The process of critically reviewing a company's budget to justify every cost as if the activity is being undertaken for the first time is called: MCQ with Answer and Explanation

Question

The process of critically reviewing a company's budget to justify every cost as if the activity is being undertaken for the first time is called:

A. Performance Budgeting

B. Zero-Based Budgeting

C. Flexible Budgeting

D. Master Budgeting

Answer: Option B

Solution (By JKSSB Mock Tests)

Zero-Based Budgeting mandates that no budget base is carried forward automatically; everything must be justified from ground zero.

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

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Question #1

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Rent outstanding is an example of which type of account?

A. Real Account

B. Nominal Account

C. Artificial Personal Account

D. Representative Personal Account

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Correct Answer: Option D

Explanation:
Outstanding expenses represent amounts payable to specific persons, thus classifying them as representative personal accounts.

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

Question #2

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The 'Interest on delayed payment of GST' is:

A. 18% per annum

B. 24% per annum for wrong availment, 18% for others

C. 12%

D. No interest

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Correct Answer: Option B

Explanation:
Under GST, interest for delayed payment is 18% generally, and 24% for undue ITC claim.

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

Question #3

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Under the Single Entry System, if opening capital is Rs 1,00,000, closing capital is Rs 90,000, and drawings are Rs 30,000 (no fresh capital), the profit is:

A. Rs 20,000

B. Rs 40,000

C. Rs 10,000 Loss

D. Rs 20,000 Loss

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Correct Answer: Option A

Explanation:
Profit = Closing Cap + Drawings - Opening Cap = 90,000 + 30,000 - 1,00,000 = Rs 20,000.

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

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