Which of the following statements apply to the continuous budget methodology? I. The current financial forecast reflects the most recent monthly results and any material changes to the company’s outlook or economy.
Question
Which of the following statements apply to the continuous budget
methodology?
I. The current financial forecast reflects the most recent monthly results and any material changes to the company’s outlook or economy.
II. Forecasts are updated every few months, reassessing the company’s outlook several times a year.
III. The decision-making process to develop the budget takes place during the fourth quarter of the prior year being budgeted.
A. I and II only.
B. I and III only.
C. II and III only.
D. I, II, and III.
A company needs to expand its warehouse capacity and is concerned about how this project will impact the financial outlook. The company will hire a contractor to perform the work. Because the company’s margins are small and cash is always tight, the company will need to use a bank loan to finance the project. The budget for this project, which is expected to take 6 months, should include the contractor’s bid price plus which of the following?
I. Interest expense on the bank loan.
II. Incremental insurance expense
III. Incremental property tax expense.
A. I only.
B. II only.
C. II and III only.
D. I, II, and III.
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