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CUET 2022 Business Studies Question Paper with Answers & Solutions

50 questions with answer key & explanations

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Q1.
______ is the managerial function that monitors organisational performance towards the attainment of organisational goals
A. Planning
B. Controlling ✓
C. Organising
D. Directing
Show answer & explanation

Correct answer: B

Controlling is the function that measures actual performance against standards and ensures the organisation moves towards its goals.

Q2.
______ is the scientific technique through which F.W Taylor devised the concept of Assembly line
A. Motion study
B. Time study
C. Method study ✓
D. Standardisation and simplification
Show answer & explanation

Correct answer: C

Method study aims to find the best way of doing a job; Taylor used it to develop the concept of the assembly line for efficient production.

Q3.
Rate of saving and investment, money supply in the economy, public debt, volume of imports and export are components of ______ dimension of business environment
A. Economic ✓
B. Political
C. Legal
D. Social
Show answer & explanation

Correct answer: A

Savings, investment, money supply, public debt, imports and exports are all part of the economic environment of business.

Q4.
Identify the statement that does not refer to the feature of business environment
A. Dynamic nature
B. Innovative ✓
C. Totality of external forces
D. Specific and general forces
Show answer & explanation

Correct answer: B

Features of business environment include totality of external forces, specific and general forces, dynamic nature, uncertainty, complexity and relativity. 'Innovative' is not a feature.

Q5.
Mr. Raj is the MD of the wrist watch company. He has systematically divided the work among all the departments to ensure clarity in thought and action, so that work is carried on smoothly without any interruptions. Identify the importance of planning highlighted in the above case.
A. Planning reduces overlapping and wasteful activities ✓
B. Planning promotes innovative ideas
C. Planning facilitates decision making
D. Planning reduces the risk of uncertainty
Show answer & explanation

Correct answer: A

Systematically dividing work to avoid interruptions and ensure smooth, coordinated functioning reflects 'planning reduces overlapping and wasteful activities'.

Q6.
In a manufacturing concern, division of work into key functions will include production, purchase, marketing accounts and personnel. These departments may be further divided into sections. Which type of structure is highlighted here?
A. Divisional structure
B. Functional structure ✓
C. Rational structure
D. Organisational structure
Show answer & explanation

Correct answer: B

Grouping of jobs of similar nature into functions like production, purchase, marketing, finance and personnel is functional structure.

Q7.
It is defined as the framework within which managerial and operational tasks are performed. Identify it
A. Span of management
B. Organisational structure ✓
C. Informal organisation
D. Delegation
Show answer & explanation

Correct answer: B

Organisation structure is the framework within which managerial and operating tasks are performed.

Q8.
Vasu is a hard working employee in the organisation. He has been working as a junior clerk for the last five years. As Srinath, the senior clerk retired he expected to fill the vacant position. But instead of vertically shifting Vasu, the company appointed Raman as a senior clerk through a placement agency. Vasu felt demotivated and frustrated. Identify the limitation of external sources of recruitment discussed above.
A. Lengthy process
B. Dissatisfaction among existing staff ✓
C. Danger of inbreeding
D. Competition spirit is hampered
Show answer & explanation

Correct answer: B

Hiring an outsider instead of promoting an existing eligible employee causes dissatisfaction among existing staff.

Q9.
Controlling function of an organisation is ______
A. Forward looking
B. Backward looking
C. Both forward and backward looking ✓
D. Neither forward nor backward looking
Show answer & explanation

Correct answer: C

Controlling looks back to compare actual with planned performance and looks forward to take corrective action for the future; hence it is both backward and forward looking.

Q10.
'In a bulb manufacturing unit, the range of defective bulb is decided at 5%. Any deviation that goes beyond the permissible limit of defect is to be brought to the notice of supervisor. Identify the concept of one of the functions of management highlighted here.
A. Control by Exception ✓
B. Critical Point Control
C. Controlling
D. Key Result Areas
Show answer & explanation

Correct answer: A

Reporting only deviations beyond a permissible limit (5%) to higher authorities is management/control by exception.

