MCQ on Budgeting Components with answers
Here are 10 multiple-choice questions (MCQs) with answers based on the topic "Components of Budgeting":
Which component of budgeting involves estimating the income an organization expects to generate within a given period? a) Revenue budgeting b) Expenditure budgeting c) Performance budgeting d) Capital budgeting
Answer: a) Revenue budgeting
What is the purpose of revenue budgeting? a) To estimate expenses b) To measure program effectiveness c) To ensure resource allocation d) To evaluate investment projects
Answer: c) To ensure resource allocation
What method of revenue budgeting involves projecting past revenue trends into the future? a) Zero-based budgeting b) Sensitivity analysis c) Discounted cash flow method d) Historical data analysis
Answer: d) Historical data analysis
Which component of budgeting involves estimating the expenses an organization is likely to incur within a given period? a) Revenue budgeting b) Expenditure budgeting c) Performance budgeting d) Capital budgeting
Answer: b) Expenditure budgeting
What is the purpose of expenditure budgeting? a) To estimate income b) To measure program effectiveness c) To ensure resource allocation d) To evaluate investment projects
Answer: c) To ensure resource allocation
Which method of expenditure budgeting involves starting from scratch and justifying every expense for each period? a) Zero-based budgeting b) Sensitivity analysis c) Discounted cash flow method d) Historical data analysis
Answer: a) Zero-based budgeting
Which component of budgeting links budgetary resources to specific programs or activities and measures their effectiveness? a) Revenue budgeting b) Expenditure budgeting c) Performance budgeting d) Capital budgeting
Answer: c) Performance budgeting
What is the purpose of performance budgeting? a) To estimate income b) To measure program effectiveness c) To ensure resource allocation d) To evaluate investment projects
Answer: b) To measure program effectiveness
Which method of performance budgeting involves categorizing the budget into programs or activities and allocating resources based on their effectiveness? a) Program budgeting b) Sensitivity analysis c) Discounted cash flow method d) Historical data analysis
Answer: a) Program budgeting
Which component of budgeting involves evaluating and selecting long-term investment projects based on their expected cash flows? a) Revenue budgeting b) Expenditure budgeting c) Performance budgeting d) Capital budgeting
Answer: d) Capital budgeting
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