A Variant of Fiscal-Year Budgeting Whereby a Twelve-Month Projection into the Future

question 150

Multiple Choice

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:

• A) flexible budgeting
• B) continuous budgeting
• C) zero-based budgeting
• D) master budgeting

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Definitions:

Profit Margin

A financial ratio calculated as net income divided by revenue, indicating the percentage of revenue that is retained as profit after accounting for costs and expenses.

Asset Turnover

A metric indicating how effectively a company utilizes its assets to produce sales income.

Financial Ratio

A numerical comparison derived from a company's financial statements, used to evaluate aspects of its operational efficiency, liquidity, profitability, and solvency.

Nonrecurring Items

Expenses or incomes that appear infrequently or irregularly on the financial statements, not expected to recur in the foreseeable future.