Assertion Reasoning

BUSINESS STUDIES
Chapter-4 : Planning
ASSERTION REASON TYPE QUESTIONS
Sl.No. Question
1 Assertion (A): Planning is futuristic. Reason

(R): In planning process an attempt is made to peep into the future.
(A) Both Assertion(A) and Reason(R) are True and Reason(R)is the correct explanation
of (A)
(B) Both Assertion(A) and Reason(R) are True and Reason(R)is not the correct
explanation of(A)
(C) Assertion(A) is True but Reason(R) is False
(D) Assertion(A) is False but Reason(R) is True
2 Assertion (A): Sometimes planning fails in spite of the best efforts of Management.
Reason(R): while planning assumptions are to be taken for future which is uncertain. A.
Both A & R are false
B. Both A & R are true
C. A is true but R is False
D. A is false but R is true
3 Assertion (A): Planning is a continuous process as it involves series of steps Reason(R):

Each and every step is necessary to be performed in planning process.
of (A)
explanation of(A)
4 Assertion (A) Planning does not guarantee success.
Reason(R) It is a tool to be used with caution as It provides a base for analyzing future
courses of action.
A. Both A and R are true and R is the correct explanation of A.
B. Both A and R are true and R is not the correct explanation of A.
C. A is true but R is false.
5. Assertion (A): Plans once made they are irreversible in nature as so much resources being
utilized to make them.
Reason(R): Making of plans involves huge cost.
of (A)
explanation of(A)
KVS ZIET BHUBANESWAR 26/10/2021 1

ANSWER KEY : ASSERTION REASON TYPE QUESTIONS
1. (A)
2. (B)
3. (D)
4. (B)
5 (A)
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BUSINESS STUDIES
Organising
Chapter-5
Sl.No. Question
Assertion(A): Authority determines the superior subordinate relationship wherein the
1. superior communicates his decision to the subordinate, expecting compliance from
him and the subordinate executes the decision as per the guidelines of the superior.
Reason (R): Accountability is the obligation of a subordinate to properly perform the
assigned duty
(A) Both Assertion and reason are true and reason is correct explanation of assertion.
(B) Assertion and reason both are true but reason is not the correct explanation of
assertion.
(C) Assertion is true, reason is false.
(D) Assertion is false, reason is true.
2. Assertion (A): Delegation helps a manager to extend his area of operations as without
it, his activities would be restricted to only what he himself can do.
Reason (R): A manager, no matter how capable he is, cannot manage to do every task
on his own. The volume of work makes it impractical for him to handle it all by
himself
assertion.
3. Assertion (A): Delegation does not mean abdication.
Reason (R): A manager is under obligation to perform the delegated task.
assertion.
4. Assertion (A): Decentralization must always be balanced with centralisation in areas
of major policy decisions.
Reason (R): Decentralization recognises the decision maker's need for autonomy. The
management, however, needs to carefully select those decisions which will be pushed
down to lower levels and those that will be retained for higher levels.
assertion.
5. Assertion (A): Decentralization should be applied with caution by the top
management.

Reason (R): It can lead to organizational disintegration if the departments start to
operate on their own guidelines which may be contrary to the interest of the
organization.
assertion.
6. Assertion: In an Organisation, sales and advertisement activities are grouped under
marketing department.
Reason: This is because organizing calls for departmentalization as it facilitates

specialization.
(A) Both Assertion and reason are true and reason is correct explanation of
assertion.
assertion.
7. Assertion: In industries like Bata, Maruti Udyog etc. all related and similar functions
are grouped in one department and under one executive.
Reason: These industries follow the divisional structure.
assertion.
assertion.
8. Assertion: In organisation which follow policy of decentralization, management can

concentrate on important policy decisions, like strategic planning, major policy
formulation etc.
Reason: Decentralization reduces the need for direct supervision as subordinates are
given freedom to act and decide within the limits.

assertion.
assertion.
9. Assertion: An organisation can never be completely centralized or decentralized.
Reason: Complete centralization would obviate the need for management hierachy
and complete decentralization would obviate the need for higher managerial
positions. Both scenarios are unrealistic.
assertion.
assertion.
10. Assertion: Delegation does not help in employees’ development.
Reason: Delegation does not provide much scope for development of those skills of
employees which will help them to improve their career prospects.
assertion.
assertion.
11 Assertion: Delegation means abdication.

Reason: Manager shall still be accountable for the performance of the assigned
tasks.
assertion.

assertion.
12 Assertion: Delegation considered essential for effective organisation
Reason: manager cannot perform all the work.
A. If both Assertion and Reason are true and Reason is correct explanation of
Assertion.
B. If both Assertion and Reason are true but Reason is not correct explanation of
Assertion.
C. If Assertion is true but Reason is False.
D. If both assertion and Reason are false.
13 Assertion: authority must be equal to responsibility

Reason: Responsibility arrived from authority
Assertion.
Assertion.
14 Assertion: Responsibility flow upward

Reason: Subordinate will always be responsible to his superior
Assertion.
Assertion.
15 Assertion: Delegation is sharing the authority and responsibility between superior

and subordinates.
Reason: Manager pass routine work to the subordinates so they can focus on key
area
Assertion.
Assertion.
16 Assertion: In decentralization there is more freedom of action.

Reason: It is narrow in scope
Assertion.
Assertion.

17 Assertion: A proper organization structure is essential
Reason: It Ensures a smooth flow of communication and better control over the
operations of business unit
assertion.
18 Assertion: Authority can not be delegated
Reason: It arises from formal position
assertion.
19 Assertion: Decentralization is an optional policy decision
Reason: Decentralization is done at the discretion of lower level management
assertion.
20 Assertion: Organising helps in maximum use of human resources in organisation
Reason: Ability and command provided by top management is necessary for
working
assertion.
21 Assertion: Organising promotes specialization
Reason: Every organisation is built on the principle of division of labour and
specialization
assertion.
22 Assertion (A): A proper organisation structure is essential to ensure a smooth flow
of communication and better control over the operations of a business enterprise.
Reason (R): An organisation structure provides the framework which enables the
enterprise to function as an integrated unit by regulating and coordinating the
responsibilities of individuals and departments.
assertion.

23 Assertion (A): The span of management, to a large extent gives the shape to the
organisational structure
Reason (R): Span of management refers to the number of subordinates that can be
effectively managed by a superior
assertion.
24 Assertion (A): Functional structure makes training of employees easier as the focus
is only on a limited range of skills.
Reason (R): Divisional heads are accountable for profits.
assertion.
25 Assertion (A): Departmentalisation facilitates specialisation
Reason (R): Departments can be created using several criteria as a basis for division
of work
assertion.
26
Assertion(A): Identification and division of work is the first step in the process of
organising.
Reason (R): Organising involves identifying and dividing the work that has to be
done in accordance with previously determined plans.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of A
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
27 Assertion(A): Organising provides a clear description of jobs and related duties.

Reason (R): Organising stimulates creativity amongst the managers.
28 Assertion(A): Functional Organization helps in increasing managerial and

operational efficiency and this results in increased profit.
Reason(R): Functional Organization promotes efficiency in utilisation of manpower
as employees perform similar tasks within a department and are able to improve
performance.
29 Assertion(A): Organising helps management in implementing the principle of

initiative among employees.
Reason(R): Organising satisfies the subordinate’s need for recognition and provides
them with opportunities to develop and exercise initiative.
30 Assertion(A): Authority determines the superior subordinate relationship wherein the

superior communicates his decision to the subordinate, expecting compliance from
him and the subordinate executes the decision as per the guidelines of the superior.
Reason(R): Accountability is the obligation of a subordinate to properly perform the
assigned duty.
31 Assertion (A): Delegation is a pre-requisite to the efficient functioning of an

organization.
Reason (R): Delegation enables a manager to use his time on low priority activities.
assertion.
32 Assertion (A): Authority cannot be delegated.
Reason (R): It arises from the formal position.
assertion.
33 Assertion (A): In spite of its benefits decentralisation should be applied with caution.
Reason (R): Decentralisation can lead to its disintegration.

assertion.
34 Assertion (A): In the case of decentralisation there are more chances of information
getting distorted.
Reason (R): During decentralization information doesn’t have to go through long
channels.
assertion.
35 Assertion (A): Decentralisation is an optional policy decision.
Reason (R): Decentralisation is done at the discretion of the lower level of
management.
assertion.
36 Assertion: In organisations which follow policy of decentralization,
management can concentrate on important policy decisions,
like strategic planning, major policy formulation etc.
Reason: Decentralisation reduces the need for direct supervision as

subordinates are given freedom to act and decide within limits.
Choose the correct option:

a) Both Assertion and Reason are correct.
b) Assertion is wrong but Reason is correct.
c) Assertion is correct but Reason is wrong.
d) Both Assertion and Reason are wrong.
37 Assertion: In an organisation, sales and advertisement activities are
grouped under marketing department .
Reasoning: This is because organising calls for departmentalisation as it
facilitates specialization.

d) Both Assertion and Reason are wrong.
38 Assertion: Centralisation and decentralisation is one of the Principles of
the Management.
Reason: Centralisation means decision making authority with the top
management.

d) Both Assertion and Reason are wrong
39 Assertion: Formal organisation provides stability to the organisation.
Reasoning: There are specific rules to guide the employees
so, their behavior can easily be predicted.

40 Assertion: An organisation can never be totally centralised or
decentralized .
Reason: Complete centralization or decentralization is relevant for
an organisation .

41 Assertion: Delegation does not help in employee development.
Reasoning: Delegation does not provide much scope for development
of those skills of employees which will help them to
improve their career prospectus.

42 ASSERSION: A Wider span of management results in flat structure of organisation.
REASON: As the span of management increases in an organisation, the number of
levels of management in the organisation decreases.
(a) Both assertion and reason are correct and reason is correct explanation of
assertion
(b) Both assertion and reason are correct but reason is not the correct
explanation of Assertion
(c) Assertion is correct but reason is not correct
(a) Assertion is wrong but reason is correct
43 ASSERTION: organising leads to optimum utilization of authority.
REASON: It ensures proper allocation of jobs and minimizing the wastage of
Resources and efforts.

assertion
(b) Both assertion and reason are correct but reason is not the correct
(d) Assertion is wrong but reason is correct
44 ASSERTION: Organising leads to specialisation.
REASON: organising ensures systematic allocation of jobs amongst the workforce.
assertion
(b) Both assertion and reason are correct but reason is not the correct explanation of
assertion
(d) Assertion is wrong but reason is correct
45 ASSERTION (A): The superior-subordinate relation is clearly defined in organising.
REASON (R): Each manager knows very clearly to whom he can give orders and
from whom he has to receive orders.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct
explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
46 ASSERTION (A): The first step in the process of organizing involves identifying
dividing the work.
REASON(R): Once work has been divided in to small and manageable activities
then those activities which are similar in nature are grouped together called
departments.
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the
correct explanation of Assertion (A)
(c.) Assertion (A) is True but Reason (R) is False.
(d) (A) is False but Reason (R) is True.

