IGNITE ACADEMY

Subject:
BUDGETING TOPIC MCQ
(Class Notes)

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 BUDGETING TOPIC MCQ

1. Financial Management (With reference to State Government and Technical Institutions).

2. Budget.
3. Budgetary process.
4. Budget Performance.
5. Zero-based budgeting.
6. Audit and Cost Benefit Analysis.
7. Cost reduction techniques related to training.

1. How should the plan for development of the technical/vocational education institute be?
(1) Short-range plan (2) Long-range plan
(3) Operational plan (4) Long-range micro plan
Ans. 4

2. Zero-based budgeting for educational institute is based on

(1) Resource requirements for each objective and goal in financial year
(2) A base budget requirement in financial year
(3) A programme based requirement in financial year
(4) None of the above
Ans. 1

3. The expenditure incurred by Government in construction of educational institution is a/an

(1) Charged expenditure (2) Revenue expenditure
(3) Capital expenditure (4) Expenditure under debt heads
Ans. 3

4. The sectors, sub-sectors, major and sub-major heads and minor heads have been prescribed by
(1) Finance Department (2) Administrative Department
(3) CAG (4) Legislature

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 Ans. 3
5. A comprehensive operational document conceived and presented in terms of functions, programmes
and activities with their financial and physical aspects interlinked is a/an
(1) Annual budget (2) Civil budget
(3) Performance budget (4) Zero-based budget
Ans. 3

6. The expenditure on the maintenance of the schemes of the earlier Five Year Plans classified as non-
plan, includes
(1) Salary and non-salary expenditure
(2) exceptionally large variation in the existing items
(3) Items of schemes of expenditure which are to be introduced for the first time
(4) Items of transfer of institutional property to local bodies
Ans. 1

7. Under World bank assisted project, the Central share released by GOI to the State is deposited in
(1) Administrative Department account
(2) SPIU account
(3) Principals account
(4) Consolidated Fund of State
Ans. 4

8. When will the cost benefit ratio be more in institutions, if State funding is the same?
(1) Starting IRG activities on priority
(2) Providing incentives to industries for in-service training
(3) Delivery of high quality teaching and training performance
(4) Increase retention rate
Ans. 3

9. Financial internal control includes procedures for approval, appropriate documentation, control
exercised by
(1) Department head
(2) Regional head
(3) Treasury at the time of release of payment
(4) Institutional head
Ans. 3

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10. The main budget document is the Annual Financial Statement and is also known as
(1) White Book (2) Green Book
(3) Blue Book (4) Yellow Book
Ans. 2

11. A programme's cost-effectiveness can be assessed on the basis of

a. Social cost b. Private cost
с. Public cost d. Capital cost
(1) a only (2) d only
(3) a and b only (4) a, b and c
Ans. 4

12. The cost benefit analysis is conducted to

(1) Offer a well calculated best alternative
(2) Bring about perfection in terms of economic efficiency
(3) Bring about guarantee of social welfare
(4) Guarantee of profits in a particular project
Ans. 1

13. Which audit is independent of the personnel of the organisation under scrutiny of Audit?
(1) Departmental Audit (2) Internal Audit
(3) Statutory Audit (4) Test Audit
Ans. 3

14. Vote on Account is a process which is resorted to in a situation when

(1) The Legislative Assembly is unable to vote on all demands for grants before the start of the new financial
year
(2) The government needs additional funds to meet expenditure on an entirely new 2 scheme/project
(3) a certain, amount of funds are required to meet expenditure for a part of the financial year and the
Legislative Assembly is not in session
(4) neither the annual financial statement for the full year nor other usual budget documents are required in
this process
Ans. 1

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15. Cost Reduction techniques are applied with a view to
(1) Face the competitive markets while making effort to maintain, if not increase, profits
(2) Locate any duplication of services thereby cutting the superfluous overheads,
(3) To support the conventional cost management system for eliminating unnecessary costs
(4) To give visibility to costs by detailing all the activities of the organisation so that there is focus on cost
reduction opportunities.
Ans. 4

16. Zero Base Budget is a budgeting process that requires an organisation / office to
(1) Prepare its annual budget every year starting from zero expenditure / receipt
(2) Prepare its annual budget adding new expenditure / receipt for the next year and, while doing so, justify
each item from a scratch
(3) Prepare their budget on the basis of previous year with only additional expenditure and receipts of the next
year.
(4) Iocate all the essential items of expenditure and receipts from the angle of propriety
Ans. 2

17. Budget estimate is an annual financial statement which contains

(1) An account of receipts and expenditure
(2) Expenditure and receipts on Revenue and Capital accounts along with public debt
(3) Budget estimates for annual financial year
(4) Financial process with appropriate interventions
Ans. 2

18. What specific purpose is served by the contingency fund?

(1) To supplement the budget
(2) To withdraw money from it to be repaid later in specified period
(3) To meet any unforeseen expenditure
(4) To add to the components of the budget for specific expenditure
Ans. 3

19. The agencies involved in the state budget making process from beginning to end are
(1) Budget controlling officer and finance department only.
(2) Heads of departments and finance department only.
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 (3) Heads of departments, line departments and finance department.
(4) Line departments and finance departments only.
Ans. 3

20. What is meant by supplementary budget / grant?

1. It refers to budgetary process to meet expenditures on either a new project or scheme or provide for charges
not provided in main budget
2. It refers to funds required in addition to total grants authorised by legislature in a financial year
3. It refers to unforeseen expenditure which arises when the main buget is midway through
4. It refers to the meeting of unforeseen expenditure from the main budget
Ans. 2

21. In a budget, various items of expenditure are classified as voted expenditure and charged expenditure.
What is the difference between them?
1. Voted expenditure refers to expenditure that is subject to the approval of the legislature. Charged
expenditure does not require either approval or vote.
2. There is no major difference between the two classifications. Both have to pass through the same process
applied to obtain approval
3. Voted expenditure requires issue of sanctions authorising various departments to incur specified amount of
funds. This process does not take place in the matter of charged expenditure
4. Voted expenditure items are passed through the process of approval by legislature. Charged items of
expenditure are put to vote of the legislature for approval
Ans. 1

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