What Error Do Many Individuals Make in Budgeting

question 74

Multiple Choice

What error do many individuals make in budgeting?

• A)Overestimate expenses and underestimate income
• B)Overestimate income and underestimate expenses
• C)Overestimate income and expenses
• D)Underestimate income and expenses

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, and salaries.

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.

Accrued Liabilities

Liabilities recorded on a company’s balance sheet for expenses that have been incurred but not yet paid.

Accounts Payable

Accounts payable is the balance of money owed to suppliers or creditors for goods or services purchased on credit, which is typically a short-term liability.