A Budget System Based on Expected Activities and Their Levels

question 166

Multiple Choice

A budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities is:

• A) Traditional budgeting.
• B) Management budgeting.
• C) Master budgeting.
• D) Activity-based budgeting.
• E) Cash budgeting.

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Definitions:

Assets and Liabilities

Essential components of a financial statement, with assets representing what a company owns and liabilities what it owes.

Reversing Entry

An accounting technique that negates the impact of the previous entry, often used to simplify bookkeeping for accruals and deferrals.

Depreciation

The process of allocating the cost of a tangible asset over its useful life to account for the loss of value over time.

Accrual

The accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.