Chapter: Budgetary Control
1.

A budget is a plan of action expressed in…

A. financial terms
B. non‐financial terms
C. both
D. subjective matter
Answer» C. both
2.

Budget is prepared for a…

A. indefinite period
B. definite period
C. period of one year
D. six months
Answer» B. definite period
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
Answer» A. all business activities
4.

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

A. management
B. share holders
C. creditors
D. employees
Answer» A. management
5.

Budgetary control system defines the objectives and policies of the…

A. production department
B. finance department
C. marketing department
D. all
Answer» D. all
6.

Budgetary control facilitates easy introduction of the…

A. marginal costing
B. ratio analysis
C. standard costing
D. subjective matter
Answer» C. standard costing
7.

Budgetary control helps the management in…

A. obtaining bank credit
B. issue of shares
C. getting grants from government
D. all of these
Answer» A. obtaining bank credit
8.

Budgetary control system helps the management to eliminate…

A. undercapitalization
B. overcapitalization
C. both
D. subjective matter
Answer» C. both
9.

Budgetary control provides a basis for…

A. bonus shares
B. rights shares
C. remuneration plans
D. none
Answer» C. remuneration plans
10.

Budgetary control helps to introduce a suitable incentive and remuneration based on…

A. changes in government policies
B. inflationary conditions
C. both
D. none
Answer» B. inflationary conditions
11.

Budgetary control __________ replace management in decision‐making.

A. can
B. cannot
C. sometimes
D. inadequate data
Answer» B. cannot
12.

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
Answer» D. all the functional areas of management
13.

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
Answer» B. a step in budgetary control
14.

Revision of budgets is…

A. unnecessary
B. can’t determine
C. necessary
D. inadequate data
Answer» C. necessary
15.

Frequent revision of budgets will…

A. affects its reliability
B. increase the accuracy
C. both
D. subjective matter
Answer» A. affects its reliability
16.

Usually the production budget is stated in terms of…

A. money
B. quantity
C. both
D. none
Answer» C. both
17.

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
Answer» C. period for which a budget is prepared
18.

Budget period depends upon…

A. the type of budget
B. the nature of business
C. the length of trade cycles
D. all of these
Answer» D. all of these
19.

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
Answer» A. the volume of production
20.

Plant utilization budget and Manufacturing overhead budgets are types of.

A. production budget
B. sales budget
C. cost budget
D. none of the above
Answer» A. production budget
21.

R&D budget and Capital expenditure budget are examples of

A. short-term budget
B. current budget
C. long-term budget
D. none of the above
Answer» C. long-term budget
22.

The scare factors is also known as

A. key factor
B. abnormal factor
C. linking factor
D. none of the above
Answer» A. key factor
23.

A budgeting process which demands each manager to justify his entire budget in detail from beginning is

A. functional budget
B. master budget
C. zero base budgeting
D. none of the above
Answer» C. zero base budgeting
24.

Budgetary control system facilitates centralized control with…

A. decentralized activity
B. centralized activity
C. both
D. none
Answer» C. both
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