Budgeting is one of 9 topics in the Grade 11 Accounting CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. A cash budget projects:
The actual cash expected to flow into and out of the business, based on timing of cash movements
Income and expenses on the accrual basis, regardless of when cash moves
Only non-current asset purchases
Only the VAT payable to SARS
Answer: The actual cash expected to flow into and out of the business, based on timing of cash movements — A cash budget cares only about when cash physically moves, unlike a projected income statement, which uses the accrual basis.
Easy
2. A credit sale made in January but only collected from the debtor in March will appear in the cash budget:
In March, the month it is actually collected in cash
In January, the month the sale was made
Split evenly between January, February, and March
It never appears in a cash budget at all
Answer: In March, the month it is actually collected in cash — A cash budget records cash movements only when they actually happen, so a credit sale collected in March appears in the cash budget in March, not the month of the original sale.
Medium
3. A projected Statement of Comprehensive Income, unlike a cash budget, recognises income and expenses:
On the accrual basis, in the period they relate to, regardless of when cash moves
Only when cash is physically received or paid
Only for cash transactions, ignoring all credit transactions
Only once a year, at year end
Answer: On the accrual basis, in the period they relate to, regardless of when cash moves — The projected income statement follows the same accrual basis as the actual financial statements, recognising income/expenses when earned/incurred, not necessarily when cash moves.