Q11.
Which of the following is not a limitation of controlling ?
A. Difficulty in setting quantitative standards
B. Resistance from employees
C. Ensuring order and discipline ✓
D. Costly affair
Show answer & explanation

Correct answer: C

Limitations of controlling include difficulty in setting quantitative standards, little control over external factors, resistance from employees and being a costly affair. Ensuring order and discipline is an importance, not a limitation.

Q12.
Quantitative standards should be set so that it is easier to match the actual performance with the desired (planned) performance. Identify the function of management discussed above.
A. Planning
B. Controlling ✓
C. Staffing
D. Directing
Show answer & explanation

Correct answer: B

Setting standards and matching actual with planned performance is part of the controlling function.

Q13.
The cost in the process of raising fund through equity is known as ______.
A. Financial risk
B. Cost of debt
C. Floatation cost ✓
D. Cost of capital
Show answer & explanation

Correct answer: C

Floatation cost is the cost incurred in raising funds (e.g. through issue of equity shares).

Q14.
A trading organisation comparatively needs ______ investment in fixed assets as compared to a manufacturing organisation
A. Lesser ✓
B. larger
C. Moderate
D. Negligible
Show answer & explanation

Correct answer: A

Trading concerns require lesser investment in fixed assets than manufacturing concerns, which need plant, machinery etc.

Q15.
Rajat is planning the break up of his finance to know the amount of capital that he will utilize to purchase fixed assets and current assets. Identify the financial decision taken by Rajat
A. Investment decision ✓
B. Financial decision
C. Dividend decision
D. Capital structure
Show answer & explanation

Correct answer: A

Deciding how funds are allocated to fixed assets (capital budgeting) and current assets (working capital) is the investment decision.

Q16.
Debt normally does not cause ______ .
A. a dilution of control ✓
B. a dilution of flexibility
C. a dilution of cost
D. a dilution of equity
Show answer & explanation

Correct answer: A

Debt holders are creditors, not owners, so raising debt does not dilute control of existing shareholders, unlike issuing equity.

Q17.
Rohit has 500 shares of Ruchi Soya Ltd. Ruchi Soya further issued 1,00,000 equity shares and offered Rohit to buy 1 more equity share for every 5 shares held by him. Identify the method of floatation
A. Right issue ✓
B. Private placement
C. Offer through prospectus
D. offer for sale
Show answer & explanation

Correct answer: A

Offering new shares to existing shareholders in proportion to their holdings is a rights issue.

Q18.
Beneficial owner account with a depository participant for holding and transfer of securities is also known as ______.
A. Securities Account
B. Demat Account ✓
C. Share owner Account
D. Securities owner Account
Show answer & explanation

Correct answer: B

An account with a depository participant for holding securities in electronic form is a Demat (dematerialised) account.

Q19.
According to the Consumer Protection Act 2019, identify who among the following cannot file a complaint.
A. Any registered consumers' association
B. Central Government or any State Government
C. One or more consumers on behalf of numerous consumers having the same interest
D. A person who avails of any service for any commercial purpose ✓
Show answer & explanation

Correct answer: D

A person availing goods/services for commercial purpose (resale) is not a consumer under the Act and cannot file a complaint.

Q20.
Mohini went to a shopkeeper to buy hair oil. The shopkeeper forced her to buy a particular brand of oil out of various brands available with him. Which right of Mohini has been violated?
A. Right to be informed
B. Right to choose ✓
C. Right to safety
D. Right to be heard
Show answer & explanation

Correct answer: B

Forcing a consumer to buy a particular brand violates the right to choose from available alternatives.

Q21.
"ISI Mark" is found on
A. Electric goods ✓
B. Spices
C. Jewellery
D. Woolen clothes
Show answer & explanation

Correct answer: A

The ISI mark (Bureau of Indian Standards) certifies industrial/electrical products such as electric goods. (Spices use Agmark, jewellery uses Hallmark, woolens use Woolmark.)

