Which of the Following Is True of a Budget

question 114

Multiple Choice

Which of the following is true of a budget?

• A) Budgets are used to express only the operational plans and not the strategic plans of a company.
• B) Budgets do not account for nonfinancial aspects of the upcoming period.
• C) Budgets are most useful when they are planned independent of the company's strategic plans.
• D) Budgets help managers to revise their plans and strategies.

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Definitions:

Sales

The process where goods or services are traded for money, which constitutes the main revenue stream for the majority of companies.

Operating Cycle

The period it takes for a business to buy inventory, sell it to customers, and collect the cash from these sales.

Credit Sales

Revenues earned by selling goods or services that are paid for over time under agreed payment terms, rather than paid in full upfront.

COGS

Acronym for Cost of Goods Sold, which refers to the direct costs attributable to the production of the goods sold by a company.