Accounting Multiple Choice Question – 23 January 2025

‘Effectiveness’, ‘economy’ and ‘efficiency’ are often cited with reference to resource use.

Match these terms with the definitions below:

1 – A reduction or containment of costs
2 – Achieving maximum output at minimum cost
3 – The measure of achievement by reference to objectives

Select ONE answer:

1. 1 = effectiveness 2 = economy 3 = efficiency
2. 1 = economy 2 = efficiency 3 = effectiveness
3. 1 = efficiency 2 = effectiveness 3 = economy
4. 1 = economy 2 = effectiveness. 3 = efficiency

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Effectiveness is the measure of achievement and the extent to which objectives have been attained (3). Efficiency is the relationship between outputs and the resources used to produce those outputs. An efficient operation produces the maximum output for any given set of resource inputs (2); or it has minimum inputs for any given quantity and quality of output. Economy means obtaining the appropriate quantity and quality of inputs at the lowest cost (1). An activity would not be economic, if, for example, there was over-staffing or failure to purchase materials of requisite quality at the lowest available price.
3. Not correct
4. Not correct

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