Q22.
If a technology required to convert the idea of product offering is available, it is known as ______ feasibility analysis.
A. Economic
B. Financial
C. Commercial
D. Technical ✓
Show answer & explanation

Correct answer: D

Availability of technology to convert an idea into a product offering relates to technical feasibility.

Q23.
As the volume of advertising is getting more and more expanded it is becoming difficult to make advertising messages heard by the target prospects. This will affect the ______ of advertising
A. Social values
B. Preference
C. Effectiveness ✓
D. Criticism
Show answer & explanation

Correct answer: C

When messages cannot reach target prospects amid clutter, the effectiveness of advertising is reduced.

Q24.
That part of a brand which can be recognised but cannot be utterable is called ______ .
A. Brand name
B. Trade mark
C. Brand mark ✓
D. Patent
Show answer & explanation

Correct answer: C

The part of a brand which can be recognised but not spoken (a symbol/design) is the brand mark.

Q25.
Which one of the following is not true about objections to advertising?
A. Advertisements which make similar claims confuses the buyer
B. Advertising is a very economical mode of communication ✓
C. Advertising does not distinguish between superior and inferior products
D. Advertising undermines social values and promote materialism
Show answer & explanation

Correct answer: B

Objections to advertising include confusing buyers, not distinguishing superior/inferior products and undermining social values. That advertising is economical is a benefit, not an objection.

Q26.
The Economic survey 2019 suggests that the psychological studies can be used in the realm of tax compliance. It is in favour of using religious norms such as "dying debt is a sin" to improve tax compliance. Identify the related dimension of business environment. A. Economic B. Social C. Technological D. Legal E. Political Choose the correct answer from the option given below:
A. A & D
B. B & D ✓
C. E & C
D. A & E
Show answer & explanation

Correct answer: B

Tax compliance relates to legal/economic policy while religious/social norms ('dying debt is a sin') relate to the social dimension. Among options, B (Social & Legal) best fits the use of social norms to improve tax (legal) compliance.

Q27.
"Planning is decided in advance what to do and how to do". Choose the correct sequence of steps to make the process of planning. A. Developing premises B. Follow up action C. Evaluating alternatives D. Identifying alternatives E. Selecting an alternative Choose the correct answer from the option given below:
A. A,D,C,E,B ✓
B. A,B,C,E,D
C. D,A,C,B,E
D. C,B,A,D,E
Show answer & explanation

Correct answer: A

Planning steps: setting objectives, developing premises (A), identifying alternatives (D), evaluating alternatives (C), selecting an alternative (E), implementing, follow-up action (B). The given sequence A-D-C-E-B matches.

Q28.
From the below description, arrange the organising process in a sequential order A. Assignment of duties B. Establishing reporting relationship C. Identification and division of work D. Departmentalisation Choose the correct answer from the option given below:
A. D,C,B,A
B. C,D,A,B ✓
C. A,C,B,D
D. B,D,C,A
Show answer & explanation

Correct answer: B

Organising process: identification and division of work (C), departmentalisation (D), assignment of duties (A), establishing reporting relationships (B) — sequence C-D-A-B.

Q29.
Identify the correct sequence in the staffing process A. The organisation conducted inhouse trainings and offered opportunities for career advancement in the long run B. An advertisement of 'situation vacant' was published in the daily newspaper C. The selected employee was introduced to the office employees and he occupied the position for which he was selected D. The number and types of human resource available and required were assessed in the organisation E. A series of tests and interviews was conducted to shortlist a suitable candidate. Choose the correct answer from the option given below:
A. D-B-C-E-A
B. D-B-E-C-A ✓
C. D-E-C-A-B
D. E-D-B-C-A
Show answer & explanation

Correct answer: B

Staffing: estimating manpower (D), recruitment/advertisement (B), selection via tests & interviews (E), placement & orientation (C), training & development (A) — sequence D-B-E-C-A.

