Budgets Are Said to Be Useful in Promoting Forward Thinking

question 46

Multiple Choice

Budgets are said to be useful in promoting forward thinking and identification of short-term problems, because:

• A)management can foresee future promotion opportunities.
• B)management can react to problem areas as they occur.
• C)potential problem areas can be identified early enough to allow management to explore ways of overcoming the problem.
• D)All of the above

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Definitions:

Periodic Inventory Method

An accounting method where the inventory is physically counted and valued at the end of a specific period to determine cost of goods sold and ending inventory.

Cost of Goods Sold

The total cost directly associated with producing or purchasing the goods sold by a business during a specific period, including materials and labor.

Selling Expense

Expenses directly related to the selling of products or services, such as advertising, sales commissions, and retail store expenses.

Inventory Shrinkage

The loss of products between purchase and sale, typically due to theft, damage, or errors in counting.