(a) 1945 (b) 1946
(c) 1947 (d) 1948
Answer: (a)
11. Bajaj Group was established by
(a) Rahul Bajaj (b) Rajeev Bajaj
(c) Jamnalal Bajaj (d) Yamunalal Bajaj
Answer: (c)
12. The headquarter of Bajaj Group is situated in
(a) Mumbai (b) Pune
(c) Ahmedabad (d) New Delhi
Answer: (b)
13. Bharti Group was established in
(a) 1995 (b) 1996
(c) 1997 (d) 1998
Answer: (a)
14. Bharti Group was established by
(a) Sushil Mittal (b) Sunil Mittal
(c) Suresh Kumar Mittal (d) Arundhati Mittal
Answer: (b)
15. Bharti Group has its headquarter in
(a) New Delhi (b) Mumbai
(c) Hyderabad (d) Bengaluru
Answer: (a)
16. The initial business of Bharti Group was
(a) Mobile phones (b) Push button phones
(c) Laptops (d) Computer parts
Answer: (b)
17. Bharat Petroleum Corporation Ltd. was established with the name
(a) Bharat Shell Ltd.
(b) Bharat Shell Refineries Ltd.
(c) Burmah Shell Refineries Ltd.
(d) Bharat Crude Oil Ltd.
Answer: (c)
18. BPCL was established in
(a) 1945 (b) 1947
'(c) 1952 (d) 1956
Answer: (c)
19. BPCL has its headquarter in
(a) Bhavnagar (b) Jamnagar
(c) Mumbai (d) New Delhi
Answer: (c)
20. Cipla Ltd. was established in
(a) 1925 (b) 1930
(c) 1932 (d) 1935
Answer: (d)
21. Coal India Limited is the __________ coal producer company in the world.
(a) Largest (b) 2nd largest
(c) 3rd largest (d) 4th largest
Answer: (a)
22. Coal India Limited has __________ wholly owned subsidiaries.
(a) 4 (b) 5
(c) 6 (d) 7
Answer: (d)
23. Dr. Reddy’s Laboratories Ltd. is the __________ pharmaceutical company in India.
(a) Largest (b) 2nd largest
(c) 3rd largest (d) 4th largest
Answer: (c)
24. Dr. Reddy’s Laboratories Ltd. and GAIL (India) Ltd. were incorporated in the year
(a) 1982 (b) 1984
(c) 1986 (d) 1988
Answer: (b)
25. Which bank uses the slogan “We understand your world”?
(a) ICICI Bank (b) HDFC Bank
(c) Axis Bank (d) Citi Bank
Answer: (b)
26. HDFC Bank and ICICI Bank were formed in the year
(a) 1980 (b) 1984
(c) 1988 (d) 1994
Answer: (d)
27. Largest private sector bank in India is
(a) Axis Bank (b) ICICI Bank
(c) HDFC Bank (d) IDBI Bank
Answer: (b)
28. The Bank of Rajasthan was acquired by
(a) SBI (b) PNB
(c) ICICI Bank (d) HDFC Bank
Answer: (c)
29. Which is the largest Commercial Enterprise in India
(a) Indian Oil Corporation Ltd. (b) ONGC
(c) GAIL (d) Reliance Industries Ltd.
Answer: (a)
30. SERVO brand is developed by
(a) ONGC (b) GAIL
(c) Indian Oil Corporation Ltd. (d) Reliance Industries Ltd.
Answer: (c)
31. Infosys Ltd. was formed in the year
(a) 1979 (b) 1980
(c) 1981 (d) 1982
Answer: (c)
32. Candyman is the brand owned by
(a) ITC Limited (b) Nestle Group
(c) Cadbury Group (d) Amul Group
Answer: (a)
33. L & T stands for
(a) Levis & Thunderbolt (b) Levis & Toubro
(c) Larson & Toubro (d) Larson & Thunderbolt
Answer: (c)
34. NTPC Ltd. Has __________ subsidiaries.
(a) 5 (b) 6
(c) 7 (d) 8
Answer: (a)
35. ONGC Ltd. Was incorporated in
(a) 1955 (b) 1956
(c) 1960 (d) 1961
Answer: (b)
36. India’s largest private sector company is
(a) Reliance Industries Ltd. (b) Tata Group (c) Adani Group (d) Birla Group
Answer: (a)
37. SB I was incorporated in
(a) 1806 (b) 1932
(c) 1947 (d) 1955
Answer: (a)
38. Voltes is a brand owned by
(a) Reliance Industries Ltd. (b) Tata Group (c) Infosys Ltd. (d) ITC Ltd.
