Budget

Correct answer: A. So they can understand targets and limits

Budget information helps employees understand work expectations. Remember communication of budget in exams.

Correct answer: A. When targets are clear and measurable

Clear and measurable targets make control easier. Link measurable targets with control in exams.

Correct answer: A. Priority of expenses becomes clear

An expense list helps identify necessary and less necessary expenses. Remember expense prioritization in exams.

Correct answer: A. Financial uncertainty

A budget reduces financial uncertainty by giving advance estimates. Remember uncertainty reduction in exams.

Correct answer: A. It is a numerical plan of future income expenses and resources

A budget expresses a future plan in numbers and limits. Remember a definition based summary in exams.

Correct answer: B. Overall budget of major budgets

The direct answer is B: the overall budget of major budgets. A master budget is the broad, combined financial plan of an organisation for a future period. It is prepared by bringing together important separate budgets, such as the sales budget, production budget, purchase budget, expense budget, cash budget and sometimes projected financial statements. The reasoning is: separate departments prepare their estimates; these estimates are coordinated; the combined plan shows the organisation’s overall expected activities and financial position. Option B is correct because “overall budget of major budgets” is the meaning of master budget. Option A is too narrow: a cash plan is only one component, not the whole master budget. Option C is an attendance list, which records employees’ presence and is not a financial plan. Option D is only an advertising plan, another limited functional plan. Memory cue: master budget is the “parent” or summary budget; individual budgets are its parts.

Correct answer: A. Coordination and review of budgets

A budget committee coordinates and reviews budgets of different departments. Remember its coordination role in exams.

Correct answer: B. Time for which budget is prepared

Budget period is the definite time for which estimates are prepared. In exams treat period as time frame.

Correct answer: B. Daily or normal business activities

An operating budget is linked with income and expenses of normal activities. In exams connect operating budget with regular operations.

Correct answer: A. To provide a basis for estimates

Assumptions give a base for future estimates. Link assumptions with budget preparation in exams.

Correct answer: B. Receipts are more than payments

Cash surplus occurs when estimated receipts are more than payments. In exams understand surplus as extra cash.

Correct answer: A. नकद प्राप्तियां नकद भुगतानों से कम हैं

A cash deficit occurs when cash receipts during a period are lower than cash payments. In this situation, the business may not have enough cash to meet all due payments and may need a loan or another source of funds. Option B represents a cash balance, not a deficit. Exam tip: In a cash budget, receipts < payments indicates a cash deficit.

Correct answer: B. Production budget

Sales estimates can affect production quantity. Remember the relation between sales and production budgets in exams.

Correct answer: A. Extra storage cost

Buying excess material can create storage and blocked capital problems. Remember inventory cost in exams.

Correct answer: A. Production may stop

Too little material can interrupt production. In exams link material budget with production continuity.

Correct answer: B. Office expenses

An administrative expense budget estimates office and management expenses. Link admin budget with office expenses in exams.

Correct answer: A. For maintenance of machines and equipment

Repair expense is a planned cost for fixing, servicing, or restoring machines, tools, buildings, or other operating equipment. Including it in a budget helps an organisation keep resources in usable condition and reduces the risk of unexpected interruption. Regular maintenance can also support safe working, reliable production, and longer useful life of equipment. The amount should be estimated from the likely maintenance needs and available records.

Thus, repair expense may be included for the maintenance of machines and equipment, which is option A. It is a real operating requirement connected with keeping work running, even when no repair is needed on the budgeting date. The other choices have no logical relation to repair costs: changing employee names, hiding product colour, and stopping sales do not explain this budget item. Therefore, option A is correct.

Correct answer: A. Employee skill development

Training expense is kept to improve employee capability. In exams connect training budget with skill development.

Correct answer: A. Necessary activities get funds

Priority ensures resources are available first for necessary work. Remember priority allocation in exams.

Correct answer: A. Clear income and expense details

Clear details help everyone understand income and expense position. Link transparency with clear records in exams.

Correct answer: A. Unit for whose results someone is responsible

A responsibility centre fixes accountability of a department or manager. Link responsibility centre with accountability in exams.

Correct answer: A. They provide a basis for comparison

Standards make comparison of actual performance easy. Treat standard as comparison base in exams.

Correct answer: A. To report budget and actual results

A budget report is prepared to communicate planned budget figures together with actual results. It helps managers see whether income, costs, production, or other activities followed the plan. By comparing the two sets of figures, they can identify variances, understand progress, and take corrective action when performance is not satisfactory. The report is therefore a management and control document, not a decorative or unrelated record.

Option A is correct because reporting the budget and actual results is its central purpose. If the budgeted expense was 10,000 but the actual expense was 12,000, the report makes the 2,000 difference visible. Managers can then investigate the reason and revise action if needed. The other choices have no connection with budgetary control. The supplied answer correctly identifies the main objective of a budget report.

Correct answer: A. Quick control and decision

A short-term budget helps quick review and control. Link short-term budget with quick control in exams.

Correct answer: A. Large capital plans

A long-term budget may relate to large investments and long period plans. Link long-term budget with capital planning in exams.