Zero Base Budgeting requires: MCQ with Answer and Explanation

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Zero Base Budgeting requires:

A. Only incremental changes

B. Justification of every budget item from scratch

C. No justification

D. Using last year's budget as base

Answer: Option B

Solution (By JKSSB Mock Tests)

ZBB starts from a 'zero base', and every function and expenditure must be justified.

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

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Question #1

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Which document serves as the basis for recording transactions in the books of accounts?

A. Financial Statement

B. Source Document

C. Ledger Account

D. Trial Balance

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Correct Answer: Option B

Explanation:
Source documents (like invoices, receipts) provide the objective evidence and basic data for preparing accounting vouchers.

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Question #2

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Social Accounting primarily benefits:

A. Government only

B. Society at large by disclosing social costs and benefits

C. Competitors

D. Shareholders only

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Correct Answer: Option B

Explanation:
It provides information to stakeholders about the social impact of an entity.

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Question #3

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The 'Engagement Letter' in audit is:

A. Tax notice

B. A letter of appointment of auditor

C. The audit programme

D. A written agreement between auditor and client detailing scope and terms of audit

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Correct Answer: Option D

Explanation:
Engagement letter formalises the audit engagement.

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

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