Q. No ANSWER KEY : Assertion(A) & Reason(R)
1 C
2 A
3 C
4 A
5 A
6 (A)
7 (C)
8 (A)
9 (A)
10 (D)
11 (B)
12 A
13 B
14 A
15 A
16 C
17 (A)
18 (D)
19 (C)
20 (B)
21 (D)
22 (A)
23 (B)
24 (B)
25 (A)
26 A
27 B
28 A
29 A
30 C
31 C
32 D
33 A
34 D
35 C
36 a
37 a
38 a
39 a
40 c
41 d
42 A
43 A
44 A
45 A
46 A
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UNIT 6 STAFFING
Q. Question
No.
Assertion:……………………………………………
Reason: ………………………………………………
assertion.
(B) Assertion and reason both are true but reason is not the correct explanation
of assertion.
1. Assertion(A): Staffing involves manning the organisational structure.

Reason(R): It involves not only recruitment but also subsequent development of
persons within the organisation.
A. Both (A) and (R) are correct, and (R) is the correct explanation of (A).
B. Both (A) and (R) are correct, but (R) is not the correct explanation of (A).
C. (A) is correct, but (R) is not correct.
D. (A) is wrong, and (R) is correct
2. Assertion (A): The staffing function has assumed greater importance these days
Reason( R): Rapid advancement of technology, increasing size of organization
and complicated behaviour of human beings
D. (A) is wrong, and (R) is correct.

3. Assertion (A): staffing improves job satisfaction and morale of employee
REASON (R): the responsibility of all managers to directly deal with and select
people to work for the organisation
4. Assertion (A) Human resource management has replaced the traditional concept
of labour welfare and personnel management
Reason (R ) Human Resource Management (HRM) in its present form has
evolved from a number of significant inter-related developments
5. Assertion (A) The foundation of any organisation is the talented and

hardworking people, who are the principal assets of any firm. It is an established
fact that the growth of an organisation requires he continual infusion of quality
staff
Reason (R) adequate staffing or the provision for appropriate human resources is
an essential requirement for any organisation’s success.
6 For the following two statements choose the correct statement.

Statement I: Staffing is the most sensitive function of management.
Statement II: Staffing is the part of selection.
Choose the correct option from the options given below:
(a). Statement I is correct but statement II is wrong.
(b). Statement I is correct but statement II is wrong.
(c). Both the statements are correct.
(d). Both the statements are incorrect.

Statement I: Training enhances one’s skill to perform a specific job.
Statement II: Vestibule training is one of the off the job training method.

Statement I: Estimating the manpower requirement is the first step of staffing.
Statement II: Selection is followed by recruitment as a step of staffing process.
9 Assertion (A): Staffing is the process of filling and keeping filled the job
positions in an organization.
Reason (R): Staffing always takes care of vacancy due to death of an employee,
retirement, etc. hence it always keeps the job positions filled up to optimum
level.
In the context of above two statements, which of the following is correct?
(A). Assertion (A) and Reason (R) are correct but the Reason (R) is not the
correct explanation of Assertion (A).
(B). Both, Assertion (A) and Reason (R) are correct and Reason (R) is the
(C). Assertion (A) is correct but Reason (R) is not correct.
(D). Both the Assertion (A) and Reason (R) is incorrect
10 Assertion (A): Recruitment is the process of searching prospective employees of

the organization.
Reason (R): Recruitment is always a negative process as it focuses on rejection
of employees.

11 Assertion (A): When the employees are trained they are performing the job then
it is known as on the job training method.
Reason (R): Vestibule training is on the job training method.
12 Assertion: Training is job oriented.

Reason: Training helps in developing skills for performing job.
assertion.
of assertion.
13 Assertion: Training leads to higher productivity.

Reason: Trained personnel require less supervision.
assertion.
of assertion.
14 Assertion: Training increases employees earning.
Reason: Training Increases supervision
assertion.
of assertion.
15 Assertion: Development is career oriented.

Reason: Development is a continuous activity.
assertion.
of assertion.

16 Assertion: Vestibule training is off the job method.
Reason: employees learn their job on the equipments which are replica of actual
workplace.
assertion.
of assertion.
Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason
(R). Mark the correct choice as:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.
17.Assertion (A): Internal recruitment simplifies the process of selection and placement. Reason (R):
Filling vacancies in higher jobs from within the organisation motivates the employees to improve their
performance through learning and practice.
18 Assertion (A): Advertisement is an external source of recruitment. Reason (R): Advertisement gives the
management a limited range of candidates from which to choose.
19 Assertion (A): Trade tests are used to know the pattern of interests or involvement of a person. Reason (R):
Selection test is a mechanism that attempts to measure certain characteristics of individuals.
20 Assertion (A): Training helps the employees in promotion.

Reason (R): Training is a process of increasing knowledge and skills of employees.
21 Assertion (A): Staffing ensures the continuous survival and growth of the enterprise through the
succession planning for managers.
Reason (R): The function of staffing enables the manager to filling and keeping filled the
positions in the organisation structure.
22 Assertion: Transfer and Promotion are two sources of internal recruitment.
Reasoning: On the job and Off the job are two methods of training
(B) Assertion and reason both are true but reason is not the correct explanation of assertion.

23 Assertion: Recruitment is treated as positive step of staffing process.
Reasoning: It is an invitation to apply for the post by general public.
24 Assertion: Workload analysis would enable an assessment of the number and types of human
resources necessary for the performance of various jobs and accomplishment of
organisational objectives.
Reasoning: Workforce analysis would reveal the number and type available.
25 Assertion: Apprenticeship programmes put the trainee under the guidance of a master worker.
Reasoning: These are designed to acquire a higher level of skill.
26 Assertion: In vestibule training method employees learn their jobs on the equipment they will be
using, but the training is conducted away from the actual work floor.
Reasoning: Vestibule training is an on the job training method.
27 Assertion(A): Staffing involves manning the organizational structure.
Reason(R): It involves not only recruitment but also subsequent development of persons within the
organization.
a) Both (A) and (R) are correct and (R) is correct explanation of (A).
b) Both (A) and (R) are correct and (R) is not correct explanation of (A).
c) Assertion(A) is correct, but (R) is not correct.
d) Assertion(A) is not correct, but (R) is correct.
28 Assertion(A): Staffing is most fundamental and critical drive of organizational performance.

Reason(R): Human resources are the foundation of any business the right people can help to make a
business to the top the wrong people can break the business.
29 Assertion(A): Staffing is a continuous process.

Reason(R): New jobs may be created and some of the existing employees may leave the
organization.
30 Assertion(A): Advertisement is an internal source of recruitment.

Reason(R): Advertisement gives the management a wider range of candidates from which to choose.
31 Assertion(A): Internal recruitment simplifies the process of selection and placement.

Reason(R): Filling vacancies in higher jobs from within the organization motivates the employees to
improve their performance through learning and practices.
32.ASSERTION(A): Selection is process to discover most promising and most suitable candidate
for the organization.
REASON(R): selection tests are the only measure to identify the most suitable candidate.
a) Both (A) and (R) are true and (R) is correct explanation of (A)
b) Both (A) and (R) are true but (R) is not correct explanation of (A)
c) (A) is true but (R) is false
d) (A) is false but (R) is true
33 ASSERTION(A): Selection is process to discover most promising and most suitable candidate
for the organization.
REASON(R): selection tests are one of the measure to identify the most suitable candidate.
34 ASSERTION(A): Vestibule school is an off-the-job training program
REASON(R): A dummy model of machinery is prepared and instead of using original machinery

employees are trained on dummy model.
35 ASSERTION(A): Training equips the employees with the required skill to perform the job.
REASON(R): Training may be provided on-the-job and off-the-job
36 ASSERTION(A): Training equips the employees with the required skill to perform the job.
REASON(R): Training boost up the morale of the employees.
Question
a. Both Assertion(A) and Reason(R) are true and reason is correct explanation of assertion.
b. Assertion(A) and Reason(R) both are true but reason is not the correct explanation of assertion.
c. Assertion(A) is true, Reason(R) is false.
d. Assertion(A) is false, Reason(R) is true
37 Assertion: selection process involves judgement about the performance potential of a candidate
Reasoning: the effectiveness of the selection process is tested in terms of, on the job performance of
the selected candidate.
38 .Assertion: Training is a much broader term than Development

Reasoning: Development covers those activities which improve job performance and bring about
growth of the personality of employees
39 Assertion: In certain jobs the candidates are required to undergo medical fitness test
Reasoning: The job offer is given to the candidate who is declared medically fit
40 Assertion: When a job seeker wants to apply for a job, he /she is first of all asked to sign the
document called Contract of Employment
Reasoning: Few information that is included in Contract of Employment are Job Title, Duties,
Responsibilities, Leave rules etc
41 Assertion: on the job method of training is learning while doing
Reasoning the employee actually works at the workplace and gradually improves his performance
by learning from his own mistakes

ANSWER KEY : Assertion Reason Questions
Q.No. Answer
1. (B)
2. (A)
3. (B)
4. (B)
5. (A)
6 (a). Statement I is correct but statement II is wrong.
7 (c). Both the statements are correct.
8 (c). Both the statements are correct.
9 (B). Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation
of Assertion (A).
10 (C). Assertion (A) is correct but Reason (R) is not correct.
11 (C). Assertion (A) is correct but Reason (R) is not correct.
12 (A)
13 B
14 C
15 B
16 A
17 A
18 C
19 D
20 A
21 A
22 (B) Assertion and reason both are true but reason is not the correct explanation of assertion.
23 (A) Both Assertion and reason are true and reason is correct explanation of assertion.
26 (C) Assertion is true, reason is false.

