MANAGEMENT CONTROL SYSTEM
UNIT- 1
True or False
1. Controlling is forward looking in nature. _________
True
2. The process of Management Control refers to the organizational set-up indicating lines of
authority, delegation, responsibility & accountability. ________
False
3. Establishing a reporting system in Management Control is essential to identify & evaluate
True
performance. ________
True
4. 3 basic elements of MCS are Structure, Process & Culture. ______
5. Establishing linkages between various stakeholders towards goal congruence is important in
True
designing of MCS. ______
6. There are 3 types of Control Systems – opened control system, closed control system & semi
control system. ______
False
True
7. Management is aided by and not replaced by computers. __________
False
8. Controlling process does not aim at taking corrective measures. _________
9. There are 3 types of control: feed forward control, concurrent control & feedback control.
True
_____________
10. A MCS is designed to assist managers in reporting and scheduling of staff members of the
False
organization. ____________
MCQs
1. A group of interacting, interrelated or interdependent functional elements forms a collective
entity called as ________
a. Management
b. System
c. Inventory
d. Standards
2. 4 elements of Control system are:
a. Detector, assessor, feedback, director
b. Sensor, detector, effector, organizer
c. Detector, assessor, effector, communication network
d. Sensor, selector, detector, assessor
3. _____________ has an efficient characteristic of producing maximum output with minimum
input per unit.
a. Information control
b. Management control
c. Project control
d. None of the above
4. There are 4 types of Management Control – Strategic control, operational control, _________ &
___________.
a. Profitability control & Annual plan control
b. Accountability control & Profitability control
c. Influencing control & Profitability control
d. Reporting control & Annual plan control
5. Two characterized feature of MCS, Reciprocity & Expansibility were given by:
a. G. W. Dalton
b. P. R. Lawrence
c. Both (a) & (b)
d. None of the above
6. Which of the following is not a type of responsibility center under Management Control
Structure?
a. Revenue Centre
b. Profit Centre
c. Investment Centre
d. Debt Centre
7. These are 4 steps in Management planning and control system process:
i. Take corrective action
ii. Setting performance standards
iii. Evaluate results and give feedback
iv. Measure & compare actual with planned results.
The correct sequence of these steps is:
a. iv, ii, i, iii
b. ii, iv, iii, i
c. i, ii, iii, iv
d. iv, i, iii, ii
8. Process of Socializing new members to the values, policies & procedures of the organization is
called as
a. Indoctrination
b. Motivation
c. Communication
d. Coordination mechanism
9. There are 3 types of business process: Centralized, Decentralized & __________
a. Matrix form of Business process
b. Organized Business process
c. Complex Business Process
d. None of the above
10. There are generally _______ types of control systems.
a. 3
b. 4
c. 2
d. 6
11. Which of the following are in 10 commandments of Effective control system?
a. Suitability, Flexibility, prompt reading
b. Accountability, relativity, accessibility
c. Flexibility, control, futuristic
d. All of the above
12. A situation when groups & individuals work together for achieving a particular goal can be
classified as:
a. Motivation
b. Goal congruence
c. Effort
d. Autonomy
13. Management is “the art of getting things done through people" was given by:
a. Simons
b. Mary Parker Fillet
c. Peter Drucker
d. None of the above
14. A good control system should be _________ rather than work- centered.
a. Action centered
b. Management centered
c. Worker centered
d. All of the above
15. Operational control is also referred as _________
a. Planning control
b. Task control
c. Corrective control
d. Risk control
16. Process whereby top management examines the actual outcomes of its company's effort
manually is known as __________
a. Strategic control
b. Active control
c. Annual plan control
d. Objective control
17. Management Accounting has three major subdivisions: Full cost accounting, Differential
accounting & _______________
a. Responsibility accounting
b. Cost benefit accounting
c. Both (a) & (b)
d. None of the above
18. Nature of Controlling is closely related to that of ________
a. Planning
b. Reporting
c. Routing
d. None of the above
19. The sub-units of business are function oriented and do not take any decision at their level in
___________
a. Centralized Business process
b. Decentralized business process
c. Both (a) & (b)
d. None of the above
20. According to Chester Barnard, Control is efficient when cost is _______, morale is _______ &
individual dissatisfaction is minimal.
a. High, minimal
b. Minimal, high
c. High, high
d. Minimal, minimal.
Answer key -- True or false
1. True
2. False
3. True
4. True
5. True
6. False
7. True
8. False
9. True
10. False
MCQ
1. b
2. c
3. b
4. a
5. c
6. d
7. b
8. a
9. a
10. c
11. a
12. b
13. b
14. c
15. b
16. c
17. a
18. a
19. a
