Flexible Budgets Imply

question 13

Multiple Choice

Flexible budgets imply

• A)that sales managers can have a wide latitude in modifying prices during the year.
• B)that a firm will have different levels of activity and costs during a year.
• C)the budget process may not be accurate at the beginning of the budget year.
• D)each manager is free to change the budget as the year progresses.

---

Definitions:

Company

An legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Restrictive Covenants

Restrictive covenants are clauses in contracts that impose restrictions on actions that parties to the contract can take, often used in employment agreements and real estate transactions to protect business interests.

Bond Rating

An assessment of the credit quality of a bond, generally given by a rating agency.

Specific Assets

Assets that are designated for a particular use or are unique to a business's operation.