IIA Exam IIA-CIA-Part3 Topic 12 Question 77 Discussion

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

Question #: 77
Topic #: 12

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 Lore at May 02, 2024, 08:39 AM

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5 months ago

I'm pretty sure D is correct, it accounts for various scenarios.

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6 months ago

But flexible budgets project different activity levels, not just based on recent actuals.

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6 months ago

I thought B made sense, using recent outcomes sounds accurate.

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7 months ago

Maybe. Flexible budgets do adjust for different levels of activity, right?

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7 months ago

Yeah! I think the answer might be D.

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7 months ago

Did you see the question on flexible budgets?

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