Which of the Following Is the Most Logical Budget-Setting Method

question 47

Multiple Choice

Which of the following is the most logical budget-setting method?

• A) percentage-of-sales method
• B) affordable method
• C) competitive-parity method
• D) objective-and-task method
• E) push method

---

Definitions:

Gain or Loss

The financial result that occurs when the selling price of an asset differs from its carrying amount on the books.

Equity Method

An accounting technique used to record investments in associate companies, recognizing the investor's share of the investee's profits or losses.

Investee's Net Income

The portion of profit or income earned by a company in which another company has invested.

Periodic Net Income

The net income calculated at specific intervals, such as monthly or quarterly, reflecting the profitability of a company during that time period.