MCQ on Budgeting Components with answers

MCQ on Budgeting Components with answers

 Here are 10 multiple-choice questions (MCQs) with answers based on the topic "Components of Budgeting":

  1. 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

  2. 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

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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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