A continuous (rolling) budget Answer a. presents the plan for a range of activit

Question

A continuous (rolling) budget
Answer
a. presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels. b. presents a statement of expectations for a period of time but does not present a firm commitment. c. presents the plan for only one level of activity and does not adjust to changes in the level of activity. d. drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed. e. classifies budget requests by activity and estimates the benefits arising from each activity.

Explanation / Answer

d. drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed. Reason A continuous budget is one that is revised on a regular (continuous) basis. Typically, a company extends such a budget for another month or quarter in accordance with new data as the current month or quarter ends. For example, if the budget is for 12 months, a budget for the next 12 months will be available continuously as each month ends.

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