Element 8 8.1.7_basic_accounting_techniqueQuiz

Why is it important to maintain accurate financial records?

• To avoid penalties

• To confuse competitors

• To increase sales

• To reduce workload

What is the primary purpose of a financial audit?

• To increase profits

• To verify accuracy of financial statements

• To create budgets

• To hire new employees

What is bookkeeping?

• Recording and organising financial transactions

• Setting sales targets

• Creating marketing plans

• Hiring employees

How does bookkeeping contribute to a business?

• By providing financial data for decision making

• By developing new products

• By increasing market share

• By reducing employee turnover

What is a fixed budget?

• A budget that changes frequently

• A budget set for a specific period without change

• A budget that includes variable costs

• A budget used only for large companies

What is a feature of a flexible budget?

• It remains constant

• It adjusts based on actual activity levels

• It excludes fixed costs

• It is only used annually

What is an advantage of using a fixed budget?

• It allows for easier forecasting

• It adjusts to changes in activity

• It reduces the need for financial audits

• It is more complex to create

What is a disadvantage of a fixed budget?

• It can be inflexible

• It adapts to changes easily

• It requires frequent updating

What is budgetary control?

• Setting sales targets

• Comparing actual performance with the budget

• Hiring new employees

• Developing new products

What is the function of an internal audit?

• To develop new products

• To ensure compliance with laws and regulations

• To increase sales

• To create marketing strategies