The Activity Index Used in Preparing the Flexible Budget

question 55

Multiple Choice

The activity index used in preparing the flexible budget

• A) is prescribed by generally accepted accounting principles.
• B) is only applicable to fixed manufacturing costs.
• C) is the same for all departments.
• D) should significantly influence the costs that are being budgeted.

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Definitions:

Cash Balance

The amount of cash in a company's account at any given time.

Deposit

Money placed into a financial institution for safekeeping or to earn interest.

Check Register

A record book or software where all checks written, deposits, and bank transactions are recorded.

Cash Balance

The total amount of money in cash form available in an account at any given time.