Capital Budgeting MCQs April 27, 2021November 24, 2018 by Abbas Ahmad Please enter your email: 1. The use of budgets to control a firm’s activities is called: Budget planning Budgetary control Master budget allocation Budget costing 2. The term which refers to management being held responsible for those items and only those items that management can actually control: Control Budgeting Control accounting Personal budgeting Responsibility accounting 3. A 12-month budget that rolls forward (one month is added the end of the budget as each month comes to a close) at a time is called: Perpetual budget Zero-based budget Self-imposed budget Participative budget 4. A budget that requires management to justify all expenditures, rather than just changes from the previous year, is referred to as: Perpetual budget Zero-based budget Self-imposed budget Participative budget 5. Usually, the first step in the production of the master budget is the: Sales forecast Cash Budget Production budget 6. Which of the following is true about the company’s direct materials budget? Preparing a budget of this kind is one step in a company’s overall material requirements planning (MRP) In the direct material budget, ending inventory is added and beginning inventory is subtracted In the direct materials budget, beginning inventory is subtracted and ending inventory is added The first line of the direct materials budget provides for the total raw materials to be purchased for the month or the quarter. 7. Which of the following is not a section of the Cash budget? Cash receipts Cash excess or deficiency Financing All of the above are a part of the Cash budget Loading … Next Quiz: Flexible Budgets Related posts: Budgets for a manufacturing business Revenue and cash budgets Capital Budgeting The Manufacturing Cost Budget What are the limitations of budgeting?