Treasury Management MCQs 2026

Master budget includes

1. A only petty cash log ✓
2. B only CEO biography ✓
3. C only warehouse map ✓
4. D operating budgets and financial budgets together ✓

Flexible budget adjusts

1. A budgeted costs for actual activity level ✓
2. B ignores actual volume completely ✓
3. C fixes costs regardless of output ✓
4. D replaces sales forecast with zero ✓

Sales budget is typically

1. A prepared after cash budget only always ✓
2. B unrelated to production ✓
3. C identical to audited financials ✓
4. D the starting point for operational budgeting ✓

Zero-based budgeting requires

1. A justifying all expenses from zero base each period ✓
2. B rolling last year budget automatically ✓
3. C eliminating all capital spending legally ✓
4. D ignoring strategic goals ✓

Cash budget helps management

1. A set stock exchange prices ✓
2. B forecast cash surpluses and deficits ✓
3. C determine cricket schedules ✓
4. D replace income tax law ✓

Variance analysis compares

1. A only competitor logos ✓
2. B actual results to budget or standard ✓
3. C only employee ages ✓
4. D only dividend history ✓

Top-down budgeting is driven by

1. A only shop floor without oversight ✓
2. B random number generation ✓
3. C senior management targets cascaded downward ✓
4. D external auditors exclusively ✓

Rolling forecast updates

1. A budget once every decade only ✓
2. B projections continuously over a moving time horizon ✓
3. C eliminates all planning ✓
4. D replaces accounting ledgers ✓

Budget variance 1: budgeted Rs 800,000, actual Rs 656,000. Variance is approximately

1. A 43% favorable ✓
2. B 0% by definition ✓
3. C 22% favorable ✓
4. D -18% favorable for costs ✓

Budget variance 2: budgeted Rs 905,000, actual Rs 764,725. Variance is approximately

1. A 40% favorable ✓
2. B -15% favorable for costs ✓
3. C 0% by definition ✓
4. D 25% favorable ✓

Budget variance 3: budgeted Rs 1,010,000, actual Rs 878,700. Variance is approximately

1. A 38% favorable ✓
2. B 0% by definition ✓
3. C -13% favorable for costs ✓
4. D 27% favorable ✓

Budget variance 4: budgeted Rs 1,115,000, actual Rs 997,925. Variance is approximately

1. A 35% favorable ✓
2. B 0% by definition ✓
3. C -10% favorable for costs ✓
4. D 30% favorable ✓

Budget variance 5: budgeted Rs 1,220,000, actual Rs 1,122,400. Variance is approximately

1. A 33% favorable ✓
2. B -8% favorable for costs ✓
3. C 0% by definition ✓
4. D 32% favorable ✓

Budget variance 6: budgeted Rs 1,125,000, actual Rs 1,063,125. Variance is approximately

1. A 30% favorable ✓
2. B 0% by definition ✓
3. C -5% favorable for costs ✓
4. D 35% favorable ✓

Budget variance 7: budgeted Rs 1,230,000, actual Rs 1,193,100. Variance is approximately

1. A 28% favorable ✓
2. B -3% favorable for costs ✓
3. C 0% by definition ✓
4. D 37% favorable ✓

Budget variance 8: budgeted Rs 1,335,000, actual Rs 1,328,325. Variance is approximately

1. A 25% favorable ✓
2. B 0% by definition ✓
3. C 0% unfavorable for costs ✓
4. D 40% favorable ✓

Budget variance 9: budgeted Rs 1,440,000, actual Rs 1,468,800. Variance is approximately

1. A 27% favorable ✓
2. B 2% unfavorable for costs ✓
3. C 0% by definition ✓
4. D 42% favorable ✓

Budget variance 10: budgeted Rs 1,545,000, actual Rs 1,614,525. Variance is approximately

1. A 5% unfavorable for costs ✓
2. B 30% favorable ✓
3. C 0% by definition ✓
4. D 45% favorable ✓

Budget variance 11: budgeted Rs 1,450,000, actual Rs 1,551,500. Variance is approximately

1. A 32% favorable ✓
2. B 7% unfavorable for costs ✓
3. C 0% by definition ✓
4. D 47% favorable ✓

Budget variance 12: budgeted Rs 1,555,000, actual Rs 1,702,725. Variance is approximately

1. A 10% unfavorable for costs ✓
2. B 35% favorable ✓
3. C 0% by definition ✓
4. D 50% favorable ✓

Budget variance 13: budgeted Rs 1,660,000, actual Rs 1,361,200. Variance is approximately

