FA Budgeting and Forecasting

Question 1

What type of budget is adjusted based on actual activity levels rather than fixed predetermined amounts?

Accepted Answer

Flexible Budget

Answer

Static Budget

Answer

Zero-Based Budget

Answer

Master Budget

Question 2

In zero-based budgeting, every budget cycle begins with:

Accepted Answer

A zero base where all expenses must be re-justified

Answer

Last year's approved budget plus adjustments

Answer

Only capital expenditure requests

Answer

A percentage increase from prior year

Question 3

Which budgeting method allocates resources based on a company's strategic objectives and priorities?

Accepted Answer

Priority-Based Budgeting

Answer

Incremental Budgeting

Answer

Activity-Based Budgeting

Answer

Rolling Budget

Question 4

A rolling forecast typically covers:

Accepted Answer

A continuous future period that is updated regularly

Answer

A fixed 12-month calendar year

Answer

Only the current quarter

Answer

The prior 12 months of actuals

Question 5

Which variance occurs when actual costs exceed budgeted costs?

Accepted Answer

Unfavorable Variance

Answer

Favorable Variance

Answer

Zero Variance

Answer

Volume Variance

Question 6

What is the master budget?

Accepted Answer

A comprehensive set of budgets that together describe overall company plans

Answer

A budget created only by senior management

Answer

The highest-value capital expenditure budget

Answer

A budget approved by the board of directors only