In budgetary control, a 'Flexible Budget' is: MCQ with Answer and Explanation

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In budgetary control, a 'Flexible Budget' is:

A. A budget that changes with the level of activity

B. Only prepared for variable costs

C. A budget that is fixed for the period

D. A master budget

Answer: Option A

Solution (By JKSSB Mock Tests)

Flexible budget adjusts for different levels of output.

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

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Question #1

The 'Engagement Risk' is different from audit risk; it relates to:

A. Risk of loss or injury to the auditor's professional practice from litigation, adverse publicity, etc.

B. Inherent risk

C. Detection risk

D. Risk of material misstatement

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Correct Answer: Option A

Explanation:
Engagement risk is a business risk for the auditor.

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

Question #2

S1: Bank Reconciliation Statement is prepared to find the causes of difference between Cash Book and Pass Book. S2: BRS is prepared on a specific date. Which statement(s) is/are correct?

A. S2 only

B. Neither S1 nor S2

C. S1 only

D. Both S1 and S2

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Correct Answer: Option D

Explanation:
The primary objective of BRS is to identify and explain the reasons for the difference in balances between the Cash Book and the Bank Pass Book. It is always prepared for a specific date to compare the balances on that day. Both are correct.

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

Question #3

Which of the following is a personal account?

A. Furniture A/c

B. Discount A/c

C. Capital A/c

D. Rent A/c

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Correct Answer: Option C

Explanation:
Capital account represents the proprietor, hence personal account. Others are nominal or real.

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

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