A Continuous (Or Perpetual)budget

question 58

Multiple Choice

A continuous (or perpetual) budget:

• A)is prepared for a range of activity so that the budget can be adjusted for changes in activity.
• B)is a plan that is updated monthly or quarterly,dropping one period and adding another.
• C)is a strategic plan that does not change.
• D)is used in companies that experience no change in sales.

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Definitions:

Pension Fund

A type of investment pool typically set up by an employer to generate stable growth over the long term and provide pensions for employees when they reach the end of their working years.

Quarterly Payments

Quarterly payments are payments made four times a year, often used in the context of dividend distributions to shareholders or in loan repayments.

Compounded Quarterly

Interest calculation method where interest is added to the principal sum of a deposit or loan every quarter, leading to interest amounts that accumulate at a faster rate than annual compounding.

Compounded Monthly

The process where interest earned is added to the principal, so that from that moment on, the interest that has been added also earns interest.