One Characteristic of Incremental Budgeting Is That It

question 39

Multiple Choice

One characteristic of incremental budgeting is that it

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

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Definitions:

Net Cash

The amount of cash remaining after all operating, investing, and financing activities have been accounted for over a certain period.

Operating Activities

Business activities related to the day-to-day functions of a company, including production, sales, and administrative tasks.

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, essential for assessing the company's liquidity, flexibility, and overall financial performance.

Accounts Payable

The amount a company owes to suppliers for items or services purchased on credit.