One Characteristic of Incremental Budgeting Is That It

question 11

Multiple Choice

One characteristic of incremental budgeting is that it

• A) allows comparison using various units, like labor hours and dollars.
• B) is flexible toward changing environmental demands.
• C) allows easy comparison of different departments doing different activities.
• D) locks managers into stable spending arrangements.
• E) requires more time from managers than zero-based budgeting.

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Definitions:

GAAP Accounting

A set of accounting standards and principles designed to ensure consistency, fairness, and accuracy in financial reporting.

Derivatives

Financial instruments whose value is derived from the value of an underlying asset, index, or security.

Earnings Volatility

The degree to which a company's earnings fluctuate over time, indicating the variability or risk in its operational performance.

Futures Contract

A legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.