Take your time to read instructions before taking this test.

There are 40 questions which you are to answer in 15 minutes that gives you roughly 30 seconds per question.

If you can get at least 60%, you can be rest assured that you’ll ace ACC 206 exam

In a normal exam you will be asked between 40 – 60 questions but I only arranged 40 questions

Note

Do not be in a hurry to answer the questions
Do not waste time on a question you don’t know
Move as fast as possible and starting with questions that don’t have calculation first to save time
Always crosscheck
Don’t be in a hurry to submit, you are not in a competition
Don’t be scared. Getting an A is easy
Don’t be over confident, you can end up a D, E or F. Calm your blood, no be only you sabi book
Please do well to use our comment box incase there’s a message you want to pass to us

70 – 100 A

60 – 69 B

50 – 59 C

45 – 49 D

40 – 44 E

0 – 39 F

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ACC 206

1 / 40

1. Cash budgets help organizations to manage:

A. Sales growth rates

B. Hiring plans

C. Liquidity and cash flow

D. Equipment depreciation

2 / 40

2. A master budget includes:

A. Performance-based incentives

B. Marketing-only expenses

C. Operating, capital, and financial budgets

D. Performance-based incentives

3 / 40

3. Performance evaluation under fixed budgeting compares actual results to:

A. Competitor benchmarks

B. Flexible spending guidelines

C. Industry averages

D. Budget targets set at the beginning

4 / 40

4. The term used to describe costs already incurred and no longer relevant is

A. Replacement cost

B. Sunk cost

C. Opportunity cost

D. Imputed cost

5 / 40

5. Fixed costs under marginal costing are regarded as

A. Direct costs per unit

B. Variable expenses

C. Inventory valuation bases

D. Period costs

6 / 40

6. The equation “Sales - Variable Cost = Contribution” helps in determining

A. Cash flow budget

B. Break-even units only

C. Profit margin after tax

D. Profit by subtracting fixed cost from contribution

7 / 40

7. A major advantage of marginal costing is

A. Elimination of variable cost analysis

B. Simplified treatment of fixed overheads

C. Overstated cost of sales

D. Complex overhead recovery

8 / 40

8. One potential drawback of incremental budgeting is its tendency to:

A. Ignore past performance

B. Reinforce inefficient spending patterns

C. Discourage the use of fixed budgets

D. Encourage zero-based analysis

9 / 40

9. In make-or-buy decisions, internal production is preferred when

A. Overheads are higher than marginal cost

B. Supplier offers a lower price

C. Total variable cost is below supplier’s price

D. Fixed cost exceeds break-even point

10 / 40

10. Marginal costing provides valuable support in

A. Filing annual tax returns

B. Strategic mergers

C. Short-term decision making

D. Preparing capital budgets

11 / 40

11. A key advantage of marginal costing is its

A. Simplified overhead treatment

B. High dependency on fixed costs

C. Complex cost allocation method

D. Confusion with period costs

12 / 40

12. Budgeted income statements are prepared to project:

A. Sales volume

B. Only variable costs

C. Profit or loss for a period

D. Asset depreciation

13 / 40

13. Absorption costing treats fixed overheads as

A. Irrelevant costs

B. Period expenses only

C. Future sunk cost

D. Part of product cost

14 / 40

14. A production budget determines:

A. How much marketing is required

B. The level of administrative costs

C. The cash required for payroll

D. Quantities of goods to be manufactured

15 / 40

15. The purpose of including contingency plans in a budget is to:

A. Maximize departmental budgets

B. Mitigate unexpected financial risks

C. Add unnecessary reserves

D. Minimize fixed expenses

16 / 40

16. Marginal cost reflects the

A. Cost incurred for additional units produced

B. Total overhead cost of production

C. Total direct and indirect costs combined

D. Fixed cost allocation per unit

17 / 40

17. Marginal costing considers only

A. Financial accounting allocations

B. Variable production costs

C. Fixed production costs

D. Total costs including overhead

18 / 40

18. Contribution margin is derived by subtracting

A. Fixed cost from gross profit

