Budgetary control: five questions to try now
Real past-paper questions, the answer key from the mark scheme, and the explanation that goes with it. No account needed to answer them.
Question 1
Which statements about a budgetary control system are correct?
1 It is a long-term plan.
2 It is a short-term plan.
3 It is qualitative.
4 It is quantitative.
Answer: D.
Question 2
Which statements about budgeting are correct?
1 Accurate overhead allocations are always made.
2 Managers may make budgets easy to achieve.
3 Financial factors are considered.
4 Very little time is taken to produce the budget.
Answer: C.
Question 3
What are the disadvantages of budgetary control systems?
1 Budget holders can be blamed for uncontrollable adverse outcomes.
2 Only financial outcomes are measured and considered.
3 Rigid decision-making often occurs.
Answer: A.
Question 4
What are possible limitations of a budgetary control system?
1 Budgets are based on estimates.
2 Budgets may lead to staff demotivation.
3 Budgets may prevent managers from being creative.
Answer: C.
Question 5
Why might a business use budgets?
1 to determine the level of demand for its product
2 to have a benchmark against which to assess actual performance
3 to know how much raw material suppliers will be able to supply
Answer: D.
What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to budgetary control. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
What examiners see students get wrong here
These are the errors that cost marks on budgetary control, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Comparing actual results with the original budget when output differed.
- Flexing the fixed costs.
- Labelling a cost above budget as favourable because the number rose.
- Giving a cause that does not fit the direction of the variance.
- Treating each variance in isolation when two of them clearly share a cause.
- Recommending that every variance be investigated.
- Answering a behavioural question with more arithmetic.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Budgetary control revision notes.