IIA Exam IIA-CIA-Part3 Topic 1 Question 73 Discussion

Actual exam question for IIA's IIA-CIA-Part3 exam

Question #: 73
Topic #: 1

Which of the following statements is true regarding the term "flexible budgets" as it is used in accounting?

AThe term describes budgets that exclude fixed costs.

BFlexible budgets exclude outcome projections, which are hard to determine, and instead rely on the most recent actual outcomes.

CThe term is a red flag for weak budgetary control activities.

DFlexible budgets project data for different levels of activity.

Show Suggested Answer

Suggested Answer: D

by Ernie at Mar 06, 2024, 08:12 PM

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5 months ago

Myra, I see your point. But I think the correct answer is D) because flexible budgets are meant to adapt to different levels of activity.

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5 months ago

I'm not sure about that. I think it might be B) Flexible budgets exclude outcome projections and rely on actual outcomes.

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5 months ago

I agree with Gertude. Flexible budgets are designed to adjust based on changes in activity levels.

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6 months ago

I think the answer is D) Flexible budgets project data for different levels of activity.

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