CSA Financial Management & Budgeting 2

Question 1

A system administrator is asked to justify a hardware refresh by showing the cost over the asset's lifetime. Which financial concept best applies?

Accepted Answer

Total Cost of Ownership (TCO)

Answer

Total Cost of Ownership (TCO) accounts for all costs—purchase, maintenance, support, and disposal—over an asset's entire lifecycle.

Question 2

Your organization uses a chargeback model for IT services. What is the primary purpose of this approach?

Accepted Answer

To allocate IT costs to the business units that consume them

Answer

Chargeback models assign IT costs directly to the consuming business units, promoting accountability and accurate cost attribution.

Question 3

Which budget variance indicates that actual spending exceeded the planned budget?

Accepted Answer

Unfavorable variance

Answer

An unfavorable (or adverse) variance means actual costs were higher than budgeted, signaling overspending.

Question 4

An IT manager wants to spread the cost of a $120,000 server over 5 years on the financial statements. Which accounting method achieves this?

Accepted Answer

Depreciation

Answer

Depreciation allocates the cost of a tangible asset (like a server) over its useful life on the income statement.

Question 5

During budget planning, the IT team is told to start each cost category from zero and justify every dollar. What budgeting method is being used?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires justifying all expenses from scratch each period rather than basing them on prior-year spending.

(CSA) Certified System Administrator Practice Test