Budget & Budgetary Control Part 2 Ques
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is a flexible budget and how does it differ from a fixed budget?
A flexible budget adjusts expenditure levels based on actual activity or output achieved, unlike a fixed budget which remains static regardless of actual performance.
What is an adverse variance in budgetary control?
A variance where actual results are worse than budgeted results.
What is the purpose of a cash budget in banking operations?
A cash budget projects cash inflows and outflows over a period to ensure adequate liquidity, helping management plan borrowings or investments to avoid cash shortages or idle funds.
What is a favourable variance in budgetary control?
A variance where actual results are better than budgeted figures.
What does 'budget variance' mean in budgetary control?
Budget variance is the difference between the budgeted figure and the actual figure for any item; a favourable variance means actual results are better than budget, while adverse variance means worse.
What is a material cost variance?
Difference between standard material cost and actual material cost incurred.
What is a master budget?
A master budget is the comprehensive, consolidated budget that integrates all functional budgets (sales, production, cash, capital expenditure, etc.) into a single coordinated plan representing the overall financial position of an organisation.
What does 'budget holder' mean in an organisation?
A manager responsible for controlling costs within an assigned budget.
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