1. A 43% favorable ✓
2. B 0% by definition ✓
3. C -18% favorable for costs ✓
4. D 22% favorable ✓

Budget variance 14: budgeted Rs 1,765,000, actual Rs 1,491,425. Variance is approximately

1. A -15% favorable for costs ✓
2. B 40% favorable ✓
3. C 0% by definition ✓
4. D 25% favorable ✓

Budget variance 15: budgeted Rs 1,870,000, actual Rs 1,626,900. Variance is approximately

1. A 38% favorable ✓
2. B 0% by definition ✓
3. C 27% favorable ✓
4. D -13% favorable for costs ✓

Budget variance 16: budgeted Rs 1,775,000, actual Rs 1,588,625. Variance is approximately

1. A -10% favorable for costs ✓
2. B 35% favorable ✓
3. C 0% by definition ✓
4. D 30% favorable ✓

Budget variance 17: budgeted Rs 1,880,000, actual Rs 1,729,600. Variance is approximately

1. A 33% favorable ✓
2. B -8% favorable for costs ✓
3. C 0% by definition ✓
4. D 32% favorable ✓

Budget variance 18: budgeted Rs 1,985,000, actual Rs 1,875,825. Variance is approximately

1. A 30% favorable ✓
2. B 0% by definition ✓
3. C 35% favorable ✓
4. D -5% favorable for costs ✓

Budget variance 19: budgeted Rs 2,090,000, actual Rs 2,027,300. Variance is approximately

1. A 28% favorable ✓
2. B 0% by definition ✓
3. C -3% favorable for costs ✓
4. D 37% favorable ✓

Budget variance 47: budgeted Rs 3,830,000, actual Rs 4,098,100. Variance is approximately

1. A 32% favorable ✓
2. B 0% by definition ✓
3. C 47% favorable ✓
4. D 7% unfavorable for costs ✓

Budget variance 47: budgeted Rs 3,830,000, actual Rs 4,098,100. Variance is approximately

1. A 32% favorable ✓
2. B 0% by definition ✓
3. C 47% favorable ✓
4. D 7% unfavorable for costs ✓

Budget variance 46: budgeted Rs 3,725,000, actual Rs 3,892,625. Variance is approximately

1. A 30% favorable ✓
2. B 0% by definition ✓
3. C 5% unfavorable for costs ✓
4. D 45% favorable ✓

Budget variance 45: budgeted Rs 3,820,000, actual Rs 3,896,400. Variance is approximately

1. A 27% favorable ✓
2. B 0% by definition ✓
3. C 2% unfavorable for costs ✓
4. D 42% favorable ✓

Budget variance 44: budgeted Rs 3,715,000, actual Rs 3,696,425. Variance is approximately

1. A 0% unfavorable for costs ✓
2. B 25% favorable ✓
3. C 0% by definition ✓
4. D 40% favorable ✓

Budget variance 43: budgeted Rs 3,610,000, actual Rs 3,501,700. Variance is approximately

1. A 28% favorable ✓
2. B 0% by definition ✓
3. C 37% favorable ✓
4. D -3% favorable for costs ✓

Budget variance 42: budgeted Rs 3,505,000, actual Rs 3,312,225. Variance is approximately

1. A -5% favorable for costs ✓
2. B 30% favorable ✓
3. C 0% by definition ✓
4. D 35% favorable ✓

Budget variance 40: budgeted Rs 3,495,000, actual Rs 3,128,025. Variance is approximately

1. A -10% favorable for costs ✓
2. B 35% favorable ✓
3. C 0% by definition ✓
4. D 30% favorable ✓

Budget variance 41: budgeted Rs 3,400,000, actual Rs 3,128,000. Variance is approximately

1. A 33% favorable ✓
2. B 0% by definition ✓
3. C -8% favorable for costs ✓
4. D 32% favorable ✓

Budget variance 39: budgeted Rs 3,390,000, actual Rs 2,949,300. Variance is approximately

1. A 38% favorable ✓
2. B 0% by definition ✓
3. C 27% favorable ✓
4. D -13% favorable for costs ✓

Budget variance 38: budgeted Rs 3,285,000, actual Rs 2,775,825. Variance is approximately

1. A -15% favorable for costs ✓
2. B 40% favorable ✓
3. C 0% by definition ✓
4. D 25% favorable ✓

Budget variance 37: budgeted Rs 3,180,000, actual Rs 2,607,600. Variance is approximately

