Incremental Budgeting Allocates Increased or Decreased Funds to a Department

question 62

True/False

Incremental budgeting allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed.

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Definitions:

Commodity Exposure

The extent to which a company's future earnings, assets, or liabilities are affected by fluctuations in commodity prices.

Coffee Shop

A retail establishment that sells coffee, tea, and sometimes light meals or snacks.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Transaction Exposure

The risk of adverse changes in exchange rates affecting the value of a company's transactions in foreign currencies.