Answer: (b)
39. Wipro Ltd. was incorporated in
(a) 1940 (b) 1943
(c) 1944 (d) 1945
Answer: (d)
40. Deutsche Bank has its headquarter in
(a) France (b) Holland
(c) Germany (d) Italy
Answer: (c)
41. Nestle Group is the world’s __________ food company
(a) Largest (b) 2nd largest
(c) 3rd largest (d) 4th largest
Answer: (a)
42. Microsoft corporation was founded by
(a) Bill Gates (b) James Smith & Bill Gates
(c) James Smith & Paul Allen (d) Paul Allen & Bill Gates
Answer: (d)
43. Automated Teller Machine was invented by
(a) Microsoft Corporation (b) IBM Corporation (c) Dell Corporation (d) HP Corporation
Answer: (b)
44. Pentium processor is developed by
(a) Microsoft Corporation (b) Intel Corporation
(c) Dell Corporation (d) IBM Corporation
Answer: (b)
45. Which pharmaceutical company has the slogan ‘caring for life’?
(a) Dr. Reddy’s
(b) Lupin Ltd.
(c) Cipla Ltd.
(d) Sun Pharmaceutical Industries Ltd.
Answer: (c)
46. Which gas company owns India’s largest pipeline network?
(a) Gail (India) Ltd.
(b) Bharat Petroleum Corporation. Ltd.
(c) Reliance Industries Ltd.
(d) ONGC
Answer: (a)
47. State Bank of India was formerly known as:
(a) Bank of Madras (b) Bank of Calcutta
(c) Imperial Bank (d) Indian Bank
Answer: (c)
48. Which industrial category does Wipro Ltd. come under?
(a) Pharmaceuticals & Drugs (b) Diversified
(c) Media (d) IT- Software
Answer: (d)
49. Which of the following IT companies is not based in the US?
(a) Microsoft Corporation (b) Intel Corporation
(c) HCL Technologies Ltd. (d) IBM Corporation
Answer: (c)
50. NESTLE is a beverage partner with which of the following companies?
(a) Coca-Cola India (b) PepsiCo India Holdings Pvt. Ltd.
(c) Red Bull India Pvt. Ltd. (d) Dabur India Ltd.
Answer: (a)
51. The major textile brand ‘Vimal’ was introduced in which year?
(a) 1975 (b) 1965
(c) 1985 (d) 1986
Answer: (a)
52. Which Bank provides the digital service PayZapp?
(a) Axis Bank Limited (b) HDFC Bank Limited
(c) ICICI Bank Limited (d) SBI
Answer: (b)
53. Which of the following is not a product of Bajaj Auto Limited?
(a) Avenger (b) Discover
(c) Splendor (d) CT 100
Answer: (c)
54. Which of the following is a subsidiary of Gail India Limited?
(a) Central Coalfields Limited
(b) Mahanadi Coalfields Limited
(c) Western Coalfields Limited
(d) Brahmaputra Cracker and Polymer Limited
Answer: (d)
55. The mission of which transnational company is ‘Good Food, Good Life’?
(a) Tata Group (b) Reliance fresh
. (c) Nestle (d) Starbucks
Answer: (c)
56. When did Microsoft begin its business in India?
(a) 1990 (b) 1991
(c) 1995 (d) 1989
Answer: (a)
57. What was the initial name of Apple Inc.?
(a) Apple Corporation (b) Apple Computer Inc.
(c) Apple IT Solutions (d) Apple Mac Inc.
Answer: (b)
58. Indane LPG is the product of which corporation in India?
(a) IOCL (b) NTPC
(c) ONGC (d) PGCIL
Answer: (a)
59. By what name are the Education and Stationary products by ITC known in India?
(a) Camel (b) Apsara
(c) Natraj (d) Classmate
Answer: (d)
60. Power System Operation Corporation Limited (POSOCO) is a subsidiary of:
(a) IOCL (b) NTPC
(c) ONGC (d) PGCIL
Answer: (d)
61. ‘My customer First’ is the Vision of which Bank?