1. A -18% favorable for costs ✓
2. B 43% favorable ✓
3. C 0% by definition ✓
4. D 22% favorable ✓

Budget variance 36: budgeted Rs 3,075,000, actual Rs 3,367,125. Variance is approximately

1. A 35% favorable ✓
2. B 10% unfavorable for costs ✓
3. C 0% by definition ✓
4. D 50% favorable ✓

Budget variance 35: budgeted Rs 3,170,000, actual Rs 3,391,900. Variance is approximately

1. A 32% favorable ✓
2. B 7% unfavorable for costs ✓
3. C 0% by definition ✓
4. D 47% favorable ✓

Budget variance 34: budgeted Rs 3,065,000, actual Rs 3,202,925. Variance is approximately

1. A 30% favorable ✓
2. B 0% by definition ✓
3. C 45% favorable ✓
4. D 5% unfavorable for costs ✓

Treasury liquidity 20: cash balance Rs 3,955,000, average daily outflow Rs 329,500. Cash runway is approximately

1. A 72 months ✓
2. B 12 days ✓
3. C 0 days always ✓
4. D 329500 days ✓

Treasury liquidity 17: cash balance Rs 3,820,000, average daily outflow Rs 268,000. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 268000 days ✓

Treasury liquidity 18: cash balance Rs 4,025,000, average daily outflow Rs 288,500. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 288500 days ✓
4. D 14 days ✓

Treasury liquidity 19: cash balance Rs 3,750,000, average daily outflow Rs 309,000. Cash runway is approximately

1. A 12 days ✓
2. B 72 months ✓
3. C 0 days always ✓
4. D 309000 days ✓

Treasury liquidity 21: cash balance Rs 4,160,000, average daily outflow Rs 290,000. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 290000 days ✓
4. D 14 days ✓

Treasury liquidity 22: cash balance Rs 4,365,000, average daily outflow Rs 310,500. Cash runway is approximately

1. A 74 months ✓
2. B 14 days ✓
3. C 0 days always ✓
4. D 310500 days ✓

Treasury liquidity 23: cash balance Rs 4,570,000, average daily outflow Rs 331,000. Cash runway is approximately

1. A 74 months ✓
2. B 14 days ✓
3. C 0 days always ✓
4. D 331000 days ✓

Treasury liquidity 24: cash balance Rs 4,775,000, average daily outflow Rs 351,500. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 14 days ✓
4. D 351500 days ✓

Treasury liquidity 25: cash balance Rs 4,500,000, average daily outflow Rs 372,000. Cash runway is approximately

1. A 72 months ✓
2. B 12 days ✓
3. C 0 days always ✓
4. D 372000 days ✓

Treasury liquidity 26: cash balance Rs 4,705,000, average daily outflow Rs 332,500. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 332500 days ✓

Treasury liquidity 27: cash balance Rs 4,910,000, average daily outflow Rs 353,000. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 353000 days ✓

Treasury liquidity 28: cash balance Rs 5,115,000, average daily outflow Rs 373,500. Cash runway is approximately

1. A 74 months ✓
2. B 14 days ✓
3. C 0 days always ✓
4. D 373500 days ✓

Treasury liquidity 29: cash balance Rs 5,320,000, average daily outflow Rs 394,000. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 14 days ✓
4. D 394000 days ✓

Treasury liquidity 30: cash balance Rs 5,525,000, average daily outflow Rs 414,500. Cash runway is approximately

1. A 73 months ✓
2. B 13 days ✓
3. C 0 days always ✓
4. D 414500 days ✓

Treasury liquidity 31: cash balance Rs 5,250,000, average daily outflow Rs 375,000. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 375000 days ✓

Concentration banking system

1. A scatters cash randomly ✓
2. B eliminates all banking relationships ✓
3. C replaces tax compliance ✓
4. D funnels collections to central master account ✓

Working capital facility from bank supports

1. A permanent plant expansion only ✓
2. B foreign diplomatic missions ✓
3. C short-term operational funding needs ✓
4. D decades-long infrastructure bonds only ✓

Value at Risk (VaR) in treasury measures

1. A maximum expected loss over period at given confidence level ✓
2. B guaranteed profit level ✓
3. C exact stock price tomorrow ✓
4. D audit sample size ✓

Treasury liquidity 1: cash balance Rs 1,500,000, average daily outflow Rs 120,000. Cash runway is approximately

1. A 73 months ✓
2. B 0 days always ✓
3. C 13 days ✓
4. D 120000 days ✓

Treasury liquidity 2: cash balance Rs 1,705,000, average daily outflow Rs 140,500. Cash runway is approximately

