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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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A moving, 12-month budget that is updated monthly is

  1. a. not used by manufacturing firms.
  2. b. a waste of time and effort.
  3. c. a master budget.
  4. d. a continuous budget.
  5. e. always used by firms that prepare a master budget.

To determine

Identify the option which describes, a moving twelve month budget that is updated monthly.

Explanation

Continuous Budget:

A continuous budget is a budgeting technique in which a budget of twelve months is constantly maintained. In this budget, after the expiry of first month, budget is updated by removing the expired month and adding the budget for the preceding thirteenth month.

d.

A moving twelve month budget that is updated monthly and requires constant preparation and planning by the management is known as continuous budget. Therefore, this is the correct option.

a.

Continuous budget can be used by both the manufacturing or non-manufacturing firms...

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