Continuous Budgeting Is the Practice of Preparing a New Budget

question 144

True/False

Continuous budgeting is the practice of preparing a new budget for a selected number of future periods and revising those budgets as each period is completed.

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Definitions:

Capital Expenditure

A financial outlay made by a company to acquire, maintain, or improve physical assets such as property, plants, and equipment.

Cash Budgeting

The process of estimating future cash inflows and outflows to determine a company's short-term financial health and liquidity.

Payback Period

The length of time required to recover the initial outlay on an investment based on its expected cash flows.

Annual Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business during a given fiscal year.