Q30.
Arrange the following steps of staffing process in a correct sequence A. Performance appraisal B. Training and Development C. Placement and Orientation D. Promotion and Career planning E. Compensation Choose the correct answer from the option given below:
A. E,A,C,D,B
B. B,A,D,E,C
C. C,B,A,D,E ✓
D. A,B,C,D,E
Show answer & explanation

Correct answer: C

Order after selection: Placement and orientation (C), Training and development (B), Performance appraisal (A), Promotion and career planning (D), Compensation (E) — sequence C-B-A-D-E.

Q31.
Which of the following statements are related to limitations of planning? A. Planning leads to rigidity B. Planning is futuristic C. Planning reduces creativity D. Planning does not guarantee success E. Planning involves decision making Choose the correct answer from the option given below:
A. A,B,C and D
B. A,C, and D only ✓
C. B, C, D and E only
D. A,C,D and E only
Show answer & explanation

Correct answer: B

Limitations of planning: leads to rigidity (A), reduces creativity (C), does not guarantee success (D). 'Planning is futuristic' (B) and 'involves decision making' (E) are features, not limitations. So A, C and D only.

Q32.
Capital market consists of A. Development Bank B. Financial Institutions C. Stock Exchange D. Treasury Bills E. Call Money Choose the correct answer from the option given below:
A. A,C,E only
B. A,B,C only ✓
C. A,D,E only
D. C,D,E only
Show answer & explanation

Correct answer: B

Capital market consists of development banks, financial institutions and the stock exchange. Treasury bills and call money are money market instruments. So A, B, C only.

Q33.
Which of the following are the external sources of recruitment? A. Direct recruitment B. Transfer C. Casual Callers D. Campus recruitment E. Promotions Choose the correct answer from the option given below:
A. A,C and D only ✓
B. A,B and C only
C. B,C and D only
D. A and C only
Show answer & explanation

Correct answer: A

External sources: direct recruitment (A), casual callers (C), campus recruitment (D). Transfer (B) and promotion (E) are internal sources. So A, C and D only.

Q34.
SEBI is an interim administrative body to promote orderly and healthy growth of securities market. Find out the correct statements about SEBI A. SEBI was established on 12 April 1988 as an administrative body to promote orderly growth of stock market B. The act of Parliament that governs SEBI is SEBI Act, 1994 C. The basic purpose of SEBI is to form new enterprises D. SEBI doesn't protect the rights and interest of investors E. SEBI is a separate regulatory body Choose the correct answer from the option given below:
A. A,C,E only
B. A,B,D only
C. A and E only ✓
D. B,C,D only
Show answer & explanation

Correct answer: C

SEBI was established on 12 April 1988 as an administrative body (A correct) and is a separate regulatory body (E correct). B is wrong (SEBI Act is 1992), C and D are wrong. So A and E only.

Q35.
From the following identify the drawbacks of external sources of recruitment A. Wider choice B. Dissatisfaction among existing staff C. Lengthy process D. Costly process E. Competitive spirit Choose the correct answer from the option given below:
A. B,C and E only
B. B,C and D only ✓
C. A,B and C only
D. B, D and E only
Show answer & explanation

Correct answer: B

Drawbacks/demerits of external recruitment: dissatisfaction among existing staff (B), lengthy process (C), costly process (D). Wider choice (A) and competitive spirit (E) are merits. So B, C and D only.

Q36.
Match list I with list II. LIST I: A. People and material must be in suitable places at appropriate time for maximum efficiency; B. This principle resembles with military organisation; C. It will minimize the need for using penalties; D. Employees should be given reasonable time to show results. LIST II: I. Espirit de corps; II. Order; III. Stability of tenure; IV. Unity of command. Choose the correct answer from the option given below:
A. A-II, B- I, C-IV, D-III
B. A-II, B- III, C-IV, D-I
C. A-II, B- IV, C-I, D-III ✓
D. A-III, B- II, C-I, D-IV
Show answer & explanation

Correct answer: C

A=Order (right people/material in right place=II); B=resembles military org=Unity of command (IV); C=minimize penalties=Esprit de corps (I); D=reasonable time to show results=Stability of tenure (III). A-II, B-IV, C-I, D-III.