27 Answer: b) Both (A) and (R) are correct and (R) is not correct explanation of (A).
28 Answer: a) Both (A) and (R) are correct and (R) is correct explanation of (A).
30 Answer: d) Assertion(A) is not correct, but (R) is correct.
32 1 a
33 2 d
34 3 a
35 4 d
36 5 a
37 C
38 B
39 A
40 A
41 B
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BUSINESS STUDIES
CLASS XII
CHAPTER 1
NATURE AND SIGNIFICANCE OF MANAGEMENT
ASSERTION REASONING QUESTIONS

1 Assertion : Efficiency aims at performing tasks with the least wastage of time and effort.
Reason : Efficiency is about doing the job in a cost-effective manner, i.e., getting
maximum output with minimum input..
A) Both Assertion (A) and the Reason (R) are true and Reason (R) is the correct
B) Both Assertion (A) and the Reason (R) are true and Reason (R) is not the correct
C) Assertion (A) is true but the Reason (R) is False.
D) Assertion (A) is false but Reason (R) is True
2 Assertion : Management is an exact science.

Reason : Management deals with complex human behavior, which cannot be determined
with accuracy.

Assertion : Management is an intangible force.
Reason :Management has to adapt itself to its changing external environment, which
consists of various social, economic and political factors.
4 Assertion : Management is group activity.

Reason : Every member of a firm joins the organization with a different purpose and
work towards the achievement of personal goals and not organizational goals.
5 Assertion(A): The process by which a manager synchronises the activities of different

departments is known as coordination.
Reason(R): Coordination is the force that binds all the other functions of
management.
(a) Both Assertion and Reason are true and Reason is the correct explanation of
Assertion.
(b) Both Assertion and Reason are true but Reason is not the correct explanation
of Assertion.
(c) Assertion is true but Reason is false
(d) Assertion is false but Reason is true
6 Assertion (A): The outcomes of experiments at managerial level are not capable of being
accurately predicted or replicated. Reason
(R): Management deals with human beings and human behaviour.

Assertion.
(b) Both Assertion and Reason are true but Reason is not the correct
explanation of Assertion.
7 Assertion (A): Coordination is a voluntary binding force between individuals and
departments. Reason (R): Coordination gives a direction to the willing spirit.
Assertion.
of Assertion.
8 Assertion(A): Organising is the management function of assigning duties, grouping tasks,

establishing authority and allocating resources required to carry out a specific plan.
Reason (R): It decides who will do a particular task, where it will be done, and when
it will be done.
Assertion.
of Assertion.
9 Assertion (A): There is need of coordination because of functional differentiations.

Reason (R): All individuals differ in their habits of work, background,
approaches to situations and relationships and they have their individual goals
Assertion.

of Assertion.
10 Assertion (A): Management as an art and science are not mutually exclusive, but
complement each other.
Reason (R): Managers work better if their practices are based on principles of
management.
assertion.
assertion.
11 Assertion (A): Through management, the personnel objectives can be achieved.

Reason (R): Management helps provide good quality products, create employment
opportunities and adapt new technologies.
assertion.
assertion.
13 Assertion (A): Coordination is a voluntary binding force between individuals and

departments.
Reason (R): Coordination gives a direction to the willing spirit.
assertion.
assertion.

14 Assertion (A): Management does not meet the exact criteria of a profession.
However, it does have some of the features of profession.
Reason (R): The entry in the management profession is restricted through acquiring
a degree of MBA from any institute but there is no professional association to
regulate the managers.
assertion.
assertion.
15 Assertion -In any organisation coordination is required so that production and

salesdepartment can work hand in hand.
Reason-
Coordination integrates group efforts.
assertion.
assertion.
16 Assertion (A): Management as an art and science are not mutually exclusive, but
complementeach other.
Reason (R): Managers work better if their practices are based on principles of
management.Find the correct option:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

17 Assertion (A): Principles of management are mainly behavioural in nature.
Reason (R): As human behaviour is very complex and dynamic in nature,
management principles do not aim to influence such unpredictable behaviour.
explanation of Assertion (A).
18 Assertion (A): Through management the personnel objectives can be achieved.

Reason (R): Management helps to provide good quality products, create
employment opportunities andadapt new technologies.Find the correct option:
19 Assertion (A): The activities of each department need to be linked through

coordination.
Reason (R): Specialists usually think that they only are qualified to evaluate,
judge and decide according totheir professional criteria.Find the correct option:

20 Assertion (A): Management is an full-fledged profession
Reason (R): It involves use of theoretical knowledge: It is a personalised concept:
It involves practice and creativity
(A) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct
(B) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct
explanation of
Assertion (A)
(C) Assertion (A) is True but Reason (R) is False.
(D) Assertion (A) is False but Reason (R) is True.
21 Assertion (A): Management is not a pure science.

Reason (R): (a) Management has a compulsory and systematised body of
knowledge, is based on observation and experimentation, has universally validity
explanation of
Assertion (A)
22 Assertion (A): Management is termed as a Group Activity.

Reason (R): Every member of a firm joins the organisation with a different purpose
and work towards achievement of personal goals and not organisational goals.

23 Assertion (A): Management is termed as a 'Process.
Reason (R): Management involves a series of inter-related functions, such as
planning, organising, staffing, directing and controlling.
explanation of
Assertion (A)
24 Assertion (A): Management is an activity which is necessary

wherever there is a group of people working
in the organisation.
Reason(R):People in an organisation are performing diverse
tasks but they are working towards the same goal.
(A) Both Assertion(A) and Reason(R) are true and

Reason(R) is the correct explanation of
Assertion(A).
(B) Both Assertion(A) and Reason(R) are true and Reason(R) is not the correct
explanation of Assertion(A).
(C) Assertion(A) is true but Reason(R) is false.
(D) Assertion(A) is false but Reason(R) is true.
25 Assertion (A): Management is concerned with the efficient

use of input resources , such as money,
material, equipment, and persons.
Reason(R):It reduces cost and ultimately lead to higher
profits.
(A) Both Assertion(A) and Reason(R) are true and Reason(R) is the correct
(D) Assertion(A) is false but Reason(R) is true

26 Assertion (A): Management has features of both art and
science .
Reason(R):The practice of management is an art. However
manager can work better if practice is based on
principles of management.
27 Assertion (A): In order to be successful , an organisation

must change itself and its goals according to
the needs of the environment.
Reason(R): Management is a dynamic function
28 Assertion (A):The entry to a profession is not restricted

through an examination or through acquiring
an educational degree
Reason(R):There is restrictions on anyone being appointed
as a manager in any business enterprise.

29 Assertion (A): Coordination is all pervasive.
Reason (R): It is required at all levels and in all departments because of

Interdependence of various activities.
A.. Both Assertion (A) and Reason (R) are True and Reason
(R) is the correct explanation of Assertion (A)
B.Both Assertion (A) and Reason (R) are True and Reason (R) is
not the correct explanation of Assertion (A)
C .Assertion (A) is True but Reason (R) is False.
D.Assertion (A) is False but Reason (R) is True.
30 Assertion (A): Management is called an Inexact Science.
Reason (R): Management deals with complex human behavior, which cannot
be determined with accuracy.
A. Both Assertion (A) and Reason (R) are True and Reason (R) is the
B. Both Assertion (A) and Reason (R) are True and Reason (R) is not the
C.Assertion (A) is True but Reason (R) is False.
D. Assertion (A) is False but Reason (R) is True.
31 Assertion(A):Social objective of management involve creation

of benefits or economic values to the society.
Reason(R): Now a days ,profit maximization is the only
objective of management alternatives:
A. Both Assertion(A) and Reason (R) are True and

Reason(R) is the correct explanation of Assertion (A).
B. Both Assertion(A) and Reason( R) are True, but
Reason ( R) is not the correct explanation of Assertion
(A).
C. Assertion(A) is True, but Reason(R) is False.
D. Assertion(A) is False, but Reason(R) is true

ANSWER KEY
ASSERTION - REASONING QUESTIONS
1 A
2 D
3 B
4 C
5 A
6 A
7 A
8 C
9 A
10 A
11 B
12 D
13 C
14 C
15 A
16 B
17 C
18 B
19 B
20 D
21 C
22 C
23 A
24 A
25 A
26 A

27 A
28 D
29 A
30 A
31 C
PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI, KOLKATA,

RANCHI, SILCHAR AND TINSUKIA REGIONS.

BUSINESS STUDIES
CLASS XII
CHAPTER 3
BUSINESS ENVIRONMENT

1 Assertion (A): Study of business environment helps in improving performance.
Reason ( R):Enterprise depends on the environment as a source of inputs or
resources and as an outlet of outputs
(A) Both A and R are true and R is the correct explanation of A
(B) Both A and R are true and R is not the correct explanation of A
(C) A is true but R is false
(D) A is false but R is true
2 Assertion (A): Business Environment is largely certain.

Reason ( R):Business Environment keeps on changing in terms of economic
and social environment
3 Assertion (A): Suppliers affect any business directly but political environment
affect it indirectly
Reason ( R):Business Environment is a relative term.It differs from country to
country and region to region.

4 Assertion (A): Now-a-days manufacturers have flexible manufacturing
systems
Reason ( R):The retailers have direct links with suppliers who replenish stock
when needed
5 Assertion (A) Entry of new firms in the market may make an enterprise think afresh
about how to deal with the situations Reason (R) Business environment assist in
planning and policy formulation.
a) Both Assertion(A) and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true but reason (R) is not the correct
(c) Assertion (A) is true but Reason (R) is false
(d) Assertion (A) is false but Reason (R) is true
6 Assertion (A)By scanning the environment businessmen can pioneer of market. (R)
Environment scanning shows the way to tackle the ever changing society.
7 Assertion (A)With the advent of television the cinema and radio industries were
adversely affected(R) Television is capable of functioning of cinema as well as radio
industries more economically from home.

8 Assertion (A) Manufacturers have now flexible manufacturing systems. Reason (R)
Agricultural and industrial production trends are the economic dimensions of the
environment which affect the business environment.
(A) Both Assertion(A) and Reason (R) is the correct explanation of Assertion (A
9 Assertion (A) : Agricultural and industrial production trends affect the business
environment.
Reason (R): Technological environment like agriculture and industrial
production trends have modified the ways to produce and distribute goods
through improved methods and techniques
a. Both Assertion and reason are true and reason is correct explanation of
assertion
b. Assertion and reason both are true but reason is not the correct
explanation of assertion.
c. Assertion is true both reason is false.
d. Assertion is false, reason is true.
10 Assertion : Demand for saree may be fairly high in India whereas it may be
almost non -existent in France
Reason: Business environment consist of numerous interrelated and dynamic
conditions of forces which arise from different force.
assertion
c. Assertion is true both reason is false.