1. A 72 months ✓
2. B 12 days ✓
3. C 0 days always ✓
4. D 140500 days ✓

Treasury liquidity 3: cash balance Rs 1,910,000, average daily outflow Rs 161,000. Cash runway is approximately

1. A 12 days ✓
2. B 72 months ✓
3. C 0 days always ✓
4. D 161000 days ✓

Treasury liquidity 4: cash balance Rs 2,115,000, average daily outflow Rs 181,500. Cash runway is approximately

1. A 72 months ✓
2. B 0 days always ✓
3. C 181500 days ✓
4. D 12 days ✓

Treasury liquidity 5: cash balance Rs 2,320,000, average daily outflow Rs 202,000. Cash runway is approximately

1. A 71 months ✓
2. B 11 days ✓
3. C 0 days always ✓
4. D 202000 days ✓

Treasury liquidity 6: cash balance Rs 2,525,000, average daily outflow Rs 162,500. Cash runway is approximately

1. A 76 months ✓
2. B 0 days always ✓
3. C 162500 days ✓
4. D 16 days ✓

Treasury liquidity 7: cash balance Rs 2,250,000, average daily outflow Rs 183,000. Cash runway is approximately

1. A 72 months ✓
2. B 0 days always ✓
3. C 12 days ✓
4. D 183000 days ✓

Treasury liquidity 8: cash balance Rs 2,455,000, average daily outflow Rs 203,500. Cash runway is approximately

1. A 72 months ✓
2. B 12 days ✓
3. C 0 days always ✓
4. D 203500 days ✓

Treasury liquidity 9: cash balance Rs 2,660,000, average daily outflow Rs 224,000. Cash runway is approximately

1. A 72 months ✓
2. B 0 days always ✓
3. C 12 days ✓
4. D 224000 days ✓

Treasury liquidity 10: cash balance Rs 2,865,000, average daily outflow Rs 244,500. Cash runway is approximately

1. A 72 months ✓
2. B 12 days ✓
3. C 0 days always ✓
4. D 244500 days ✓

Treasury liquidity 11: cash balance Rs 3,070,000, average daily outflow Rs 205,000. Cash runway is approximately

1. A 75 months ✓
2. B 0 days always ✓
3. C 205000 days ✓
4. D 15 days ✓

Treasury liquidity 12: cash balance Rs 3,275,000, average daily outflow Rs 225,500. Cash runway is approximately

1. A 75 months ✓
2. B 0 days always ✓
3. C 15 days ✓
4. D 225500 days ✓

Treasury liquidity 13: cash balance Rs 3,000,000, average daily outflow Rs 246,000. Cash runway is approximately

1. A 72 months ✓
2. B 0 days always ✓
3. C 246000 days ✓
4. D 12 days ✓

Treasury liquidity 14: cash balance Rs 3,205,000, average daily outflow Rs 266,500. Cash runway is approximately

1. A 72 months ✓
2. B 0 days always ✓
3. C 12 days ✓
4. D 266500 days ✓

Treasury liquidity 15: cash balance Rs 3,410,000, average daily outflow Rs 287,000. Cash runway is approximately

1. A 72 months ✓
2. B 0 days always ✓
3. C 287000 days ✓
4. D 12 days ✓

Treasury liquidity 16: cash balance Rs 3,615,000, average daily outflow Rs 247,500. Cash runway is approximately

1. A 15 days ✓
2. B 75 months ✓
3. C 0 days always ✓
4. D 247500 days ✓

Treasury liquidity 39: cash balance Rs 6,410,000, average daily outflow Rs 479,000. Cash runway is approximately

1. A 73 months ✓
2. B 0 days always ✓
3. C 479000 days ✓
4. D 13 days ✓

Treasury liquidity 38: cash balance Rs 6,205,000, average daily outflow Rs 458,500. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 458500 days ✓

Treasury liquidity 37: cash balance Rs 6,000,000, average daily outflow Rs 438,000. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 438000 days ✓

Treasury liquidity 36: cash balance Rs 6,275,000, average daily outflow Rs 417,500. Cash runway is approximately

1. A 75 months ✓
2. B 15 days ✓
3. C 0 days always ✓
4. D 417500 days ✓

Treasury liquidity 35: cash balance Rs 6,070,000, average daily outflow Rs 457,000. Cash runway is approximately

1. A 73 months ✓
2. B 0 days always ✓
3. C 457000 days ✓
4. D 13 days ✓

Treasury liquidity 34: cash balance Rs 5,865,000, average daily outflow Rs 436,500. Cash runway is approximately

