FREE Accounting Technician Budgeting & Cost Control Questions and Answers
What is the difference between fixed and variable costs?
Correct!
Wrong!
Fixed costs remain constant regardless of production levels, while variable costs fluctuate with business activity.
Why is cost control important in financial management?
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Wrong!
Cost control ensures businesses minimize unnecessary expenses and maximize profitability while maintaining efficiency.
What is the primary purpose of budgeting in business?
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Budgeting helps businesses plan their finances by allocating resources effectively and ensuring financial stability.
Why is forecasting important in budgeting?
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Wrong!
Forecasting helps businesses predict future financial trends, ensuring they allocate resources effectively and manage risks.
Which budgeting method starts from scratch each period and requires justification for all expenses?
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Wrong!
Zero-based budgeting requires each expense to be justified from the ground up, rather than being based on previous budgets.
What financial document helps businesses track their budget performance?
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A budget variance report compares actual financial performance against budgeted figures to assess discrepancies.