Budgets HL Review Quiz

These are departments of a business that incur costs but are not involved in generating any profit.

• Profit Centre

• Cost Centre

• Cash flow forecast

• Variance Analysis

These are departments of a business that incur both costs and revenues.

• Profit Centre

• Cost Centre

• Cash flow forecast

• Variance Analysis

Which is an example of a cost centre?

• Franchise

• Sales department

• Human resources

• Chain stores

Which is an example of a profit centre?

• Administrative office

• Marketing

• Human resources

• Chain stores

Which is not a role and function of cost and profit centres?

• makes better decisions for centre managers

• dependent on decision making

• monitor cost and revenues

• monitoring team's performance

Which of the following is an advantage of cost and profit centres?

• subjective allocation of indirect costs

• promotes team spirit

• tension and conflict on members

• time consuming data allocation

Which of the following is a disadvantage of cost and profit centres?

• added pressure on staff

• eliminates cost classifications

• allow benefits for benchmarking

• improves motivation

A financial plan of expected revenue and expenditure for an organization, or a department within an organization, for a given time period.

• Net profit

• Cash flow forecast

• Variance analysis

• Budget

Which of the following are the considerations for setting budgets?

• available finance

• historical data

• organizational objectives

• benchmarking

It is looking at the difference between the budgeted figure and the actual expenditure figure.

• Cash flow forecast

• Variance analysis

• Budgets

• Net profit