Functional Budget Quiz

What is the primary purpose of budgeting?

• To explore additional products

• To increase sales

• To make plans explicit

• To reduce costs

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

• Sales budget

• Production budget

• Cash budget

• Marketing budget

What does the control aspect of budgeting involve?

• Communicating with staff

• Ensuring plans are achieved

• Setting sales targets

• Motivating employees

What is the main advantage of budgeting?

• It requires no management involvement

• It eliminates all costs

• It ensures planning takes place

• It guarantees profit

What is the purpose of a cash budget?

• To set production targets

• To track sales performance

• To record expected cash inflows and outflows

• To manage inventory levels

Which of the following is a disadvantage of budgeting?

• It improves communication

• It can be time-consuming

• It motivates staff

• It helps in resource allocation

What is the role of communication in budgeting?

• To reduce costs

• To inform staff of management's expectations

• To evaluate performance

• To increase sales

What does the evaluation aspect of budgeting allow management to do?

• Motivate employees

• Communicate with staff

• Measure actual performance against budgets

• Set new sales targets

What is the significance of variance analysis in budgeting?

• To motivate employees

• To identify discrepancies between planned and actual performance

• To allocate resources effectively

• To set future sales targets

How does participative budgeting benefit an organization?

• It guarantees financial success

• It simplifies the budgeting process

• It increases employee engagement and ownership

• It reduces the time spent on budgeting