(a) SBI (b) Axis Bank
(c) HDFC Bank (d) Bank of Baroda
Answer: (a)
62. What is the Global banking platform by Edge Verve Systems(lnfosys) called?
(a) Mana (b) Finacle
(c) Skava (d) Panaya Cloud Suite
Answer: (b)
63. Which of the following is not a subsidiary of NTPC?
(a) Kanti Bijlee Utpadan Nigam Limited
(b) Patratu Vidyut Utpadan Nigam Limited
(c) Bhartiya Rail Bijlee Company Limited
(d) Kalinga Bidyut Prasaran Nigam Private Limited
Answer: (d)

CHAPTER 4 GOVERNMENT POLICIES FOR BUSINESS

GROWTH
TOPIC NOT YET ASKED BUT EQUALLY IMPORTANT FOR EXAMINATION
1. Gradual decrease in government command and control over the economic policies is
(a) Privatization (b) Globalization
(c) Demonetization (d) Liberalization
Answer: (d)
2. Taking off restrictions on export and import of goods and services is
(a) Privatization (b) Globalization
(c) Consolidation (d) Liberalization
Answer: (b)
3. Transfer of government ownership to private hands is
(a) Privatization (b) Globalization
(c) Demonetization (d) Liberalization
Answer: (a)
4. Chanakya authored the book
(a) Chanakyashastra (b) Kautilyashastra
(c) Arthashastra (d) Bhumishastra
Answer: (c)
5. David Easton propounded a model on politics policy relationship known as __________
model.
(a) Black Box (b) White Box
(c) Red Box (d) Blue Box
Answer: (a)
6. GST was implemented in India with effect from
(a) 01.01.2017 (b) 01.04.2017
(c) 01.07.2017 (d) 01.08.2017
Answer: (c)
7. Public policies are always __________ oriented.
(a) Goal (b) Welfare
(c) Finance (d) GDP
Answer: (a)
8. __________ policies curtail all benefits in some particular issue.
(a) Restrictive (b) Regulatory
(c) Facilitating (d) Financial
Answer: (a)
9. __________ model of Government has a strong private sector.
(a) Communistic (b) Mixed
(c) Capitalist (d) Autocratic
Answer: (c)
10. practices regulate the activities of a particular sector of economy.
(a) Restrictive
(b) Regulatory
(c) Facilitating
(d) Operational
Answer: (b)
11. OCB stands for
(a) Operational Corporate Body
(b) Operational Company Board
(c) Overseas Corporate Bodies
(d) Overseas Company Board
Answer: (c)
12. Selling of shares of Public Sector Enterprises to public is
(a) Disinvestment (b) Amalgamation
(c) Demonetization (d) Merger
Answer: (a)
13. FDI Stands for
(a) Foreign Direct Interest (b) Foreign Direct Investment
(c) Free Domestic Investment (d) Free Domestic Interest
Answer: (b)
14. FDI is prohibited in India in
(a) Fast Food (b) Mobile Phones
(c) Atomic Energy (d) Thermal Power
Answer: (c)
15. FII stands for
(a) Foreign Indirect Investors
(b) . Foreign Interest Investment
(c) Foreign Institutional Interest
(d) Foreign Institutional Investors
Answer: (d)
16. FEMA replaced FERA as legislation in:
(a) 1991 (b) 1992
(c) 1999 (d) 2006
Answer: (c)
17. The form of privatization, where government keeps hold of responsibility and private
enterprise handles the management of it fully or partly is known as:
(a) Disinvestment (b) Deregulation
(c) Delegation (d) Decentralization
Answer: (c)
18. A __________ emanates from decision and decision is taken in line with __________.
Identify the right expression to fill in the blanks
(a) Policy ; Goal (b) Budget; Plan
(c) Plan; Budget (d) Goal; Plan
Answer: (a)
19. In order to take a decision, there must be __________ course of action. Fill in the blank
space with appropriate expression.
(a) One (b) Specific
(c) Financial (d) More than one
Answer: (d)
20. The method of FDI other than Automatic route is called :
(a) NRI Route (b) Government Route
(c) Institutional Route (d) Priority Route
Answer: (b)
21. Hyundai India Limited came to India through the FDI route. It followed the path of:
(a) Divestment in Public Sector Unit
(b) Joint Venture
(c) By creating a 100% Indian subsidiary
(d) Replacement of a government sector business
Answer: (c)

CHAPTER 5 ORGANIZATIONS FACILITATING BUSINESS

TOPIC NOT YET ASKED BUT EQUALLY IMPORTANT FOR EXAMINATION
1. POC stands for
(a) Plan of Communication (b) Plan of Contract
(c) Point of Contract (d) Non of the above
Answer: (c)
2. A business __________ helps a budding business to quickly launch a product and put it in
fast lane of commercial success.
