SECTION A 1. Which is the name given to a budget that allows for comparisons to be made for different levels of activity A. Flexible budget B. Zero based budget C. Static budget D. Basic budget 2. In a master budget, the schedule of cash disbursements for purchases of inventory is used to prepare the: A. operating expense budget B. purchases budget C. capital budget D. cash budget 3. What is a budget prepared for one expected level of activity called? A. Flexible budget B. Static budget C. Variable budget D. Rolling budget 4. All the following statements regarding budgeting are true, EXCEPT: A. Budgeting helps managers to determine the resources needed to meet their goals and objectives B. Budgeting is a key ingredient in good decision-making C. Budgeting is a bookkeeping task D. The focus of budgeting is planning 5. Which of the following is the usual starting point for budgeting? A. The sales budget B. The labour budget C. The production budget D. The material budget (5 marks)