Q37.
Match list I with list II. LIST I: A. Setting performance standards; B. Analysing deviation; C. Measurement of actual performance; D. Comparison of actual performance with standards. LIST II: I. Management by Exception; II. Sample checking; III. Reveals the deviation; IV. Serves as benchmarks. Choose the correct answer from the option given below:
A. A-I, B- III, C-II, D-IV
B. A-II, B- I, C-IV, D-III
C. A-IV,B- I, C-II, D-III ✓
D. A-III, B- II, C-I, D-IV
Show answer & explanation

Correct answer: C

A=Setting standards=serves as benchmarks (IV); B=Analysing deviation=Management by Exception (I); C=Measurement of actual performance=sample checking (II); D=Comparison with standards=reveals the deviation (III). A-IV, B-I, C-II, D-III.

Q38.
Match list I with list II. LIST I: A. It seeks to protect and promote the interest of consumers; B. It aims to check adulteration of food articles; C. It provides protection against under weight and under measure of products; D. It provides protection against fraudulent marks on products. LIST II: I. The Standards of Weight and Measures Act, 1976; II. The Trade Mark Act, 1999; III. The Consumer Protection Act 2019; IV. The Prevention of Food Adulteration Act, 1954. Choose the correct answer from the option given below:
A. A-I, B- II, C-III, D-IV
B. A-II, B- I, C-III, D-IV
C. A-III, B- IV, C-I, D-II ✓
D. A-IV, B- III, C-II, D-I
Show answer & explanation

Correct answer: C

A=protect consumers=Consumer Protection Act 2019 (III); B=check adulteration=Prevention of Food Adulteration Act 1954 (IV); C=under weight/measure=Standards of Weight and Measures Act 1976 (I); D=fraudulent marks=Trade Mark Act 1999 (II). A-III, B-IV, C-I, D-II.

Q39.
Match list I with list II. LIST I: A. Separation of planning and execution function; B. Setting benchmarks for every business activity which must be adhered during production; C. Eliminating superflous varieties, sizes and dimensions; D. Minimizing the cost of production and maximising the quality and satisfaction of the customers. LIST II: I. Standardisation of work; II. Simplification of work; III. Method study; IV. Functional foremanship. Choose the correct answer from the option given below:
A. A-I, B- III, C-II, D-IV
B. A-IV, B- I, C-II, D-III ✓
C. A-III, B- II, C-IV, D-I
D. A-II, B- III, C-I, D-IV
Show answer & explanation

Correct answer: B

A=separation of planning & execution=Functional foremanship (IV); B=setting benchmarks=Standardisation of work (I); C=eliminating superfluous varieties=Simplification of work (II); D=minimizing cost/maximising quality=Method study (III). A-IV, B-I, C-II, D-III.

Q40.
Match list I with list II. LIST I (Financial Markets): A. Capital Market; B. Money Market; C. Primary Market; D. Secondary Market. LIST II (Explanation): I. ...seeking to establish new enterprise; II. It consists of development banks, commercial banks and stock exchange and facilitate economic development; III. Market with low risk, unsecured instruments where assets are close substitutes for cash; IV. It helps existing investors to disinvest and fresh investors to enter market. Choose the correct answer from the option given below:
A. A-II, B- IV, C-III, D-I
B. A-IV, B- III, C-II, D-I
C. A-II, B- III, C-I, D-IV ✓
D. A-III, B- IV, C-I, D-II
Show answer & explanation

Correct answer: C

A=Capital market=development/commercial banks & stock exchange facilitating economic development (II); B=Money market=low risk near-cash instruments (III); C=Primary market=new enterprise/new issues (I); D=Secondary market=existing investors disinvest & fresh investors enter (IV). A-II, B-III, C-I, D-IV.

