You Know the _____ Method of Budgeting Is Being Employed

question 72

Multiple Choice

You know the _____ method of budgeting is being employed after hearing an experienced marketing department manager respond to a new employee's question,"How was the ad budget established last year?" by saying,"The same way it's always been done.I just have an instinct for how much should be budgeted where."

• A)arbitrary allocation
• B)percentage of sales
• C)ROI
• D)return on investment
• E)competitive parity

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Definitions:

Accrued Interest Expense

Interest expense that has been incurred but not yet paid during an accounting period.

Installment Note

A debt instrument that requires a series of payments over time until the total debt is paid off.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a predetermined price.

Bondholder's Risk

The risk faced by bond investors that the issuer may fail to make payments when due or violate terms of the bond agreement.