WGU D744 Exam |Introduction to
Business Accounting Exam | Practice
Questions and Correct Answers Rated A+
| Latest 2025/2026 Guide
Why is it important for a business to have a budget
- Correct Answer - Effective budgeting helps making decisions, setting
goals, allocating resources, managing cash flow and meeting financial
goals, to name a few.
Zero-based budgeting
- Correct Answer - A budgeting approach in which each department
starts from zero every year and must justify every item in the budget,
rather than simply adjusting the previous year's budget amounts
Incremental budgeting
- Correct Answer - Form of budgeting in which the prior budget is the
basis for allocation of funds by making incremental changes to the
current budget.
What is the primary reason for using incremental budgeting
- Correct Answer - 1. Easier than starting from scratch
,2. Most businesses change slowly each period, so making incremental
adjustments to budget items is appropriate.
What is the most common way of preparing and incremental budget
- Correct Answer - Take last period's budget and the either x each by a
small % increase or decrease, or +/- an absolute $ amount for each line
item.
What is a major disadvantage of incremental budget
- Correct Answer - An incremental budget assumes last period's budget
is appropriate for this coming period and that nothing has fundamentally
changed-which is not always the case if the company is growing rapidly
or companies that are dramatically changing industries or products-this
could result in a budget that is neither relevant or reliable.
Operations budget
- Correct Answer - Is used to manage spending and resources related
to the operations of a company.
Other uses for operations budget
- Correct Answer - Motivate & reward key employees, set company
goals, influence hiring decisions, and identify changes that must be
made to operations.
,What time period are operation budgets prepared for?
- Correct Answer - Monthly, quarterly, or annually
Sales budget - Correct Answer - An estimate of expected sales revenue
for the budget period
What are some external variables that influence the sales budget?
- Correct Answer - customer taste, economic conditions, and
competitor actions
What are some internal variables that influence the sales budget?
- Correct Answer - Price, quality of products, sales effort, and
advertising expenditures
Cost Budget - Correct Answer - Estimates a company's expected
expenses for a coming period.- these are completed after the sales
estimates are determined.
Examples of what is included in the cost budget
- Correct Answer - production budgets for companies producing their
own products, inventory purchase budges for those buying good from
other companies. It cans also be admin expenses, sales and marketing,
technological expenses- they all affect the overall profitability of a
company.
, Cash Budget - Correct Answer - A budget that estimates cash inflows
and outflows during a particular period like a month or a quarter
What is the cash budget used for? - Correct Answer - Determine if
external financing will be needed, or if excess cash will be available,
what they might do with it-increasing purchases of equipment or paying
down debt.
What is the first budget that a company usually starts the budgeting
process with? - Correct Answer - Sales budget
Examples of what can affect the sales budget - Correct Answer - New
competitor in the area or a New development that will bring in more foot
traffic, like a mall.
What budgets fall under cost budgets - Correct Answer - Labor,
food/product costs, administrative, space needed to serve customers,
price to charge for meals/product, change or add product and
advertisement
Labor Budget - Correct Answer - How many employees are needed/
how much money is needed to pay them
Business Accounting Exam | Practice
Questions and Correct Answers Rated A+
| Latest 2025/2026 Guide
Why is it important for a business to have a budget
- Correct Answer - Effective budgeting helps making decisions, setting
goals, allocating resources, managing cash flow and meeting financial
goals, to name a few.
Zero-based budgeting
- Correct Answer - A budgeting approach in which each department
starts from zero every year and must justify every item in the budget,
rather than simply adjusting the previous year's budget amounts
Incremental budgeting
- Correct Answer - Form of budgeting in which the prior budget is the
basis for allocation of funds by making incremental changes to the
current budget.
What is the primary reason for using incremental budgeting
- Correct Answer - 1. Easier than starting from scratch
,2. Most businesses change slowly each period, so making incremental
adjustments to budget items is appropriate.
What is the most common way of preparing and incremental budget
- Correct Answer - Take last period's budget and the either x each by a
small % increase or decrease, or +/- an absolute $ amount for each line
item.
What is a major disadvantage of incremental budget
- Correct Answer - An incremental budget assumes last period's budget
is appropriate for this coming period and that nothing has fundamentally
changed-which is not always the case if the company is growing rapidly
or companies that are dramatically changing industries or products-this
could result in a budget that is neither relevant or reliable.
Operations budget
- Correct Answer - Is used to manage spending and resources related
to the operations of a company.
Other uses for operations budget
- Correct Answer - Motivate & reward key employees, set company
goals, influence hiring decisions, and identify changes that must be
made to operations.
,What time period are operation budgets prepared for?
- Correct Answer - Monthly, quarterly, or annually
Sales budget - Correct Answer - An estimate of expected sales revenue
for the budget period
What are some external variables that influence the sales budget?
- Correct Answer - customer taste, economic conditions, and
competitor actions
What are some internal variables that influence the sales budget?
- Correct Answer - Price, quality of products, sales effort, and
advertising expenditures
Cost Budget - Correct Answer - Estimates a company's expected
expenses for a coming period.- these are completed after the sales
estimates are determined.
Examples of what is included in the cost budget
- Correct Answer - production budgets for companies producing their
own products, inventory purchase budges for those buying good from
other companies. It cans also be admin expenses, sales and marketing,
technological expenses- they all affect the overall profitability of a
company.
, Cash Budget - Correct Answer - A budget that estimates cash inflows
and outflows during a particular period like a month or a quarter
What is the cash budget used for? - Correct Answer - Determine if
external financing will be needed, or if excess cash will be available,
what they might do with it-increasing purchases of equipment or paying
down debt.
What is the first budget that a company usually starts the budgeting
process with? - Correct Answer - Sales budget
Examples of what can affect the sales budget - Correct Answer - New
competitor in the area or a New development that will bring in more foot
traffic, like a mall.
What budgets fall under cost budgets - Correct Answer - Labor,
food/product costs, administrative, space needed to serve customers,
price to charge for meals/product, change or add product and
advertisement
Labor Budget - Correct Answer - How many employees are needed/
how much money is needed to pay them