Mr.Murthy is the chairman of a leading business organisation. He grabs all possible opportunities and leads the organisation by example and trust. He always motivates his team and introduced a number of motivational schemes like: - Employees are offered shares at a price lower than the market price. - Employees are given individual autonomy and rewards for performance. He realises that satisfied and secured employees can best focus on organisational success. He ensures hiring competent people for various jobs. Every employee is required to undergo training, their jobs are well defined and regular feedbacks are provided so that their long term interest is also served. In order to keep an eye on employees performance, a strategic decision was introduced that all communication must be recorded and filed in the office. He has also devised various ways to know the reactions of employees on different policies and decisions. As a result, employees are highly motivated, goals are achieved and organisation is growing.
Q41.
At what level of management is Mr. Murthy working?
A. Top level ✓
B. Middle level
C. Lower level
D. Operational level
Show answer & explanation

Correct answer: A

As chairman who makes strategic decisions and sets the direction of the whole organisation, Mr. Murthy works at the top level of management.

Q42.
"He grabs all possible opportunities and leads the organisation" by example and trust. Which quality of a good leader is depicted here?
A. Integrity
B. Knowledge
C. Initiative ✓
D. Motivational skills
Show answer & explanation

Correct answer: C

Grabbing all possible opportunities reflects initiative — the willingness to act and take advantage of opportunities.

Q43.
"He ensures hiring competent people for various jobs". Which function of management is being performed by MR. Murthy?
A. Planning
B. Organising
C. Staffing ✓
D. Controlling
Show answer & explanation

Correct answer: C

Hiring competent people for various jobs is the staffing function of management.

Q44.
"Every employee is required to undergo training, their jobs are well defined and regular feedbacks are provided so that their long term interest is also served". Above statement describes a step involved in one of the functions of management. Identify the step.
A. Selection ✓
B. Taking corrective action
C. Implementing the plan
D. Performance appraisal
Show answer & explanation

Correct answer: A

Training, well-defined jobs and feedback serving long-term interest relate to staffing; among the given options the closest staffing step is Selection (placement, training and development of selected employees).

Q45.
"He has also devised various ways to know the reaction of employees" Above statement highlights one of the elements involved in communication process. Identify it.
A. Sender
B. Media
C. Encoding
D. Feedback ✓
Show answer & explanation

Correct answer: D

Knowing the reactions of employees to messages/policies is feedback in the communication process.

Q46.
Employees are offered shares at a price lower than the market price" Financial incentives identified above is:
A. Profit sharing
B. Co-partnership/Stock option ✓
C. Productivity linked wage benefit
D. Perquisites
Show answer & explanation

Correct answer: B

Offering employees shares at a price lower than market price is co-partnership/stock option, a financial incentive making employees part owners.

Q47.
"Employees are given individual autonomy and rewards for performance" Identify the need satisfied as given by Maslow's need hierarchy theory
A. Safety/Security need
B. Belongingness need
C. Esteem need ✓
D. Self actualisation need
Show answer & explanation

Correct answer: C

Autonomy and recognition/rewards for performance satisfy esteem needs (self-respect, recognition, status) in Maslow's hierarchy.

Q48.
"All communication must be recorded and filed in the office" Which type of communication is best described in the above statement?
A. Lateral communication
B. Informal communication
C. Grapevine communication
D. Formal communication ✓
Show answer & explanation

Correct answer: D

Communication that is officially recorded and filed flows through official channels — this is formal communication.

Q49.
"Employees were given individual autonomy and reward for performance" Which non financial incentive is highlighted in the above statement?
A. Status
B. Organisational climate
C. Employee recognition ✓
D. Career advancement opportunity
Show answer & explanation

Correct answer: C

Giving individual autonomy and rewards/recognition for performance is the non-financial incentive of employee recognition.

Q50.
Mr. Murthy always motivates his team and introduced a number of motivational schemes in the organisation. Which of the following skill is being possed by Mr. Murthy?
A. Communication skill
B. Motivation Skill ✓
C. Self confidence
D. Integrity
Show answer & explanation

Correct answer: B

Motivating the team and introducing motivational schemes reflects motivation skill of a good leader.

Original question paper source: National Testing Agency (NTA), CUET (UG) 2022. Reproduced for educational use. Answers & explanations by UniDrill.