Accounting Technician Budgeting & Cost Control

Question 1

What is the primary purpose of budgeting in business?

Accepted Answer

Plan finances and allocate resources effectively

Answer

Increase company expenses

Answer

Avoid financial planning

Answer

Eliminate financial tracking

Question 2

Which budgeting method starts from scratch each period and requires justification for all expenses?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Fixed budgeting

Answer

Flexible budgeting

Question 3

Why is cost control important in financial management?

Accepted Answer

Minimize expenses and maximize profitability

Answer

Increase overhead costs

Answer

Eliminate budgeting requirements

Answer

Ignore financial performance

Question 4

What is the difference between fixed and variable costs?

Accepted Answer

Fixed costs remain constant, variable costs fluctuate

Answer

Both costs change monthly

Answer

Fixed costs depend on production levels

Answer

Variable costs never change

Question 5

What financial document helps businesses track their budget performance?

Accepted Answer

Budget variance report

Answer

Balance sheet

Answer

Cash flow statement

Answer

Profit and loss statement

Question 6

Why is forecasting important in budgeting?

Accepted Answer

Predict financial trends and manage risks

Answer

Eliminate financial planning

Answer

Increase unexpected expenses

Answer

Ignore budget limitations