11 Assertion: Business environment is a relative concept
Reason: It does not differ business in same country but differ from country to
country.
(a) If both assertion (A) and reason (R) are true and reason (R) is the correct
explanation of assertion (A).
(b) If both assertion (A) and reason (R) are true, but reason (R) is not the
correct explanation of assertion (A).
(c) If assertion (A) is true, but reason (R) is false.
(d) If assertion (A) is false but reason (R) is true.
12
Assertion:Business environment enables firms to identify threats and warning
signals.
Reason: Environmental awareness helps an organization to identify threats to
its business interest.
explanation of
assertion (A).
(b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct
13 Assertion: Enterprise design policies to arrange the required resources.

Reason: it can convert them into output they desires.
(b) If both assertion (A) and reason (R) are true, but reason (R) is not the correct
14 Assertion: Political environment is related with governments responsibility
towards business.
Reason: Government stability directly affects business scenario in a country.
explanation of
assertion (A).
(b) If both assertion (A) and reason (R) are true, but reason (R) is not the
correct explanation of assertion (A).

15 Assertion: The social environment of business include the social forces like
customs and traditions, values, social trends, society’s expectations from
business etc.
Reason: The forces like customs and traditions, values, social trends,
society’s expectations from business etc. are integral part of society.
assertion.
(B) Assertion and reason both are true but reason is not the correct
16 Assertion (A) Turbulent market conditions, less brand loyalty, Kodivision and
subdivision of market are just a few of the images to describe business
environment.
Reason (R) Business environment is getting dynamic where changes are

taking place at a slow pace.
assertion.
of assertion.
17 Assertion: Regular scanning or monitoring of business environment facilitates

in providing edge over competitors.
Reason: By analysing the environment, swiftly understanding and adopting
the changes in organisational policies and to integrate it with the activities of
business provide an edge over competitors.
(a) Both Assertion and reason are true and reason is correct explanation of
assertion.
(b) Assertion and reason both are true but reason is not the correct
(c) Assertion is true, reason is false.
(d) Assertion is false, reason is true.

18 Assertion: Business environment includes both specific and general forces.
However, manager should be carefull for both forces but give priority or more
focus to specific force.
Reason: If work force of Kapil Pvt. Ltd. Is not satisfied due to unequal
distribution of remuneration, it will affect smooth functioning of the entire
industry and will not affect the functioning of Kapil Pvt. Ltd.
assertion.
19 Assertion: Element of business are co-related or inter-related, a small change

in one factor may lead to change in another factor which may have long term
impact on business.
Reason: As different factors of business environment are inter-related, if there
will be change in import and export policies automatically there will be change
in economic environment.
assertion.

ANSWER KEY : ASSERTION - REASONING QUESTIONS
1 B
2 D
3 B
4 A
5 A
6 A
7 A
8 B
9 C
10 B
11 C
12 A
13 A
14 D
15 A
16 C
17 A
18 C
19 B


BUSINESS STUDIES
CLASS XII
CHAPTER 2
PRINCIPLES OF MANAGEMENT

1 Assertion (A): A tenet of scientific management is cooperation and harmony
between workers and managers.
Reason (R): Taylor believed in participative management.
In the context of the above two statements, which one of the following is correct?
Codes
A. A and R are true and R is the correct explanation of A
B. A and R are true and R is not the correct explanation of A
C. A is true but R is false
2 Assertion (A): The principle of Harmony, Not Discord states that there should be
complete harmony between the management and the workers.
Reason (R): There is no need for a mental revolution.
In the context of the above two statements, which one of the following is
correct?
Codes

3 Assertion (A): Functional foremanship technique divides the work of factory
manager into two sub departments
Reason (R): Functional foremanship develops specialisation .
correct?
Codes
4 Assertion (A): Time study refers to determining the standard time required to
complete a particular activity.
Reason (R): Time study is done to get the estimated figure of labour costs.
In the context of the above two statements, which one of the following is correct?
Codes
5 Assertion (A): Differential piece wage system is a technique which does not
differentiate between efficient and less efficient workers.
Reason (R): Differential piece wage system acts as an incentive for less
efficient workers to be motivated to perform better.
correct?
Codes

6 Assertion: Scientific management is the application of scientific tools, methods
and trained personnel.
Reason: The decisions under scientific management are taken at the wish of
managers to increase the output.
assertion.
of assertion.
(D) Assertion is false, reason is true
7 Assertion: Industrial efficiency depends upon the efficiency of workers.

Reason: Worker’s efficiency depends upon proper training and their selection.
assertion.
of assertion.
8 Assertion: Time study is conducted to determine the standard time required to

determine perform a job.
Reason: The standard time is determined on the basis of the average time
taken by an average worker.
assertion.
of assertion.

9 Assertion: In functional foremanship,Taylor proposed eight specialists foremen,
four each under Planning and Production department
Reason: Time and cost clerk under production incharge prepares time and cost
sheet.
assertion.
of assertion.
10 Assertion: Work study ensures minimum production at maximum cost.

Reason: Work study includes Time study, Motion Study, Method Study and
Fatigue study for getting best contribution.
assertion.
of assertion.
11 Assertion: The principles of management are not rigid like pure science.
Reason: The development of the principles of management is considered science AND
their application, an art.

12 Assertion (A):- The principles of management are flexible.
Reason (R):- The principles of management can be modified by the managers according
to the given situation.
13 Assertion (A):- Time study determines the standard time taken by a workman to
perform a given task.
Reason (R):- It is human tendency that a person feels physically and mentally tired if
he/she is made to work continuously without any rest.
14 Assertion (A):- The entire work is divided into small task/jobs and each task/job is
performed by a trained specialist.
Reason (R):- The intent of division of work is to produce more and better work from
the same effort.

15 Assertion: If the principle of unity of command is not followed, employees may
get confused.
Reason: Unity of command refers to multiple commands received by a
subordinate at a time.
B. Both A and R are true but R is not the correct explanation of A.
D. A is false but R is true.
E. Both A and R are false.
16 Assertion: Principles of management can be modified as per the situation.

Reason: Principles of management are universally applicable
17 Assertion: Division of work leads to specialisation.

Reason: In the principle of division of work, Henri Fayol has suggested division
of work in a random way

18 Assertion: In principle of centralisation and decentralisation, Henri Fayol has
suggested complete centralisation in all types of organisations.
Reason: Centralisation means dispersal of decision making authority
19 Assertion: Employees should be frequently transferred from one place to

another so that they can gain more exposure.
Reasoning: Henri Fayol has given the principle of instability of personnel
20 Assertion: Gang plank permits direct communication between the employees

working in different positions without violating the scalar chain.
Reason: Gang plank is the only approach to be followed for the growth
organization
d) Assertion (A) is False but Reason (R) is True

21 Assertion: The principles of Harmony not discord & concept of Mental Revolution
though appear to be different yet they do convey similar meaning.
Reasoning: The essence of both is the underlying spirit of mutual co-operation.
(A) Both A & R are correct
(B) Both are incorrect
(C) A is correct but R is false
(D) R is correct but A is false
22 Assertion (A) If two employees at the same level are not treated at par by their
superior, it would lead to job dissatisfaction.
Reason (R) Principle of Equity
(a) Both A and R are true. R is the correct explanation of A
(b) Both A and R are true, but R is not the correct explanation of A
(c) A is correct, but R is incorrect
(d) A is incorrect, but R is correct
23 Assertion: According to Division of work the whole work is divided into small
task or unit of work should be assigned to one person according to the capacity,
qualification and experience of the person.
Reason: When a person is performing a part again and again he will become
perfect and get the benefit of specialization.
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the
correct
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the

24 Assertion (A): Taylor gave the concept of scientific management.
Reason (R ) : Taylor was an American Mechnical Engineer who sought to
improve industrial efficiency
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the
(c) Assertion (A) is true and Reason (R) is false
(d) Assertion (A) is false and Reason (R) is true
25 Assertion (A) : Management principles are not as rigid as principles of pure science.
Reason (R ) : Management principles deal with human behaviour.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct
26 Assertion (A): The principles of management should be distinguished from techniques

of management.
Reason (R ) : Techniques are guidelines to take decisions while practicing principles

27 Assertion (A): Principles are guidelines to action.
Reason (R ) : Principles help managers to take decisions while performing functions of
management.
28 Assertion (A) : The principles of management are guidelines to action but do not
provide readymade straitjacket solutions to all managerial problems
Reason (R ) : The real business situations are very complex and dynamic and are a
result of many factors.
29 Assertion(A) : Unity of Command affects the entire organisation adversely.

Reason (R ) : Unity of command prevents dual subordination

30 Assertion (A): A tenet of scientific management is cooperation and harmony
between workers and managers.
Reason (R): Taylor believed in participative management.
correct?
Codes
(A) A and R are true and R is the correct explanation of A
(B)A and R are true and R is not the correct explanation of A
(C)A is true but R is false
(D)A is false but R is true
31 Assertion (A): Standardisation means setting standards for one type of activity
Reason (R): To ensure quality standards
correct?
Codes
32 Assertion (A): the movie camera is used to conduct the motion study.
Reason (R): Motion study is to study the movements those are necessary for
doing a well-defined job/work
correct?
Codes

33 Assertion (A): Differential piece wage system is a technique which does not
differentiate between efficient and less efficient workers.
Reason (R): Differential piece wage system acts as an incentive for less
efficient workers to be motivated to perform better.
correct?
Codes
(A)A and R are true and R is the correct explanation of A
34 Assertion (A): The principle of Science, Not rule of thumb says that we should
not get stuck in a set routine
Reason (R): The principle of science, not rule of thumb, makes the work much
simpler, easier and quicker.
correct?
Codes

ANSWER KEY : ASSERTION - REASONING QUESTIONS
1 C
2 C
3 A
4 A
5 D
6 C
7 B
8 A
9 C
10 D
11 B
12 A
13 B
14 A
15 C
16 B
17 C
18 E
19 E
20 C
21 A
22 A
23 A

24 A
25 A
26 C
27 A
28 A
29 D
30 C
31 D
32 B
33 D
34 A


BUSINESS STUDIES
Chapter-12 : Consumer Protection
1 Assertion(A): Consumer need to be given legal protection against certain trade
practices and business methods.
Reason(R): Protection as per market forces and ‘caveat Emptor’ is not enough
as per perfectly competitive market is an economist’s dream and consumer
sovereignty are a myth.
(a) Both Assertion (A) and Reason (R) are true and Reason(R) is correct
(b) Both Assertion (A) and Reason (R) are true and Reason(R) is not the
(c) Assertion (A) is true but Reason (R) is False
2 Assertion(A): Appeals against state commission can also be filed before

national commission of consumer protection.
Reason(R): consumer protection institution is three tier-structure.
3 Assertion(A): Consumer protection such as NGOs and civil societies ensure
check and balance against ill practices of business.
Reason(R): Consumer protection act 1986, gives legal status to such
organization.
4 Assertion(A): Appeals against the State Commission can also be filed
before the National Commission of consumer protection
Reason (R): Consumer Protection institution is three tier-structure
assertion.
c. Assertion is true, reason is false.
5 Assertion (A): The Consumer Protection Act provides certain rights to
consumers with an objective to protect their interests.

