Tag: commercial studies

Questions Related to commercial studies

Sales budget is a _______________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Master budget

  2. Expenditure budget

  3. Functional budget

  4. Cash budget

Show answer
Correct Option: C
Explanation:

A functional budget for the manufacture of a product line might include estimated costs of production, marketing, sales, labor, equipment and materials, as well as projected sales income.

___________ is a summary of all functional budgets in a capsule form.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Master budget

  2. Cash budget

  3. Flexible budget

  4. Zero-base budget

Show answer
Correct Option: A
Explanation:

The Master Budget is consolidated summary of the various functional budgets. It has been defined as “a summary of the budget schedules in capsule form made for the purpose of presenting, in one report, the highlights of the budget forecast”.

A detailed plan of operation for some specific future period is called _____________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Budget

  2. Execution

  3. Decision making

  4. Planning

Show answer
Correct Option: A
Explanation:

A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.

a) There is no difference between a forecast and a budget
b) Sales budget is the most important budget among all budgets.
Of these

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Both (a) and (b) are true

  2. (a) is false, but (b) is true

  3. (a) is true, but (b) is false

  4. Both (A) and (B) are false

Show answer
Correct Option: B
Explanation:

Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends.

A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.
A sales budget is only an estimate of anticipated revenues, it is a vital means of projecting income based on factors such as economic conditions, competition, production resources and expenses.

The essential of budget.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Prepared in advance

  2. Relates to a future period

  3. Statement expressed in monetary or physical units

  4. All the above

Show answer
Correct Option: D
Explanation:
  1. It is an estimate of the economic activities of an entity which related to a specified future period.
  2. It must be written and approved by the appropriate authority.
  3. It should be modified or corrected, whenever, there is a change in circumstances.
  4. Statement expressed in monetary or physical units
  5. It is prepared on the basis of past experiences and trends in the business.
  6. It is a business practice, which is used to forecast the operating activities and financial position of the business.
  7. Prepared in advance

The budget manual is a _____________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Written document

  2. Booklet

  3. Either (A) or (B)

  4. Oral document

Show answer
Correct Option: C
Explanation:

A budget manual is a set of rules and instructions used by large organizations to prepare their budgets and related reports. 

A cash budget can be prepared by ______________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Receipts and Payments Method

  2. The Adjusted Profit and Loss Account Method

  3. The Balance Sheet Method

  4. Any of the above methods

Show answer
Correct Option: D
Explanation:

The following are three methods of preparing cash budget:

(i) Receipt and Payment Method
(ii) Adjusted Project and Loss Method
(iii) Balance Sheet Method

A budget prepared on the basis of a standard or a fixed level of activity is called a ____________.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Fixed budget

  2. Flexible budget

  3. Sales budget

  4. Master budget

Show answer
Correct Option: A
Explanation:

 A fixed budget is a budget that does not change or flex for increases or decreases in volume. ("Volume" could be sales, units produced, or some other activity.) A fixed budget is also known as a static budget.

Father of zero base budgeting.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. L.R. Dicksee

  2. Peter A. Pyhrr

  3. Peter K. Drucker

  4. L.J. Gordon

Show answer
Correct Option: B
Explanation:

Mr. Pyhrr developed zero-based budgeting when he was a controller at Texas Instruments between 1969 and 1971.

__________ shows the anticipated sources and utilisation of cash.

commercial studies budgeting meaning, comparison, types, utility and limitations of budgets public finance, budget and fiscal policy public expenditure and public revenue

  1. Master budget

  2. Cash budget

  3. Sales budget

  4. Flexible budget

Show answer
Correct Option: B
Explanation:

 A cash budget itemizes the projected sources and uses of cash in a future period. 

The Sources of Cash section contains the beginning cash balance, as well as cash receipts from cash sales, accounts receivable collections, and the sale of assets.