AS Business (9609)
2023–2025
Worksheet 19.1: Budgets
Are the following statements true or false?
1. Variance analysis measures
performance, sets more
realistic future budgets, and
assists with decision-making.
2. Adverse variance is a change
in the budget that results in
higher-than-expected profits.
3. Flexible budgeting means
cost budgets for each
expense can vary provided
sales or output vary from
budgeted levels.
4. Zero budgeting adjusts last
year’s budget for the coming
year.
5. Budgeting enables managers
to plan and set realistic future
targets.
6. Budgets increase workers’
motivation, as employees
have targets to work towards.
7. Budgeting for new projects is
always accurate.
8. Comparing actual
performance to a set target is
a way of measuring the
organisation’s performance.
9. Budgeting is future financial
planning that involves setting
performance targets.
10. The best way to measure
performance is by assessing
actual performance against
pre-determined targets over a
period.
(10 marks)
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