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MCQ - Budget

The document contains a multiple-choice questionnaire focused on budgetary control concepts, including definitions, objectives, and classifications of budgets. It covers various aspects such as the role of budgetary control in management, the importance of cooperation, and the characteristics of different types of budgets. The answers to the questions are also provided, indicating the correct options for each question.

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23 views

MCQ - Budget

The document contains a multiple-choice questionnaire focused on budgetary control concepts, including definitions, objectives, and classifications of budgets. It covers various aspects such as the role of budgetary control in management, the importance of cooperation, and the characteristics of different types of budgets. The answers to the questions are also provided, indicating the correct options for each question.

Uploaded by

boomaramya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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MCQ- Budgetary Control

1. A budget is a plan of action expressed in…


a. Financial terms
b. Non‐financial terms
c. Both
d. Subjective matter
2. Budget is prepared for a…
a. Indefinite period
b. Definite period
c. Period of one year
d. Six months

3. A budget is tool which helps the management in planning and control of…
a. All business activities
b. Production activities
c. Purchase activities
d. Sales activities

4. Budgetary control system acts as a friend, philosopher and guide to the…


a. Management
b. Share holders
c. Creditors
d. Employees

5. Budgetary control system defines the objectives and policies of the…


a. Production department
b. Finance department
c. Marketing department
d. All

6. Budgetary control system facilitates centralized control with…


a. Decentralized activity
b. Centralized activity
c. Both
d. None

7. Budgetary control facilitates easy introduction of the…


a. Marginal costing
b. Ratio analysis
c. Standard costing
d. Subjective matter

8. Budgetary control helps the management in…


a. Obtaining bank credit
b. Issue of shares
c. Getting grants from government
d. All of these
9. Budgetary control system helps the management to eliminate…
a. Undercapitalization
b. Overcapitalization
c. Both
d. Subjective matter

10. Budgetary control provides a basis for…


a. Bonus shares
b. Rights shares
c. Remuneration plans
d. None

11. Budgetary control helps to introduce a suitable incentive and remuneration based on…
a. Changes in government policies
b. Inflationary conditions
c. Both
d. None

12. Budgetary control--------replace management in decision‐making.


a. Can
b. Cannot
c. Sometimes
d. Inadequate data

13. The success of budgetary control system depends upon the willing cooperation of…
a. Shareholders
b. Management
c. Creditors
d. All the functional areas of management

14. Recording of actual performance is….


a. An advantage of budgetary control
b. A step in budgetary control
c. A limitation of budgetary control
d. None

15. Revision of budgets is…


a. Unnecessary
b. Can’t determine
c. Necessary
d. Inadequate data

16. Frequent revision of budgets will…


a. Affects its reliability
b. Increase the accuracy
c. Both
d. Subjective matter
17. Usually the production budget is stated in terms of…
a. Money
b. Quantity
c. Both
d. None

18. Budget period is the…


a. Period of budget committee
b. Period of budget centres
c. Period for which a budget is prepared
d. Period of budget officer

19. Budget period depends upon…


a. The type of budget
b. The nature of business
c. The length of trade cycles
d. All of these

20. A key factor is one which restricts…


a. The volume of production
b. The volume of sales
c. The volume of purchase
d. All of the above

21. Key factor is also known as…


a. Limiting factor
b. Governing factor
c. Principal factor
d. All

22. Budget relating to the key factor is prepared…


a. After other budgets
b. With other budgets
c. Before other budgets
d. None

23. The budgets are classified on the basis of…


a. Time
b. Function
c. Flexibility
d. All

24. An example of long period budget is…


a. R& D budget
b. Master budget
c. Sales budget
d. Personnel budget
25. Sales budget shows the sales details as…
a. Month wise
b. Product wise
c. Area wise
d. All of the above

26. Production budget is…


a. Dependent on purchase budget
b. Dependent on sales budget
c. Dependent on cash budget
d. None

27. The main objective of budgetary control is…


a. To define the goal of the firm
b. To coordinate different departments
c. To plan to achieve its goals
d. All of the above

28. A budget centre is…


a. Department or part of the department
b. Meeting place for budget committee
c. Office of the budget officer
d. None

29. The budget committee consists of…


a. Managers
b. Budget officers
c. Creditors
d. Both

30. Fixed budget is useless for comparison when the level of activity…
a. Increases
b. Fluctuates both ways
c. Decreases
d. Constant

Answer
1 c 6 c 11 b 16 a 21 d 26 b
2 b 7 c 12 b 17 c 22 c 27 c
3 a 8 a 13 c 18 c 23 d 28 a
4 a 9 c 14 b 19 d 24 a 29 b
5 d 10 c 15 c 20 a 25 d 30 b

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