Which of the following is NOT one of the purposes of budgets?

BT9.1

Quiz
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Professional Development
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Professional Development
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Medium
Timur Ananyev
Used 2+ times
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
responsibility for expenditure
motivation of employees
co-ordination of staff
costing of units
Answer explanation
The purpose of budgets includes responsibility for expenditure, motivation of employees, and co-ordination of staff. However, costing of units is not a primary purpose of budgets, making it the correct answer.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following statements regarding integrated reports is correct?
They involve the merging of the other financial statements to produce an overall view of company performance
They are designed to show the organisation’s profitability more clearly
They include information on anything that is felt to be of interest to the users of the financial statements
They include only relevant financial information for the users of the financial statements
Answer explanation
Integrated reports provide a holistic view by including diverse information that interests users, not just financial data. This makes the correct choice about including all relevant information for users.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does the term 'true and fair view' in financial statements imply?
The statements must follow all appropriate accounting standards
The statements must be audited by external parties
The statements must be approved by the shareholders
The statements must be prepared in a specific format
Answer explanation
The term 'true and fair view' implies that financial statements must adhere to all relevant accounting standards, ensuring accuracy and reliability in reporting.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An important advantage of using loans to finance investment is:
loan interest payments can usually be suspended if profits are low
the timing of loan payments is often at the company’s discretion
loan interest is tax deductible
banks will often not require security for loan advances
Answer explanation
The directors are responsible for producing financial statements under company legislation, as they oversee the company's financial reporting and ensure compliance with legal requirements.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the main role of the IFRS Foundation?
To prepare financial statements
To develop and promote financial reporting standards
To enforce tax regulations
To manage corporate finance
Answer explanation
The IFRS Foundation's main role is to develop and promote financial reporting standards, ensuring consistency and transparency in financial statements globally. This is crucial for investors and stakeholders.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which function is primarily concerned with internal management and planning?
Financial accounting
Management accounting
Treasury management
Regulatory compliance
Answer explanation
Management accounting focuses on internal management and planning by providing relevant financial and non-financial information to help managers make informed decisions, unlike financial accounting which is more external.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a key benefit of preparing budgets in management accounting?
They eliminate the need for financial audits
They are used to prepare financial statements
They provide a basis for management appraisal
They ensure compliance with tax laws
Answer explanation
A key benefit of preparing budgets in management accounting is that they provide a basis for management appraisal, allowing for performance evaluation against set financial goals.
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