Using a Flexible Budget Is Necessary To

question 62

Multiple Choice

Using a flexible budget is necessary to:

• A)permit a more accurate determination of variances.
• B)revise budget goals at the beginning of a period.
• C)adjust budgeted results so they are closer to actual amounts.
• D)eliminate the effect of cost behavior patterns on budgeted amounts.

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Definitions:

Semiannual Payments

Payments made twice a year as part of a financial agreement, often seen in the context of bonds or loans.

Interest Rate

The percentage of the principal amount charged by a lender to a borrower for the use of assets, usually expressed as an annual rate.

Down Payment

An initial, upfront payment made for the purchase of an asset, with the balance of the price to be paid later.

Present Value

The valuation today of an incoming stream of cash or one-time future payment, after accounting for a specified rate of return.