Correct Answer:
A. The factor that limits the activities of an organization
Also called the limiting factor; it is usually sales demand, but may be materials, labor or capacity.
November 13, 2026 · Accounting and Finance MCQs, Cost & Management Accounting MCQs
The principal budget factor is:
Related MCQs
The date of the auditor's report should be:
A.
The first day of the financial year
B.
No earlier than the date on which the auditor obtained sufficient appropriate evidence to support the opinion
C.
The date of the annual general meeting only
D.
Any date chosen by management
Correct answer is:
B. No earlier than the date on which the auditor obtained sufficient appropriate evidence to support the opinion
Do you agree with this answer?
Line-item budgeting is a budget format that:
A.
Lists expenditure by inputs such as salaries and supplies
B.
Links spending to results
C.
Starts from zero each year
D.
Excludes salaries
Correct answer is:
A. Lists expenditure by inputs such as salaries and supplies
Do you agree with this answer?
A management representation letter:
A.
Is written confirmation from management that supports other audit evidence but cannot replace it
B.
Is enough evidence on its own for any assertion
C.
Is issued by the auditor to the shareholders
D.
Is needed only for sole proprietorships
Correct answer is:
A. Is written confirmation from management that supports other audit evidence but cannot replace it
Do you agree with this answer?
Pre-audit means that:
A.
Bills and claims are checked before payment is made
B.
Accounts are checked after payment
C.
The audit is done by the court
D.
Audit is skipped
Correct answer is:
A. Bills and claims are checked before payment is made
Do you agree with this answer?
Under the direct write-off method, when a specific receivable is written off as bad:
A.
Accounts receivable is debited and sales is credited
B.
Cash is debited and receivables is credited
C.
Bad debt expense is debited and accounts receivable is credited
D.
Allowance for doubtful debts is debited and cash is credited
Correct answer is:
C. Bad debt expense is debited and accounts receivable is credited
Do you agree with this answer?
The DuPont identity expresses ROE as:
A.
Net profit margin x total asset turnover x equity multiplier
B.
Gross margin x current ratio x debt ratio
C.
Sales / assets only
D.
EPS divided by dividend per share
Correct answer is:
A. Net profit margin x total asset turnover x equity multiplier
Do you agree with this answer?
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