Reason (R): Consumer can buy a product or avail a service without any
responsibility
assertion.
6 Assertion(A): The consumer has the freedom to choose from a variety of
products according to his/her needs and desires from the
market.
Reason(R): The consumer has a right to be protected against goods and
services which are hazardous to health
assertion.
7 Assertion (A): The consumer has a right to get relief in case the product or
service falls short of his or her expectations.
Reason (R): A grieved consumer is entitled to suitable relief under the
Consumer Protection Act.
assertion.
8 Assertion (A): The Consumer Protection Act 1986 makes only seller
responsible.
Reason (R): The consumer has a right to get relief in case the product or
service falls short of his or her expectations.
assertion.
9 ASSERTION (A): Consumers can file their complaint in various court
according to their compensation worth.
REASONING(R): Consumer Protection Act 1986 has provided a Three Tier
Grievances Machinery.
(A)Both Assertion and reason are true and reason is correct explanation of
assertion.
of assertion.

10 ASSERTION (A): A shopkeeper can-not file complaint against producer for
bad quality.
REASONING(R): Consumer is the person who purchase the goods or service
for his own consumption.
(A)Both Assertion and reason are true and reason is correct explanation of
assertion.
of assertion.
11 Assertion: The consumer has a right to be protected against goods and services
which are hazardous to life and health.
Reason: it is the duty of consumer be careful in purchase of goods.
(a) if both (A) and (R) are true.
(b) if both (A) and (R) are false.
(c) if (A) is true.
(d) if (R) is true.
12 Assertion: The consumer has a right to have complete information about the
product he/she intends to buy.
Reason: it comes under the right to seek redressal.

(c) if (A) is true.
(d) if (R) is true.
13 Assertion: The consumer has the freedom to choose from a variety of product
at competitive prices.
Reason: Consumer is said to be king.

(c) if (A) is true.
(d) if (R) is true.
14 Assertion: The consumer has a right to acquire knowledge and to be a well –
informed consumer throughout life.
Reason: consumer has to buy only standardized goods.

(c) if (A) is true.
(d) if (R) is true.
15 Assertion: The consumer has a right to file a complaint and to be heard in
Case of dissatisfaction with a good or a service.
Reason: To file a complaint a consumer must have cash memo/proof of the
goods purchased.

(c) if (A) is true.
(d) if (R) is true.
16 Assertion (A): It is the responsibility of the consumer to buy only standardized
goods as they provide quality assurance.
Reason (R): The consumers have certain responsibilities to follow and should
keep a few things in mind while purchasing goods and services.
(A) Both assertion and reason are true and the reason is the correct explanation
of the assertion.
(B) assertion and reason both are true but reason is not the correct explanation
of assertion.
(C) Assertion is true. Reason is false.
(D) Assertion is false. Reason is true
17 Assertion (A): Right to safety under CPA, 1986 taken from UN convention on
consumer protection.
Reason (R): Right to safety will ensure good quality of products to consumer.
of the assertion.
of assertion.
18 Assertion (A): The Consumer Protection Act, 2019 has not defined the criteria
of Consumer Disputes Redressal Commission (CDRCs). Reason (R): Under the
Consumer Protection Act, 2019 the National CDRC will hear complaints worth
more than 10 crores.
of the assertion.
of assertion.
19 Assertion (A): State Commission to consumer protection is head by a
President, who have been a Judge of High Court.

Reason (R): Consumer Protection Commission is a Quasi-Judicial Body.
of the assertion.
of assertion.
20 Assertion (A): Appeals against the State Commission can also be filed before
the National Commission of consumer protection.
Reason (R): Consumer protection institution is three tier-structure.
of the assertion.
of assertion.
21 Assertion (A): Many enlightened business firms have set up their own
consumer service and grievance cells.
Reason (R): The consumer has a right to file a complaint and to be heard in
case of dissatisfaction with a good or a service.
Make the correct choice as:
(A) Both Assertion and reason are true and Reason is the correct explanation
of Assertion
(B) Both Assertion and Reason are true and Reason is not correct explanation
of Assertion
(C) Assertion is true but Reason is false
(D) Assertion is false but Reason is true.
22 Assertion (A): The Consumer Protection Act 2019 has not defined the criteria
of Consumer disputes redressal commission.
Reason (R): Under the Consumer Protection Act 2019 the National Consumer
Disputes Redressal Commission will hear complaints worth more than Rs. 10
crores.
of Assertion
(B) Both Assertion and Reason are true and Reason is not correct explanation
of Assertion

23 Assertion (A): It is the responsibility of the consumer to buy only standardised
goods they provide quality assurance.
Reason (R): The consumers have certain responsibilities to follow and should
keep a few things in mind while purchasing goods and services.
of Assertion
(B) Both Assertion and Reason are true and Reason is not correct
24 Assertion(A): Appeals against the state commission can also be filed before the
National commission of consumer protection.
Reason (R) : Consumer protection institution is three tier-structure.
(A) Both Assertion and reason are true and Reason is the correct
25 Assertion (A): State commission to consumer protection is head by a President,

who have been a Judge of High Court.
Reason (R): Consumer Protection Commission is a Quasi- Judicial body.
26 Assertion (A): Right to safety under Consumer protection Act 1986 taken from
UN convention on consumer protection.
Reason(R): Right to safety will ensure good quality of products to consumer.

ANSWER KEY
1 (b)Both Assertion (A) and Reason (R) are true and Reason(R) is not the correct
2 (b)Both Assertion (A) and Reason (R) are true and Reason(R) is not the correct
3 (d)Assertion (A) is false but Reason (R) is true
4 A. Both Assertion and reason are true and reason is correct explanation of
assertion.
5 C. Assertion is true, reason is false.
6 B. Assertion and reason both are true but reason is not the correct explanation of
assertion.
7 B. Assertion and reason both are true but reason is not the correct explanation of
assertion.
8 D. Assertion is false, reason is true.
9 (A)Both Assertion and reason are true and reason is correct explanation of assertion.
10 (A)Both Assertion and reason are true and reason is correct explanation of assertion.
11 (a) if both (A) and (R) are true.
12 (b) if both (A) and (R) are false.
16 (A) Both assertion and reason are true and the reason is the correct explanation of
the assertion.
17 (A) Both assertion and reason are true and the reason is the correct explanation of the
assertion.
18 (B) assertion and reason both are true but reason is not the correct explanation of
assertion
19 B) assertion and reason both are true but reason is not the correct explanation of
assertion
20 (D) Assertion is false. Reason is true
21 (A) Both Assertion and reason are true and Reason is the correct explanation of
Assertion
22 (D)Assertion is false but Reason is true.
23 (A) Both Assertion and reason are true and Reason is the correct explanation of
Assertion
24 (D)Assertion is false but Reason is true.
25 (B)Both Assertion and Reason are true and Reason is not correct explanation of
Assertion
26 (C) Assertion is true but Reason is false
PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI, KOLKATA, RANCHI,
SILCHAR AND TINSUKIA REGIONS.

UNIT 6 STAFFING
TRUE FALSE QUESTIONS:
Sl.No. Question
1. Understandingg manpower requirement is merely knowing how many person

one organization needs.
2. Staffing requirements arise only in case of starting a new business.
3. Every candidate/applicant may be recruited in the organization.
4. Selection of an employees helps enhancement of self-esteem.
5. By offering the opportunity for career advancement an organization is able to

attract new talented people.
6 Transfer is an internal source of recruitment.
7 Performance appraisal means evaluating an employee’s current and /or past

performance as against certain predetermined standards.
8 Interest test provides clues to a person’s emptions, reactions, maturity and value
system.
9 Contract of employment is the last step in the process of selection.
10 Aptitude test helps the company to know whether the employees has capacity
and talent to learn in future.
11 Pre-requisite of selection is recruitment.
12 Recruitment is called positive process because more and more people are invited
to apply for the job.
13 Expense on training is a waste.
14 Workforce analysis would reveal whether the organization is under-staffed or

over-staffed.

15 Workload analysis is an assessment of the number and type of employees
required to perform various jobs to achieve organizational objectives.
16 Statement I: Internship training is on the job method of training.

Statement II: Vestibule training is also on the job training.
(a) Statement I is correct and II is wrong
(b) Statement II is correct and I is wrong
(c) Both the statements are correct
(d) Both the statements are incorrect
17 Statement I: Development gives better career prospect.
Statement II: Training helps to increase earning.
18 StatementI: Training is job oriented.
Statement II: Development is also job oriented.
19 Statement I: Development comes under training.
Statement II: Training comes under development.
20 Statement I: Training is imparted for a fixed period.
Statement II: Development is a continuing activity.
21. Promotion of teacher to principal will lead to decrease in responsibilities and salary.
18 Staffing requirements arise only in case of starting a new business

19 Freshly appointed teacher in a Vidyalaya need orientation.
20 The key to success of any organization is right person at the right job position.
21 Recruitment is a negative process.
22 Selection is a negative process.
23 Intelligence test helps to find out how much interest the applicant takes in his work.
24 External recruitment includes transfer and promotion from one department to another.
25 Staffing is last function of management.
26 Internal recruitment is costly and lengthy process.

31 Staffing is ‘putting right people to the right jobs at the right time’.
32 Recruitment refers to the process of finding possible candidates for a job or function.
33 Transfer and promotion are two sources of internal recruitment
34 Internship training involves shifting the trainee from one department to another or from
one job to another.
35 Induction training is a type of training given to help a existing employee.
36 Training and development are synonymous.
37 Spending money on training is waste when we are already spending huge amount in
selection of efficient employees.
38 When a trainee learns under the guidance of a master worker it is called Vestibule school.
39 Freshly appointed people need orientation.
40 Training is essential for existing as well new employees.

