Which of the Following Is True of Budgets

question 8

Multiple Choice

Which of the following is true of budgets?

• A)Budgets are detailed forward looking financial reports based on expected income and expenses.
• B)Budgets describe a person's financial position at a given point in time.
• C)Budgets measure a person's financial performance at a given point in time.
• D)Budgets describe a person's financial goals over a specific period of time.
• E)Budgets are historical documents that tell an individual how he or she has performed in the past.

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Definitions:

Depreciation Expense

An accounting method allocating the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Expected Useful Life

The estimated length of time a fixed asset will be used in normal operations.

Placed in Service

Refers to the point in time when an asset begins to be used by a business for its intended purpose, marking the start of depreciation.

Asset

Items of value owned by a company, including tangible and intangible resources, that can be converted into cash.