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:

FIFO Method

"First In, First Out," an inventory valuation method where the oldest inventory items are recorded as sold first.

Cost Control

Measures implemented by a company to maintain cost efficiency and budget adherence during its operations.

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all items available for sale during the period.

FIFO Method

First-In, First-Out, an inventory valuation method where the costs of the earliest goods purchased are the first to be recognized in determining cost of goods sold.