ANSWER KEY : True False Questions
Q.No. Answer
1. False
2. False
3. True
4. True
5. True
6 True
7 True
8 False
9 True
10 True
11 True
12 True
13 False
14 True
15 True
16 A
17 C
18 A
19 B
20 C
21 False
22 False

23 True
24 True
25 False
26 True
27 FaLSE
28 False
29 False
30 False
31 True
32 True
33 True
34 False
35 False:
36 False – Different
37 False- it is essential
38 False – Apprenticeship
49 True- Freshly appointed people need orientation/induction
40 True- yes, essential for all
PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI, KOLKATA, RANCHI, SILCHAR AND
TINSUKIA REGIONS.

UNIT 7 DIRECTING

Sl.No. Question
Q1 Assertion:Non-financial incentives cannot be measured in monetary terms
Reason: Employee recognition programs are example for non-financial
incentive
assertion.
Q2 Assertion: Management tries to govern the behaviour ofemployees by
satisfying their needs
Reason: For satisfying various needs, various financial and non-financial
incentives are provided
assertion.
Q3 Assertion:There is human element in directing process
Reason: Management directs individuals to accomplish organizational
objectives
assertion.
Q4 Assertion:Directing flows upward
Reason: Subordinates are been directed by superiors by way of
supervision, motivation, communication and leadership
assertion.
(D) Assertion false, reason is trueis
Q5 Assertion:Directing helps to initiate action
Reason: Supervision is an element of directing
assertion.
(B) and reason both are true but reason is not the correct explanation of
assertion. Assertion
Q6 Assertion-(A)- Democratic leadership is based on decentralization of
authority and responsibility to some extent.
Reason-(R)- In this type of leadership, decisions are taken by the manager
in consultation with the concerned employees.
A.A) and (R) both are correct and (R) is the correct explanation to (A)
B.(A) and (R) both are correct and (R) is not the correct explanation to
(A)
C.(A) is correct but (R) is incorrect
D.(A) is correct and (R) is wrong
Q7 Assertion-(A)- Free-rein leadership style is also described as Individual or
leader Centered Style.
Reason-(R)- As the leaders take little interest in managerial functions and
the subordinates are left with on their own.
A.(A) and (R) both are correct and (R) is the correct explanation to
(A)
(A)
Q8 Assertion (A)- Communication lubricates the entire organization at work
with efficiency.
Reason -(R) -Because communication involves, issues instructions,
coveys goals and targets and also allocates job and responsibilities.
(A)
(A)
Q9 Assertion-(A)- Informal communication is also called Grapevine
communication.
Reason-(R)- Because there is no fixed path or direction for the flow of
information under informal communication.
(A)
(A)
Q10 Assertion -(Assertion)- Democratic or participative leadership style helps
in winning loyalty of the employees.
Reason-(R)-As it increases the cooperation between management and
employees.
(A)
(A)
Q 11 Assertion: Directing is not an important function of management for the
skilled & obedient workers of an organization.
Reason: It is a function of management which initiate action, so that the

work can be started.
assertion.
Q12 Assertion: As per Abraham Maslow ,there are five categories of human
needs on basis of their importance to human being
Reason: These needs follow a particular sequence (Lower level to Higher
level) at the time of fulfillment.
assertion.
Q13 Assertion: The effectiveness and efficiency of a worker to a particular job
increases if a superior assigned him a challenging job.
Reason: The financial incentive which motivate the worker to do a
challenging job more effectively & efficiently
assertion.
Q14 Assertion: Generally a worker eager to do extra works on payment of extra
benefits in case of emergency situation of the organization.
Reason: The extra benefits which can be termed as incentives motivates
the morale of the worker to do extra work
assertion.

Q15 Assertion: As the in-charge of a small scale factory manufacturing
glassware, Hamid guides his subordinates and clarifies their doubts in
performing a task, so that they are able to achieve the work targets given to
them ,all are very happy to work under him.
Reason: hamid is a good & workaholic person and he has keen interest to
complete a work.
assertion.
The question no. 16 to 19 given below consist of an assertion and a reason.
Use the following key to choose the appropriate answer.
A) Both Assertion (A) and Reason (R) are correct statements, and
Reason (R) is the explanation of the Assertion (A).
B) Both Assertion (A) and Reason (R) are correct statements, and
Reason (R) is not the explanation of the Assertion (A).
C) Assertion (A) is true, Reason (R) is false.
Assertion (A) is false, Reason (R) is true.
16 (A) Informal system of communication is generally referred to as the
‘grapevine’.
(R) The informal communication arise out of needs of the employee
exchange their views, which cannot be done through formal channels.
17 (A) Directing flows from top to bottom.
(R) Every manager can direct his immediate subordinate and take
instruction from his immediate boss.
18 (A) Motivation is a complex process.
(R) The Individuals are heterogeneous in their expectations, perceptions
and reactions.
19 (A) Leadership is a process of the behaviour of people towards the
achievement of goal.

(R) Leadership have followers.
20 Assertion: Laissez Faire leadership provide Maximum scope for development of
subordinates
Reason: Strict instructions provided by Leader
(A) Both A and R are individually true, and R is correct explanation of A
(B) Both A and R are individually true, and R is not the correct explanation
of A
(C) A is true but R is False
(D) Both A and R are False
21 Assertion: Laisses Faire ignores the contribution of leader
Reason: Laisses Faire avoids the powers of leader
of A
22 Assertion: To get real feedback of employees the manager must make use of
Reason: The speed of informal communication is very fast
of A
23 Assertion: Urgent matters can be communicated informally
Reason: Informal communication travels very fast
of A

1 (A) Both Assertion and reason are true and reason is correct explanation of
assertion.
assertion
assertion.
4 (D) Assertion false, reason is true is
5 (B) and reason both are true but reason is not the correct explanation of assertion.
Assertion
6 B
7 A
8 A
9 E.
10 E.
11 (D) Assertion is false, reason is true.
assertion.
13 (B) Assertion and reason both are true but reason is not the correct explanation of
assertion.
assertion.
15 (C) Assertion is true, reason is false.
16 B
17 A
18 A
19 B
20 (C) A is true but R is False
21 Both A and R are individually true, and R is not the correct explanation of A
22 (B) Both A and R are individually true, and R is not the correct explanation of A
23 Both A and R are individually true, and R is correct explanation of A


BUSINESS STUDIES CLASS XII
UNIT 8 : CONTROLLING
Sl. Question
No
1 Read the following statements: Assertion and Reason. Choose one of the correct
alternatives given below:
Assertion: Controlling can prevent deviations
Reason: Controlling helps to minimise deviations by taking actions and decisions that
reduce their recurrence.
assertion.
Assertion: Control is exercised at all levels of management
Reason: Controlling is a pervasive function
assertion.
Assertion: Controlling is the first function of the management.
Reason: Controlling brings back the management cycle back to the planning
function.

assertion.
Assertion: Planning is a pre-requisite for controlling.
Reason: Planning provides standards against which actual performance is compared
under controlling.
assertion.
5 Assertion; Controlling is goal oriented

Reason: without controlling business cannot achieve its objectives
assertion.
6 Assertion; Controlling is a continuous process
Reason; Because it involves a constant review of performance
assertion.
7 Assertion: Controlling is both backward and forward looking process
Reason; Because the corrective action initiated by control function aims to improve
future performance
assertion.
8 Assertion;Controlling improve employee motivation

Reason; Controlling gives financial incentive to employees
assertion.
9 Assertion; Controlling takes place on the basis of standard developed by planning
Reason; Controlling and planning both are complimentary to each other
assertion.
Q10 Assertion: Planning is looking ahead whereas controlling is looking back
Reason:Plans are prepared for future and controlling is like a post-mortem of past activities.
Q11 Assertion: An attempt to control everything results in controlling nothing
Reason: Only significant deviations which go beyond permissible limit should b brought to the
notice of management.
Q12 Assertion:Standards are the criteria agaist which actual performance would be measured.
Reason: Standard should be flexible enough to be modified whenever required.
Q13 Assertion: No corrective action is required when the deviations are within acceptable limits.
Reason: Corrective action might involve training of emloyees.
Q14 Assertion: Performance should be measured in the same units in which standards are set.
Reason: This would make their comparision easier.

ANSWER KEY : ASSERTION REASON QUESTIONS:
Q.No 1 – (D)
Q. No 2 – (A)
Q. No 3 – (D)
Q. No 4 – (A)
Q. No 5 – (B)
6A
7A
8C
9A
PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI, KOLKATA, RANCHI, SILCHAR AND TINSUKIA
REGIONS.

Chapter -9: Financial Management
ASSERTION AND REASONING QUESTIONS (ARQ)
1 Assertion: The capital structure of a company is the ratio between the equity capital and debt
capital, which use to maximize the shareholders wealth.
Reason: maximum use of debt fund will maximize the equity shareholder return when the cost of
debt is lower than internal rate of return.
A)Both assertion and reason are true and reason is correct explanation of assertion
B) Both assertion and reason are true but reason is not the correct explanation of assertion
C) Assertion is true, reason is false
D)Assertions is false ,reason is true
2 Assertion: working capital is that fund which is required for financing the day to day
Business activities.
Reason: capital budgeting required for investment made into fixed assets.
3 Assertion: Return on investment is another crucial factor which helps in deciding the capital
structure.
Reason: if the return on investment is more than the rate of investment is less than rate of interest to
be paid on the debt.
4 Assertion: The net working capital refers to the excess of current assets over current liabilities.
Reason: The net working capital can be negative also, when current liabilities exceed current assets
5 Assertion: ROI=EBTI/Total investment
Reason: The objective of financial management is to maximize the profit.
6 Assertion(a): business finance refers to money required in business
Reason(b): money required in business for expansion, diversification
a. b is not right reason
b. a is incorrect but b is right reason
c. Both a and b not correct
d. b is the right reason of a
7 Assertion(a): Wealth maximisation is achieved
Reason(b): judicious of funds
8 Assertion(a): company pays low dividend
Reason(b) : future expansion of business by reinvesting profit
9 Assertion(a): Capital budgeting decision is under investment decision

Reason(b): not affected by future cash flows
10 Assertion(a): financial leverage is possible in deciding capital structure

Reason(b): when cost of debt is more than return on investment
11 Assertion (A): Financial Management refers to branch of Management which is concerned with the
effective acquisition and use of money
Reason (R): Financial Management refers to determination of proportion of Long-term and short-
term Finance.
a. Assertion (A) and Reason(R) are correct but the Reason (R) is not correct explanation of
Assertion(A).
b. Both Assertion(A) and Reason (R) are correct and Reason(R) is the correct explanation
of Assertion(A).
c. Only Assertion (A) is correct.
d. Both assertion(A) And Reason (R) are not correct.
12
Assertion (A): Financial Planning refers to the preparation of financial blueprint of an organisation’s
future operations.
Reason (R) – Financial planning helps in Creating link between Investment and Financing decision.

a. Assertion (A) and Reason(R) are correct but the Reason (R) is not correct explanation
of Assertion(A).
b. Both Assertion(A) and Reason (R) are correct and Reason(R) is the correct
13
Assertion (A)- Wealth maximisation means to increase the capital invested in the business by
shareholders.
Reason(R)- The only objective of financial management is “WEALTH MAXIMISATION”.
of Assertion(A).
14 Assertion (A)- Financial Planning helps in avoiding business shocks and surprises.
Reason(R)- proper provision regarding shortage or surplus of funds is made by anticipating future
receipts and payments.
of Assertion(A).
15 Assertion (A)- investment decision refers to deciding about how the funds are invested in different
assets so that they are able to earn the highest possible return for the investors.
Reason(R)- Assets which are obtained by the business are of two types, i.e., long-term assets and
short-term assets.
of Assertion(A).

