1) What is the primary purpose of budgeting? a) To control spending b) To increase profits c) To reduce taxes d) To hire more employees 2) Which of the following is a key benefit of budgetary control? a) Increased wastage b) Improved decision-making c) Decreased accountability d) Lower employee morale 3) What does budgeting help organisations to do? a) Maintain unprofitable operations b) Identify areas for cost reduction c) Increase unnecessary expenses d) Ignore financial performance 4) Which of the following is NOT a component of budgeting? a) Forecasting b) Setting goals c) Monitoring performance d) Increasing debt 5) How does budgeting assist in financial planning? a) By encouraging overspending b) By improving cash flow c) By reducing customer satisfaction d) By disregarding economic conditions 6) What is the purpose of creating a budget? a) To limit financial growth b) To track income and expenses c) To stop business expansion d) To discourage savings 7) How does budgeting contribute to organisational success? a) By increasing inefficiencies b) By limiting innovation c) By encouraging strategic planning d) By disregarding financial performance 8) What role does budgeting play in resource allocation? a) It hinders decision-making b) It encourages waste c) It helps prioritize spending d) It eliminates the need for financial control 9) Which of the following is a common reason for budget variances? a) Overestimating expenses b) Underestimating revenues c) Poor financial management d) Accurate forecasting 10) How does budgeting support long-term financial sustainability? a) By promoting short-term gains b) By encouraging excessive borrowing c) By focusing on immediate profits d) By strategic planning and control

LO B Budgeting

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