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WorksheetsModule 4: Allocation
Total questions: 24
Worksheet time: 8mins
Why is visibility an important benefit of cost allocation?
It reduces the need for financial reporting
It shows who is spending what and where money is going
It eliminates cloud costs
It automates billing processes
How does cost allocation improve accountability?
By hiding costs from teams
By centralising all spending in IT
By making teams aware of their own spending
By increasing fixed budgets
Which allocation benefit directly supports budget planning and control?
Visibility
Accountability
Budget Management
Chargeback
What is the primary goal of chargeback and showback models?
To remove finance from cloud decisions
To allocate costs to departments based on usage
To eliminate cloud waste automatically
To standardise accounting rules
Which statement best describes chargeback?
Costs are shown for awareness only
Costs are ignored by departments
Costs are billed directly to the department’s budget
Costs are estimated annually
Which statement best describes showback?
Departments are billed for usage
Costs are hidden from teams
Costs are reported for awareness without billing
Costs are removed from financial reports
Which model creates higher accountability?
No allocation
Showback
Chargeback
Fixed IT budgets
Why does chargeback usually lead to better cost control?
It is easier to implement
It has no financial impact
Departments pay for what they use
It eliminates the need for reporting
Which model is simpler to implement?
Chargeback
Showback
Amortisation
TBM
When should an organisation choose showback?
When aggressive cost reduction is required
When internal billing systems already exist
When starting a culture of transparency and awareness
When budgets must be enforced strictly
What is amortisation?
Immediate expensing of all assets
Spreading the cost of an intangible asset over its useful life
Allocating cloud costs to teams
Charging departments monthly
Which of the following is commonly amortised?
Office rent
Electricity bills
Software development costs
Monthly cloud usage
Why can’t intangible assets be expensed fully in the year of acquisition?
They are too expensive
Accounting standards prohibit it
Their benefits extend over multiple years
They are non-cash items
How is amortisation reflected in financial statements?
Only on the cash flow statement
As a non-cash expense and reduced asset value
As revenue
Only in budgeting reports
Which amortisation method allocates cost evenly over time?
Declining balance
Accelerated method
Straight-line amortisation
Variable allocation
What is the purpose of transparent financial reporting?
To reduce audits
To hide sensitive information
To accurately record and present financial transactions
To speed up billing
Why are internal controls important?
They increase cloud usage
They safeguard assets and prevent fraud
They replace audits
They reduce financial transparency
What is the role of an independent external audit?
To optimise cloud costs
To enforce budgeting rules
To verify the accuracy and fairness of financial statements
To approve IT projects
How does ethical conduct contribute to goodwill?
By reducing taxes
By encouraging irresponsible spending
By ensuring trustworthy financial operations
By eliminating audits
What is the primary purpose of the TBM taxonomy?
To manage only cloud costs
To align IT spending with business outcomes
To replace accounting standards
To automate billing
How does TBM support cost optimisation?
By hiding IT expenses
By standardising and clarifying IT costs
By fixing budgets annually
By removing accountability
Why is TBM valuable beyond the cloud?
It applies only to SaaS
It ignores non-cloud IT costs
It provides insight into all IT spending
It replaces FinOps
How does TBM enhance decision-making in FinOps?
By reducing transparency
By focusing only on speed
By providing clear cost insights to balance cost, speed, and quality
By eliminating financial planning
What benefit does TBM bring to forecasting and planning?
Less accuracy
Fixed predictions
Improved accuracy of IT cost forecasts
Removal of budgets
