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 is fixed for the period

B. Only prepared for variable costs

C. A budget that changes with the level of activity

D. A master budget

Answer: Option C

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

Which of the following is an extraordinary item?

A. Sale of goods

B. Salary paid

C. Purchase of raw material

D. Loss due to fire in a factory (not regular)

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Correct Answer: Option D

Explanation:
Extraordinary items are unusual and infrequent, e.g., loss from natural disaster, expropriation.

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Question #2

Which of the following is typically maintained using the imprest system?

A. Sales Ledger

B. Petty Cash Book

C. Purchase Day Book

D. Main Cash Book

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Correct Answer: Option B

Explanation:
The Petty Cash Book uses the imprest system where a fixed float is maintained and actual expenses are reimbursed periodically.

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

Question #3

A and B share profits 3:2. They admit C with 1/5th share. C brings ₹30,000 as capital and ₹10,000 as goodwill. The total goodwill of the firm is:

A. Cannot determine

B. ₹10,000

C. ₹2,00,000

D. ₹50,000

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Correct Answer: Option D

Explanation:
C's share of goodwill = 1/5 = ₹10,000. So total goodwill = 10,000 × 5/1 = ₹50,000.

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