16 Assertion: The cheapest source of finance is retained earnings.

Reason: There is no fixed commitment of repayment and no risk involved.
(A) Both Assertion and Reason are true and reason is correct explanation of assertion.
(B) Assertion and Reason both are true but Reason is not the correct explanation of Assertion.
(C) Assertion is true, Reason is false.
(D) Assertion is false, Reason is true.
17 Assertion: The main objective of financial management is to maximise the wealth of equity
shareholder.
Reason: The fulfilment of this objective means other claimants are also gaining
18 Assertion: Financing decisions are also known as capital budgeting decisions.

Reason: Deciding how much to raise from which source is the concern of financing decision.
19 Assertion: Cost involved in issue of securities is known as floatation cost.

Reason: There are two sources of finance viz. owner’s fund and borrowed fund.
20 Assertion: Financial planning ensures availability of funds whenever required.

Reason: Having more fund than that required is good for an organisation.

21 Assertion: The main objective of financial management is to maximize shareholders wealth

Reason : That is maximization of the market value of shares
(A) Both (A) and (R) are true and (R) is the correct explanation of (A)
(B) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(C)(A) is true, but (R) is false
(D) is false, but (R) is true.
22 Assertion: Investment decision deals with quantum of finance to be raised from long term sources
Reason: Investment decision may be long term or short term
( B) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(C ) (A) is true, but (R) is false
(C) (A) is false, but (R) is true.
23 Assertion: Financial planning will forsees entire fund requirement in respect to quantum as well as
timing
Reason: Financial planning cant ensure availability of funds whenever required.
(C ) (A) is true, but (R) is false
24 Assertion: The amount of capital investment in fixed assets is called fixed capital
Reason: Net working capital= current asset-current liability
(C )(A) is true, but (R) is false
25 For the following two statement of Assertion (A) and Reasoning (R) indicate the correct code :
Assertion (A) Financial management process begins with the financial planning and decisions
Reasoning (R) Financial management process does not need feedback system.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true , but R is not the correct explanation of A.
c) A is true ,but R is false.
d) A is false ,but R is true .
Assertion (A) Financial management provide the base for success of promotion.
Reasoning (R) Sound financial plan is very necessary for the success of business enterprise.
Assertion (A) The need for financial planning in a concern can be over -emphasised.
Reasoning (R) Financial planning helps to provide ahead for any more funds ,if required.
Assertion (A) A business firm is usually a profit earning concern.
Reasoning (R) Its earnings depend upon the efficient utilisation of funds .
29 Assertion – The fixed capital decisions involve huge funds and also big risk.
Reason: - The return from fixed capital comes in long run and company has to bear the risk for a
long period of time till the returns start coming.
30 Assertion – The most important criteria to decide the investment proposal is reate of return.
Reason: - The capital budgeting decisions affect the long term growth of the company.
31 Assertion – A companies have investment or growth plans then it would be better to distribute more
in the form of dividend.
Reason: - Companies declare high high rate of dividend only when they have surplus cash.
32 Assertion – A company, Max Ltd., declared higher dividend this year.
Reason: - If tax rate is higher, then company prefers to pay less in the form of dividend whereas if
tax rate is low then company may declare higher dividend.

33 Assertion – Investment decisions must be taken after careful planning and evaluation of all effects
of that decision.
Reason: - Investment decisions can easily be reversed or changed overnight.
ANSWER KEY
ARQ 1-A 2-B 3-A 4-B 5-C 6-d 7-d 8-d 9-d 10-d
11-a 12-a 13-c 14-b 15-b 16-A 17-A 18-D 19-B 20-C
21-A 22-D 23-C 24-B 25 c 26 a 27 d 28 a 29 A 30 B
31 D 32 A 33 C

Chapter 10: Financial Market
1 Assertion: Private placement is the allotment of securities by a company to institutional investors
and some selected individuals.
Reason: Institutional investors resell these securities to the investing public.
2 Assertion: Right is a privilege given to existing shareholders to subscribe to a new Issue of shares
according to the terms and conditions of the company.
Reason: The shareholders are offered the ‘right’ to buy new shares In proportion to the number of
shares they already possess.
3 Assertion: The depository participant (DP) serves as an intermediary between the investor and the
Depositor who is authorised to maintain the accounts of dematerialized shares.
Reason: In India, there are two depositories. National Securities Depositories Limited (NSDL) &
The Central Depository Services Limited (CDSL)
4 Assertion: Registration of brokers and sub- brokers and other players in the market.
Reason: This is Protective function of Securities and exchange board of India
Registration of brokers and sub- brokers and other players in the market.
5 Assertion: The process of holding securities in an electronic form is called dematerialization.
Reason: Dematerialization is mainly done to eliminate problems like theft, fake/forged transfers,
transfer delays and paperwork associated with share certificates or debentures held In physical form.
Registration of brokers and sub- brokers and other players in the market.
6 ASSERTION (A): Money market is more secure in comparison of Capital Market.
REASONING(R): Money Market deals in short term securities which have a maturity period less
than one year.
(A)Both Assertion and reason are true and reason is correct explanation of assertion.
7 ASSERTION (A): Stock Exchange increase confidence of investors as it increase liquidity in
securities.

REASONING(R): Stock Exchange consist of Money Market as well as Capital Market.
(A)Both Assertion and reason are true and reason is correct explanation of assertion.
8 Assertion: Training of intermediaries of the securities market is conducted by SEBI.
Reason: Training leads to development of the stock exchange, so it falls under development
function.
9 Assertion: SEBI is empowered to regulate the working of financial intermediaries.
Reason: SEBI aims to protect the interests of investors.
10 Assertion: NSDL is one of the depository participants in India.
Reason: Stock Exchange serves as an intermediary between the investor and the Depository.
11 Assertion: To open a demat account, PAN is not compulsory.
Reason: PAN stands for Permanent Account Number.
Read the following statements –Assertion (A) and Reason (R) Choose one of the correct
alternatives given below :
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
(c) Assertion (A) is true but Reason ( R) is false

(d) Assertion (A) is true but Reason ( R) is true
Give the answer of question no 12 to 17

12 Assertion (A) Financial market is a market for creation and exchange of financial assets.
Reason ( R) It helps to link savers with the investors and direct available funds into most
productive channels
13 Assertion (A) Government needs short term finance for different projects from money market.
Reason (R) Treasury bills are issued by Reserve Bank of India on behalf of Government of India.
14 Assertion (A) A company is planning to issue equity shares to public as there is boom period in
capital market.
Reason (R) Public prefers to invest in shares during boom period.
15 Assertion (A) For selling securities one has to select broker.
Reason (R) Buying and selling of securities can only be done through registered broker who are
member of stock exchange
16 Assertion (A) Sensex is the Mumbai Stock Exchange Index.
Reason (R ) Nifty is a National Stock Exchange Index
17 Assertion (A) A stock exchange is a reliable barometer to measure the economic condition of a
country.
Reason (R ) Every major change in country and economy is reflected in the prices of shares
18
Direction: In the question given below are two statements labelled at Assertion (A)
and Reason (R). In the context of the two statements, which one of the following is
correct?
Assertion (A): Screen-based trading system cuts down on time, cost and risk of
error as well as on the chances of fraud.
Reason (R): Screen-based trading system electronically matches the buyer and
seller in an order-driven system.
A .Both A and R are true and R is the correct explanation of A
B .Both A and R are true, but R is not the correct explanation of A C .A is true, but R is
false
D .A is false, but R is true
19 Assertion (A): The objective of SEBI is to maintain a balance between statutory
regulations and self regulation.
Reason (R): The objective of the Primary Market Advisory Committee is to
advise SEBI on issues related to the development of primary market in India.
A Both A and R are true and R is the correct explanation of A
B. Both A and R are true, but R is not the correct explanation of A C.A is true, but R is
false

D.A is false, but R is true
20 Assertion (A): The returns on Treasury Bills are not that attractive.
Reason (R): They are zero-risk instruments.
A. Both A and R are true and R is the correct explanation of A
B. Both A and R are true, but R is not the correct explanation of A
C.A is true, but R is false

D.A is false, but R is true
21 Assertion (A): Controlling insider trading and imposing penalties for such
practices is a protective function of SEBI.
Reason (R): Registration of collective investment schemes and Mutual Funds
is a development function of SEBI.
A .Both A and R are true and R is the correct explanation of A
B. Both A and R are true, but R is not the correct explanation of A C. .A is true, but R
is false
D .A is false, but R is true
22 Assertion (A): Treasury Bills are issued by Central Government.
Reason (R): Treasury Bills are one of the safest money market instruments.
A. Both A and R are true and R is the correct explanation of A
B. Both A and R are true, but R is not the correct explanation of A
C .A is true, but R is false

D. A is false, but R is true
23 (Assertion)Call money is a method by which banks borrow mutually to maintain CRR (Cash Reserve Ratio)
(Reasoning)CRR is the minimum balance a commercial bank should maintain with RBI.
24 (Assertion) Certificate of deposit is short term instrument in bearer form, issued by commercial banks and
financial institutions to individuals, corporations and companies.
(Reasoning) it has maturity period 3 months to 12 months.
.
25 (Assertion)Money market is the market for short term funds.
(Reasoning)Short term funds are meant for a period of more than one year.

