The Difference Between a Budget and a Standard Is That

question 210

Multiple Choice

The difference between a budget and a standard is that

• A) a budget expresses what costs were while a standard expresses what costs should be.
• B) a budget expresses management's plans while a standard reflects what actually happened.
• C) a budget expresses a total amount while a standard expresses a unit amount.
• D) standards are excluded from the cost accounting system whereas budgets are generally incorporated into the cost accounting system.

Assess short-term and long-term credit risk and profitability ratios between companies.

Calculate sales trend percentages and understand their implications.

Understand the building blocks and general-purpose of financial statements.

Apply ratio analysis to assess a company's profitability, efficiency, liquidity, and solvency.

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Definitions:

Self-Correcting Mechanism

A process through which a system naturally adjusts and corrects its course without external intervention, aiming to maintain equilibrium or improve function.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1.

Grapevine

An informal communication network within an organization, characterized by personal conversations and exchanges of information beyond official channels.

Email

A method of exchanging messages and information electronically over a computer network.