What Can You Do If Your Budget Shows an Annual

question 162

Multiple Choice

What can you do if your budget shows an annual budget deficit?

• A) Liquidate enough savings and investments to meet the total budget shortfall for the year.
• B) Borrow enough to meet the total budget shortfall for the year.
• C) Cut low-priority expenses from the budget.
• D) Increase Income.
• E) All of the above.

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Definitions:

FIFO

An accounting method for asset management and valuation where the first items acquired are the first ones sold or used.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Fixed Asset Turnover Ratio

A financial metric that measures a company's efficiency in generating sales from its fixed assets, calculated by dividing net sales by the average net fixed assets.

Financial Statements

Records that provide an overview of a company's financial condition in both short and long term, including the balance sheet, income statement, and cash flow statement.