Budget and Budgetary Control MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Budget and Budgetary Control, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Budget and Budgetary Control MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Budget and Budgetary Control mcq questions that explore various aspects of Budget and Budgetary Control problems. Each MCQ is crafted to challenge your understanding of Budget and Budgetary Control principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Budget and Budgetary Control MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Budget and Budgetary Control. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

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Q41.
What is the purpose of the budget committee in an insurance company?

a.

To limit the scope of budgetary control

b.

To disregard the formation of budget center

c.

To analyze variances

d.

To facilitate the introduction and implementation of a budgetary control system

Discuss
Answer: (d).To facilitate the introduction and implementation of a budgetary control system Explanation:The budget committee generally consists of senior members of the organization and is involved in facilitating the introduction and implementation of a budgetary control system.
Q42.
What is the role of a budget committee in the preparation of budgets?

a.

Only coordination

b.

Only analysis of variances

c.

Coordination of the preparation of budgets, including the issue of a manual

d.

Only determination of actual results

Discuss
Answer: (c).Coordination of the preparation of budgets, including the issue of a manual Explanation:A budget committee plays a role in the coordination of the preparation of budgets, including the issue of a manual.
Q43.
What is one of the roles of a budget officer in budget administration?

a.

Only compiling information about actual performance

b.

Only dealing with budgetary control problems

c.

Liaising between the budget committee and managers responsible for budget preparation

d.

Only educating people about budgetary control

Discuss
Answer: (c).Liaising between the budget committee and managers responsible for budget preparation Explanation:One of the roles of a budget officer is liaising between the budget committee and managers responsible for budget preparation.
Q44.
What is the responsibility of the budget officer regarding deviations or variances?

a.

Determining deviations/variances

b.

Ascertaining causes of deviations/variances and informing the same to the appropriate authority/budget committee

c.

Only bringing to the attention of the budget committee the need for the revision of the budget

d.

Only compiling information about actual performance

Discuss
Answer: (b).Ascertaining causes of deviations/variances and informing the same to the appropriate authority/budget committee Explanation:A budget officer is responsible for ascertaining causes of deviations/variances and informing the same to the appropriate authority/budget committee.
Q45.
What is the purpose of a budget committee's role in making recommendations for changes in budget policies and procedures?

a.

To restrict the budgetary control process

b.

To avoid dealing with budgetary control problems

c.

To facilitate the introduction of budgetary control

d.

To disregard the need for a budget officer

Discuss
Answer: (c).To facilitate the introduction of budgetary control Explanation:A budget committee's role in making recommendations for changes in budget policies and procedures is to facilitate the introduction and implementation of budgetary control.
Q46.
How does a budget officer contribute to budget administration?

a.

Only educating people about budgetary control

b.

Only dealing with budgetary control problems

c.

Only compiling information about actual performance on a continuous basis

d.

Liaising between the budget committee and managers responsible for budget preparation

Discuss
Answer: (c).Only compiling information about actual performance on a continuous basis Explanation:A budget officer contributes to budget administration by compiling information about actual performance on a continuous basis.
Q47.
What is a Budget Manual?

a.

Only a set of instructions

b.

Only a document specifying roles and responsibilities

c.

Only a set of guidelines

d.

A document specifying a set of instructions and guidelines governing roles and responsibilities, and procedures, providing forms and formats required for preparation and use of budgets.

Discuss
Answer: (d).A document specifying a set of instructions and guidelines governing roles and responsibilities, and procedures, providing forms and formats required for preparation and use of budgets. Explanation:A Budget Manual can be defined as a document that specifies a set of instructions and guidelines governing roles and responsibilities, and procedures, providing forms and formats required for the preparation and use of budgets.
Q48.
What does the Budget Manual contain information about?

a.

Only budget periods

b.

Only the categorization of expenses

c.

Only the organization of budgetary control

d.

Budget periods, forms, factors to be considered, categorization of expenses, classification of revenues, and various procedures related to budgeting.

Discuss
Answer: (d).Budget periods, forms, factors to be considered, categorization of expenses, classification of revenues, and various procedures related to budgeting. Explanation:The Budget Manual contains information about budget periods, forms, factors to be considered, categorization of expenses, classification of revenues, and various procedures related to budgeting.
Q49.
What is one of the purposes of the Budget Manual?

a.

To avoid budgetary control

b.

To restrict the preparation of budgets

c.

To provide procedures for comparison of actual performance with budgets

d.

To eliminate the need for reporting variances

Discuss
Answer: (c).To provide procedures for comparison of actual performance with budgets Explanation:The Budget Manual provides procedures for the comparison of actual performance with budgets.
Q50.
Why is the organization of budgetary control important in the Budget Manual?

a.

To complicate the budgeting process

b.

To avoid the use of forms and formats

c.

To provide guidelines for preparation

d.

Charts the organization of budgetary control

Discuss
Answer: (d).Charts the organization of budgetary control Explanation:The Budget Manual charts the organization of budgetary control, indicating its importance in providing guidance for the budgeting process.
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