A: Zero-Based Budgeting requires justification for all expenses. R: It starts with a zero base for every new period. Choose the correct option. MCQ with Answer and Explanation

A: Zero-Based Budgeting requires justification for all expenses. R: It starts with a zero base for every new period. Choose the correct option.
A. A is true but R is false
B. A is false but R is true
C. Both A and R are true but R is NOT the correct explanation of A
D. Both A and R are true and R is the correct explanation of A
Answer: Option D
Solution (By JKSSB Mock Tests)
ZBB requires managers to justify every item of expenditure from scratch. This is because it starts with a 'zero base' for each new period, rather than using the previous year's budget as a baseline. R correctly explains A.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Voucher' approach in accounting helps to:
A. Compute tax
B. Prepare trial balance
C. Simplify journal entries
D. Ensure documentation and authorisation of transactions

Correct Answer: Option D


Explanation:
Voucher system ensures that every transaction is supported by documentary evidence and approval.

Question #2
A high Inventory Turnover Ratio generally indicates:
A. Efficient inventory management and fast sales
B. Slow-moving inventory
C. Low sales volume
D. Overstocking

Correct Answer: Option A


Explanation:
It means the company replenishes and sells its inventory quickly, pointing to strong sales and efficient management.

Question #3
The 'Borrowing Costs' (Ind AS 23) that are directly attributable to acquisition, construction, or production of a qualifying asset are:
A. Expensed immediately
B. Ignored
C. Written off over 10 years
D. Capitalised as part of the cost of that asset

Correct Answer: Option D


Explanation:
Borrowing costs on qualifying assets are capitalised.