In a flexible budget, the budgeted cost for a given level of activity is based on: MCQ with Answer and Explanation

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In a flexible budget, the budgeted cost for a given level of activity is based on:

A. Previous year actuals only

B. Zero base

C. Recognition of cost behaviour patterns (fixed and variable)

D. Fixed budget only

Answer: Option C

Solution (By JKSSB Mock Tests)

Flexible budget adjusts for different activity levels by separating fixed and variable costs.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

Which of the following is an indirect tax?

A. Corporate Tax

B. Wealth Tax

C. Income Tax

D. Goods and Services Tax (GST)

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Correct Answer: Option D

Explanation:
GST is an indirect tax because the liability to pay is on the seller, but the burden is passed on to the consumer.

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Question #2

The main purpose of preparing a Trial Balance is:

A. To detect frauds

B. To know the financial position

C. To prepare final accounts

D. To check the arithmetical accuracy of ledger accounts

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Correct Answer: Option D

Explanation:
Trial balance ensures that total debits equal total credits, verifying posting and balancing accuracy.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

A 'Cash Generating Unit' is defined under:

A. AS 14 Amalgamation

B. AS 28 Impairment of Assets

C. AS 10 Fixed Assets

D. AS 2 Inventories

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Correct Answer: Option B

Explanation:
CGU is a concept used in impairment testing under AS 28.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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