26 Assertion (A) : Foreign exchange management and control is undertaken by commercial banks.
Reasoning (R) : RBI has to maintain the official rate of exchange of rupee and ensure its stability.
27 (A)Treasury bills are issued by RBI on behalf of Central Government.

(B) It has Maturity more than one year.
28 1) Assertion (A):- Financial Market act as a link between Savers and borrowers.
Reason ( R) : Financial Market transfers money from those who have surplus money to
those who are in need of investment.
29 1) Assertion (A): Households are the Surplus unit in the financial Market.
Reason (R): Households keep their surplus money in the form of savings in banks.
30 1) Assertion(A) : Price of anything depends on the demand and supply factors.

Reason (R) : Demand and supply of financial securities in financial market helps in
deciding the price of the securities.

31 1) Assertion (A): Financial Market provides liquidity to financial assets.
Reason (R): Financial market provides a platform to convert the securities into cash.
32 1) Assertion (A): Primary market is where new securities are issued.

Reason (R): Stock Exchange is an organization established for assisting, regulating and
controlling of buying and selling in securities.

33 Assertion: The process of holding securities in electronic form is dematerialisation.
Reason: It eliminates the various kinds of risks associated with trading in securities. ( ANALYSIS)
(a) Both Assertion (A) and Reason (R) are true.
(b) Both Assertion (A) and Reason (R) are false.
(c) Assertion (A) is true and Reason (R) is false.
(d) Assertion (A) is false and Reason (R) is true.
34 Assertion: Primary market is also reformed to as new issue market. ( UNDERSTANDING)

Reason: It provides a platform for trading of existing securities.
35 Assertion: Money Market is a market for short from funds. ( KNOWLEDGE)

Reason : They facilated moblisation of large amount of money for short duration.
36 Assertion: Capital market is a market for medium and long term funds. ( APPLICATION)
Reason: The securities in capital market are less risky and have low rate of return.
37 Assertion: Financial market is a market which helps in exchange and creation of financial Assets.
( EVALUATION)
Reason: Both money market and capital market are part of financial market.
38 Assertion: Offer for sale is one of method of floatation of securities in primary market.
Reason: In this method securities are issued to general public with the help of an intermediary
called broker. ( UNDERSTANDING)
39 Assertion: the money market is called ‘money market’ because instruments traded in it are close
substitute of money.
Reason: The money market is a market for short term funds which deals in monetary assets whose
period is upto one year.
40 Assertion: Certificates of deposit (CD) are unsecured, negotiable instruments in bearer form, issued
by commercial banks and development financial institutions.
Reason: Certificates of deposit are capital market instruments as their maturity period is more than
one year.
41 Assertion: capital market refers to facilities and institutional arrangements through which long-
term funds, both debt and equity are raised and invested.
Reason: Capital Market can be divided into two parts: a. Primary Market b. Secondary Market

42 Assertion: the process by which allocation of funds is done is called financial marketing.
Reason: allocation of funds can be done: via banks or via financial markets
43 Assertion: financial market provides higher rate of returns to households.
Reason: financial market allocates funds available for investments into their most productive
investment opportunity.
ANSWER KEY
ARQ 1-C 2-A 3-B 4-C 5-A 6-A 7-B 8-A 9-B 10-C
11-D 12-a 13-a 14-a 15-a 16-b 17-a 18-A 19-B 20-C
21-A 22-D 23-A 24-A 25-C 26-A 27-C 28-a 29-a 30-a
31-a 32-b 33-a 34-c 35-a 36-c 37-a 38-a 39 -A 40-C
41-B 42-D 43-A


BUSINESS STUDIES
Marketing Management
Chapter-11
SL.NO Question:
Q.No.1 Assertion (A): Tata differentiates it’s three quality of tea with three different labels (Tata
Agni, Tata Premium and Tata Gold).
Reason (R):Labelling helps to describe a product and specify its contents.
Alternatives:
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
b) Assertion and Reason both are true but Reason is not the correct explanation of
Assertion.
c) Assertion is true but Reason is false.
d) Assertion is false but Reason is true.
Q.No.2 Assertion (A): From package of chips, cosmetics, etc. people can make some guess about
quality of the product contained in it.
Reason (R): Packaging helps in products promotion.
Alternatives:
Assertion.
Q.No.3 Assertion (A): Advertising and sales promotion are different from each other.
Reason (R): Advertising is a short-term prospective where as sales promotion a long-term
perspective.
Alternatives:
Assertion.

Q.No.4 Assertion (A): Government can declare a product as essential product and regulate its
price.
Reason (R): In order to protect the interest of public against unfair practices in the field of
price fixing.
Alternatives:
Assertion.
Q.No.5 Assertion (A): Trademark is not a part of brand.
Reason (R): Trademark does not have legal protection
Alternatives:
Assertion.
e) Both Assertion and Reason is false.
Q.No.6 Assertion (A): fee to a doctor for his medical advice represent the price.
Reason(B): Price may be defined as the amount of money paid by a buyer in consideration
of the purchase of a product or a service.
Q.No.7 Assertion(A): In the case of inelastic demand, the total revenue decreases when the price
is increased.
Reason(B): The price of a product is affected by the elasticity of demand of the product.

Q.No.8 Assertion(A): Promotion refers to the use of communication to inform potential customers
about a product.
Reason(B): It keep the customer persuading to buy the product.
Q.No.9 Assertion(A): -The overall cost of advertising gets spread over numerous communication
links established.
Reason(B): - Personal selling helps the business persons in bringing economy in their
efforts.
(D) Assertion is false, reason is true."
Q.No.10 Assertion(A): Use of sales promotion tools may affect the image of a product.
Reason(B): The buyers may start feeling that the product is either of good quality or is
appropriately priced
Q.No.11 Assertion(A): According to selling concept product are bought because of the selling
techniques of the seller.
Reason(B): Selling concept aims to maximize the sales by efforts made.
a) Both Assertion and reason are true and reason in correct explanation of Assertion.
b) Assertion and reason both are true but reason is not the correct explanation of
assertion.
c) Assertion is true, reason is false.
d) Assertion is false, reason is true.
Q.No.12 Assertion(A): Labeling is the silent salesman
Reason(B): It helps in promotion of products and provide required information to the
consumer.

assertion.
Q.No.13 Assertion(A): An established brand name helps the firm to enables it for maximizing the
sale and get high price than the competitor.
Reason(B): Companies introduce new product in their established name.
assertion.
Q.No.14 Assertion(A): Now a days giving attention on social responsibilities of business and using
environmental pollution free techniques.
Reason(B): According to marketing concept consumer satisfaction is necessary for the
businessman to earn profit.
assertion.
Q.No.15 Assertion(A): Marketing is a wide term.
Reason(B): Marketing starts with market research and ends on consumer satisfaction.
assertion.

Q.No.1 (a) Both Assertion and Reason are true and Reason is the correct explanation of
Assertion.
Assertion.
Q.No.3 (c) Assertion is true but Reason is false.
Assertion.
Q.No.5 (e) Both Assertion and Reason is false.
Q.No.6 (A) Both Assertion and reason are true and reason is correct explanation of
assertion.
Q.No.7 (D) Assertion is false, reason is true.
assertion.
Q.No.9 (B) Assertion and reason both are true but reason is not the correct explanation of
assertion.
Q.No.10 (C) Assertion is true, reason is false.
assertion.
assertion.
assertion.
assertion.
assertion.


Assertion Reasoning

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Assertion Reasoning

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BUSINESS STUDIES

1 Assertion (A): Planning is futuristic. Reason

3 Assertion (A): Planning is a continuous process as it involves series of steps Reason(R):

KVS ZIET BHUBANESWAR 26/10/2021 1

PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI, KOLKATA, RANCHI, SILCHAR

KVS ZIET BHUBANESWAR 26/10/2021 2

KVS ZIET BHUBANESWAR 26/10/2021 1

Reason: This is because organizing calls for departmentalization as it facilitates

(D) Assertion is false, reason is true.

Reason: These industries follow the divisional structure.

(D) Assertion is false, reason is true.

8. Assertion: In organisation which follow policy of decentralization, management can

KVS ZIET BHUBANESWAR 26/10/2021 2

(D) Assertion is false, reason is true.

9. Assertion: An organisation can never be completely centralized or decentralized.

(D) Assertion is false, reason is true.

10. Assertion: Delegation does not help in employees’ development.

(D) Assertion is false, reason is true.

11 Assertion: Delegation means abdication.

KVS ZIET BHUBANESWAR 26/10/2021 3

13 Assertion: authority must be equal to responsibility

14 Assertion: Responsibility flow upward

15 Assertion: Delegation is sharing the authority and responsibility between superior

16 Assertion: In decentralization there is more freedom of action.

KVS ZIET BHUBANESWAR 26/10/2021 4

KVS ZIET BHUBANESWAR 26/10/2021 5

27 Assertion(A): Organising provides a clear description of jobs and related duties.

28 Assertion(A): Functional Organization helps in increasing managerial and

29 Assertion(A): Organising helps management in implementing the principle of

30 Assertion(A): Authority determines the superior subordinate relationship wherein the

31 Assertion (A): Delegation is a pre-requisite to the efficient functioning of an

KVS ZIET BHUBANESWAR 26/10/2021 7

Reason: Decentralisation reduces the need for direct supervision as

Choose the correct option:

Choose the correct option:

Choose the correct option:

Choose the correct option:

Choose the correct option:

Choose the correct option:

KVS ZIET BHUBANESWAR 26/10/2021 9

KVS ZIET BHUBANESWAR 26/10/2021 10

KVS ZIET BHUBANESWAR 26/10/2021 11

ASSERTION REASON TYPE QUESTIONS

1. Assertion(A): Staffing involves manning the organisational structure.

KVS ZIET BHUBANESWAR 26/10/2021 1

5. Assertion (A) The foundation of any organisation is the talented and

6 For the following two statements choose the correct statement.

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8 For the following two statements choose the correct statement.

10 Assertion (A): Recruitment is the process of searching prospective employees of

KVS ZIET BHUBANESWAR 26/10/2021 3

12 Assertion: Training is job oriented.

13 Assertion: Training leads to higher productivity.

15 Assertion: Development is career oriented.

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20 Assertion (A): Training helps the employees in promotion.

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28 Assertion(A): Staffing is most fundamental and critical drive of organizational performance.

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29 Assertion(A): Staffing is a continuous process.

30 Assertion(A): Advertisement is an internal source of recruitment.

31 Assertion(A): Internal recruitment simplifies the process of selection and placement.