Which of the Following Is a Disadvantage of Using the Standards

question 4

Multiple Choice

Which of the following is a disadvantage of using the standards developed by a firm itself to develop a budget?

• A) A firm's inefficiencies will be part of the data.
• B) They are not based on realized benchmarks and can be unrealistic
• C) The expected future changes are not included in the standards.
• D) The flexible-budget amounts are difficult to determine.

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Definitions:

Statement of Financial Position

A financial document showing a company's assets, liabilities, and equity at a specific point in time, also known as a balance sheet.

Statement of Comprehensive Income

A financial statement that includes all changes in equity during a period except for those resulting from investments by and distributions to shareholders.

Sales Forecast

An estimation of the sales a company expects to achieve in a future period.

Financial Plans

Strategies developed to achieve financial goals, including savings, investments, and managing expenses and income.