An Emergency Fund Is Required in Financial Planning to

question 90

Multiple Choice

An emergency fund is required in financial planning to

• A)maintain credit rating.
• B)maintain your standard of living.
• C)manage risk.
• D)maintain adequate liquidity.

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Definitions:

Budgets

Financial plans outlining expected revenues and expenditures for a specific period.

Activity Variances

Differences between planned activity costs and the actual costs incurred for those activities.

Cost Drivers

Factors that cause the cost of an activity or operation to increase or decrease, such as machine hours, labor hours, or the volume of production.

Flexible Budget

A budget that adjusts or flexes for changes in the volume of activity, providing a more useful comparison of actual to budgeted performance.