What is a budget?

• A plan for the past

• A method of saving money

• A quantitative expression of a plan for a defined period

• A type of financial report

Which of the following is NOT a characteristic of a budget?

• A verbal agreement

• Prepared for a future period

• A written document

• A plan of action

What is the main objective of budgeting?

• To create confusion

• To aid in planning and controlling

• To increase costs

• To avoid communication

What does the Budgetary Control Cycle involve?

• Only preparing plans

• Comparing actual performance with budget

• Ignoring variances

• Only revising the budget

Which budgeting approach starts from the top management?

• Top-down budgeting

• Participatory budgeting

• Incremental budgeting

• Bottom-up budgeting

What is a disadvantage of bottom-up budgeting?

• Encourages participation

• Provides detailed understanding

• Time-consuming process

• Increases motivation

What does zero-based budgeting require?

• Only focusing on fixed costs

• Using last year's budget as a base

• Ignoring all previous budgets

• Justification of all budgeted expenditures

What is a rolling budget?

• A budget that is fixed for a year

• A budget that ignores past performance

• A budget that is only reviewed once a year

• A budget that is continuously updated

What is the main focus of activity-based budgeting?

• Departmental budgets

• Specific activities or tasks

• Historical data

• Random spending

What does Kaizen budgeting emphasize?

• Large budget changes

• Ignoring employee feedback

• Continuous improvement

• Strict control over costs