Neco 2018 Financial Accounting Question 44

Practice objective / multiple choice question 44 from the 2018 Neco Financial Accounting examination.

Neco 2018 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 44 NECO • 2018 • FINANCIAL_ACCOUNTING • objective

A government department prepared the following budget for the year (amounts in ₦):\n\nRevenue - Tax: 5,000,000; Grants: 2,000,000\nExpenditure - Salaries: 3,500,000; Office Supplies: 200,000; Capital Projects: 1,200,000; Miscellaneous: 150,000\n\nAt year‑end the actual figures were:\n\nRevenue - Tax: 4,800,000; Grants: 2,200,000\nExpenditure - Salaries: 3,600,000; Office Supplies: 180,000; Capital Projects: 1,300,000; Miscellaneous: 130,000\n\nCalculate (a) the overall budget variance for total revenue, (b) the overall budget variance for total expenditure, and (c) the actual net surplus (or deficit) and state how it compares with the budgeted surplus.

Answer Options

A. Revenue variance: 0; Expenditure variance: 140,000 (unfavourable); Net surplus: 1,810,000 (budgeted 1,950,000, 140,000 less)
Correct Answer B. Revenue variance: 0; Expenditure variance: 160,000 (unfavourable); Net surplus: 1,790,000 (budgeted 1,950,000, 160,000 less)
C. Revenue variance: 200,000 (favourable); Expenditure variance: 160,000 (unfavourable); Net surplus: 1,990,000 (budgeted 1,950,000, 40,000 more)
D. Revenue variance: 0; Expenditure variance: 160,000 (favourable); Net surplus: 2,110,000 (budgeted 1,950,000, 160,000 more)
Correct Answer
B
Correct Option:
Revenue variance: 0; Expenditure variance: 160,000 (unfavourable); Net surplus: 1,790,000 (budgeted 1,950,000, 160,000 less)

About This Question

This is Neco 2018 Financial Accounting Question 44. It is one of the objective questions from the 2018 Neco Financial Accounting examination.

Difficulty level: Hard .

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