(a) Accelerator (b) Consultant
(c) Incubator (d) Manager
Answer: (a)
3. RBI was established on
(a) 01.04.1934 (b) 01.04.1935
(c) 01.04.1936 (d) 01.04.1937
Answer: (b)
4. __________ is responsible for monetisation of economy in India.
(a) Central Government (b) RBI
(c) SBI (d) World Bank
Answer: (b)
5. The rate at which banks borrow money from the RBI against pledging of government
securities.
(a) Interest Rate (b) Bank Rate
(c) Repo Rate (d) Reverse Repo Rate
Answer: (c)
6. SLR & CRR are __________ measures of credit policy.
(a) Qualitative (b) Quantitative
(c) Backward (d) Forward
Answer: (b)
7. SEBI Act came into force from
(a) 1.1.1992 (b) 1.4.1992
(c) 30.1.1992 (d) 30.4.1992
Answer: (c)
8. __________ protects businesses from other businesses’ unfair practices and penalises
the erring entities.
(a) CCI (b) SEBI
(c) Central Government (d) RBI
Answer: (a)
9. Section __________ of IRDAI Act, 1999 lays down duties; powers and functions of IRDAI.
(a) 12 (b) 13
(c) 14 (d) 15
Answer: (c)
10. IFCI was established in
(a) 1945 (b) 1948
(c) 1951 (d) 1953
Answer: (b)
11. SIDBI was established as a wholly owned subsidiary of
(a) IDBI (b) IFCI
(c) UTI (d) SBI
Answer: (a)
12. SIDBI was set up in
(a) 1990 (b) 1991.
(c) 1995 (d) 1997
Answer: (a)
13. __________ regulates the co-operative banks and RRBs.
(a) RBI (b) SBI
(c) Central Government (d) NABARD
Answer: (d)
14. NABARD has its head office at
(a) New Delhi (b) Kolkata
(c) Mumbai (d) Chennai
Answer: (c)
15. EXIM Bank was set up in
(a) 1982 (b) 1983
(c) 1984. (d) 1985
Answer: (a)
16. Under __________ competition, product that perform. The same function compete
against each other.
(a) Functional (b) Vertical
(c) Direct (d) Indirect
Answer: (c)
17. Where can the first appeal against SEBI be made?
(a) High Court
(b) Supreme Court
(c) Securities Appellate Tribunal
(d) RBI
Answer: (c)
18. Which of the following statements about RBI is incorrect?
(a) It deals largely with Governments, Central and State Banks.
(b) Its role is to ensure monetary stability, including stability of domestic price levels.
(c) One of its missions is to protect the interest of policyholders.
(d) The RBI is the sole authority for the issue of currency in India.
Answer: (c)
19. The Industrial Finance Corporation of India(IFCI) was established in which year?
(a) 1945 (b) 1946
(c) 1947 (d) 1948
Answer: (d)
20. Which of the following is a direct beneficiary of IFCI?
(a) Agro-based industry
(b) Service industry
(c) Capital & intermediate goods industry
(d) All of the above
Answer: (d)
21. Where is the headquater of NABARD?
(a) Mumbai (b) Delhi
(c) Gurugram (d) Benlgaluru
Answer: (a)
22. __________ is an Indian Development Bank.
(a) RBI (b) SEBI
(c) SIDBI (d) IRDA
Answer: (c)
23. SEBI has its Western Regional Office in:
(a) Pune (b) Mumbai
(c) Ahmedabad (d) Surat
Answer: (c)
24. SEBI has several functions rolled into one body. Which one of the following is not the
function of SEBI?
(a) Quasi-legislative (b) Quasi-judicial
(c) Quasi-professional (d) Quasi-executive
Answer: (c)
25. The RBI has been vested with extensive power to control and supervise commercial
banking system under the:
(a) Reserve Bank of India Act, 1934.
(b) The Banking Regulation Act, 1949.
(c) Both (a) and (b).
(d) None of the above.
Answer: (c)
26. Who is the custodian of the nation’s foreign exchange reserves?
(a) Central Government of India
(b) President of India
(c) Reserve Bank of India
(d) State Bank of India
Answer: (c)
27. NABARD refinances the financial institutions which finances the __________.
(a) Urban sector (b) Rural sector
(c) Secondary sector (d) Service sector
Answer: (b)
28. NABARD is the most important institution in the country which looks after the
development of the __________.
(a) Cottage industry (b) Small industry
(c) Village industry (d) All of the above.
Answer: (d)

CHAPTER 6 COMMON BUSINESS TERMINOLOGIES