B. Total cost from selling price

C. Overheads from net profit

D. Variable cost from sales

19 / 40

19. Absorption costing income statement begins with

A. Gross profit

B. Contribution margin

C. Operating margin

D. Net profit

20 / 40

20. Sunk costs are best described as

A. Marginal costs considered for pricing

B. Opportunity costs related to investment

C. Historical costs with no relevance to decisions

D. Future expenses yet to be incurred

21 / 40

21. Contribution margin equals

A. Sales minus variable cost

B. Gross margin minus cost of

C. Sales minus fixed cost

D. Gross margin minus cost of

22 / 40

22. Relevant costs are identified based on their

A. Certainty and predetermined values

B. Future, differential, and cash-based features

C. Historical nature and fixed value

D. Impact on past financial decisions

23 / 40

23. An incremental budget is developed by making changes to:

A. Industry norms

B. New strategic plans

C. Last year’s budget

D. Competitors’ budgets

24 / 40

24. Budgetary control ensures alignment between actual performance and:

A. Industry benchmarks

B. Sales team projections

C. Budgeted goals and objectives

D. Estimated marketing trends

25 / 40

25. The process of analyzing reasons for differences between actual and budgeted amounts is known as:

A. Performance indexing

B. Variance analysis

C. Audit review

D. Compliance check

26 / 40

26. An incremental budget is developed by making changes to:

A. New strategic plans

B. Competitors’ budgets

C. Last year’s budget

D. Industry norms

27 / 40

27. A key feature of zero-based budgeting is the requirement to:

A. Justify each item from a zero base

B. Avoid including indirect costs

C. Increase all expenses annually

D. Base the budget on last year’s actuals

28 / 40

28. Absorption costing includes

A. Fixed and variable production costs

B. Only variable production costs

C. Only direct labor and materials

D. Excludes any indirect costs

29 / 40

29. Closing stock valuation under marginal costing includes

A. Only variable costs

B. Only fixed costs

C. Administrative overheads

D. All cost elements

30 / 40

30. A zero-based budgeting system requires justification for:

A. Each revenue stream

B. All new capital assets

C. Every single expense

D. Direct labor cost alone

31 / 40

31. A flexible budget is particularly beneficial in environments that are:

A. Predictable and repetitive

B. Highly stable

C. Dynamic and variable

D. Under government control

32 / 40

32. An advantage of a fixed budget is its:

A. Alignment with dynamic goals

B. Simplicity and ease of use

C. Flexibility in volatile markets

D. Emphasis on innovation

33 / 40

33. Budgeting enables organizations to:

A. Avoid paying taxes

B. Outsource key operations

C. Eliminate all financial risks

D. Allocate resources efficiently

34 / 40

34. A capital expenditure budget would most likely include planning for:

A. Employee salaries

B. Office stationery

C. Equipment purchases

D. Utility bills

35 / 40

35. A sales budget helps organizations forecast:

A. Number of employees needed

B. Expected revenue from product sales

C. Overhead expenses

D. Cash flow for asset acquisition

36 / 40

36. Direct labor budgets focus on:

A. Advertising and promotions

B. Production-related labor costs

C. Inventory costs

D. Distribution expenses

37 / 40

37. Performance monitoring in budgetary control involves comparing actual results to:

A. Industry projections

B. Budgeted figures

C. Government statistics

D. Last quarter’s reports

38 / 40

38. The break-even formula derived from marginal costing is

A. Fixed cost / (Selling price – Variable cost)

B. Sales – Fixed cost = Break-even

C. Sales × Cost per unit

D. Fixed cost – Profit

39 / 40

39. Closing inventory under marginal costing is valued at

A. Average market price

B. Selling price per unit

C. Variable cost per unit

D. Full production cost

40 / 40

40. Pricing decisions under marginal costing benefit from

A. Analyzing cost-volume-profit relationships

B. Random cost classifications

C. Ignoring contribution margin

D. Emphasizing total absorption cost

Your score is

The average score is 65%

FUOYE ACC 206 CBT Practice

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