1. Which of the following is a type of budget that shows the expected results of

various levels of activity?

a) Flexible budget

b) Static budget

c) Zero-based budget

d) Incremental budget

Answer: A. A flexible budget is a type of budget that shows the expected results of

various levels of activity. It can be adjusted to reflect changes in the volume or mix

of output.

2. Which of the following is a type of budget that is based on a single level of activity

and does not change even if the actual level of activity changes?

a) Flexible budget

b) Static budget

c) Zero-based budget

d) Incremental budget

Answer: B. A static budget is a type of budget that is based on a single level of

activity and does not change even if the actual level of activity changes. It is useful

for planning and control purposes, but it does not reflect the actual performance.

3. Which of the following is a type of budget that requires each manager to justify

every item of expenditure from scratch, as if the activity or project were being done

for the first time?

a) Flexible budget

b) Static budget

c) Zero-based budget

d) Incremental budget

Answer: C. A zero-based budget is a type of budget that requires each manager to

justify every item of expenditure from scratch, as if the activity or project were