Which of the Following Best Describes a Method of Budgeting

question 99

Multiple Choice

Which of the following best describes a method of budgeting in which the cost of each program must be justified every year?

• A) Operational budgeting.
• B) Zero-based budgeting.
• C) Continuous budgeting.
• D) Responsibility accounting.

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Definitions:

Retained Earnings

The portion of a business's profits not distributed to shareholders as dividends but kept back in the company for reinvestment or to pay debt.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing leverage or equity financing.

External Financing

Funds a company raises from outside sources, like bank loans, issuing bonds, or equity financing from investors, to support its operations and growth.

Total Asset Turnover

A financial ratio that measures how efficiently a company utilizes its assets to generate sales.