1. A 13 days ✓
2. B 73 months ✓
3. C 0 days always ✓
4. D 436500 days ✓

Treasury liquidity 33: cash balance Rs 5,660,000, average daily outflow Rs 416,000. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 14 days ✓
4. D 416000 days ✓

Treasury liquidity 32: cash balance Rs 5,455,000, average daily outflow Rs 395,500. Cash runway is approximately

1. A 14 days ✓
2. B 74 months ✓
3. C 0 days always ✓
4. D 395500 days ✓

Treasury liquidity 47: cash balance Rs 7,570,000, average daily outflow Rs 523,000. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 523000 days ✓
4. D 14 days ✓

Treasury liquidity 48: cash balance Rs 7,775,000, average daily outflow Rs 543,500. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 14 days ✓
4. D 543500 days ✓

Treasury liquidity 40: cash balance Rs 6,615,000, average daily outflow Rs 499,500. Cash runway is approximately

1. A 13 days ✓
2. B 73 months ✓
3. C 0 days always ✓
4. D 499500 days ✓

Treasury liquidity 49: cash balance Rs 7,500,000, average daily outflow Rs 564,000. Cash runway is approximately

1. A 13 days ✓
2. B 73 months ✓
3. C 0 days always ✓
4. D 564000 days ✓

Treasury liquidity 50: cash balance Rs 7,705,000, average daily outflow Rs 584,500. Cash runway is approximately

1. A 73 months ✓
2. B 0 days always ✓
3. C 584500 days ✓
4. D 13 days ✓

Treasury liquidity 51: cash balance Rs 7,910,000, average daily outflow Rs 545,000. Cash runway is approximately

1. A 75 months ✓
2. B 0 days always ✓
3. C 15 days ✓
4. D 545000 days ✓

Treasury liquidity 52: cash balance Rs 8,115,000, average daily outflow Rs 565,500. Cash runway is approximately

1. A 74 months ✓
2. B 0 days always ✓
3. C 565500 days ✓
4. D 14 days ✓

Treasury liquidity 46: cash balance Rs 7,365,000, average daily outflow Rs 502,500. Cash runway is approximately

1. A 75 months ✓
2. B 15 days ✓
3. C 0 days always ✓
4. D 502500 days ✓

Treasury liquidity 45: cash balance Rs 7,160,000, average daily outflow Rs 542,000. Cash runway is approximately

1. A 73 months ✓
2. B 0 days always ✓
3. C 13 days ✓
4. D 542000 days ✓

Treasury liquidity 44: cash balance Rs 6,955,000, average daily outflow Rs 521,500. Cash runway is approximately

1. A 73 months ✓
2. B 13 days ✓
3. C 0 days always ✓
4. D 521500 days ✓

Treasury liquidity 43: cash balance Rs 6,750,000, average daily outflow Rs 501,000. Cash runway is approximately

1. A 73 months ✓
2. B 0 days always ✓
3. C 501000 days ✓
4. D 13 days ✓

Treasury liquidity 42: cash balance Rs 7,025,000, average daily outflow Rs 480,500. Cash runway is approximately

1. A 75 months ✓
2. B 0 days always ✓
3. C 15 days ✓
4. D 480500 days ✓

Treasury liquidity 41: cash balance Rs 6,820,000, average daily outflow Rs 460,000. Cash runway is approximately

1. A 75 months ✓
2. B 0 days always ✓
3. C 15 days ✓
4. D 460000 days ✓

Treasury management primary objective is

1. A maximizing factory output only ✓
2. B optimizing liquidity and financial risk of the organization ✓
3. C designing product labels ✓
4. D hiring seasonal interns only ✓

Cash pooling among subsidiaries

1. A prohibits all intercompany transfers ✓
2. B eliminates need for bank accounts ✓
3. C centralizes cash balances for efficient use ✓
4. D replaces audited financials ✓

Liquidity ratio in treasury monitors

1. A only long-term bond duration ✓
2. B ability to meet short-term obligations ✓
3. C only patent count ✓
4. D only marketing impressions ✓

Hedging interest rate exposure may use

1. A interest rate swaps or forward rate agreements ✓
2. B only equity IPO ✓
3. C only warehouse layout change ✓
4. D only dividend bonus shares ✓

Float in cash management is

1. A total fixed assets ✓
2. B annual depreciation charge ✓
3. C market beta coefficient ✓
4. D time delay between payment initiation and availability of funds ✓