ECONOMICS
BUDGETING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
budget is a financial plan
|
|
|
budget is a short term financial plan
|
|
|
budget is a long term financial plan
|
|
|
budget is a detailed plan that shows financial consequences of an organization operating activities.
|
Detailed explanation-1: -where you are today: While a budget helps you map out your key expenses and plan for the weeks and months to come, a financial plan allows you to set a course toward funding financial goals that are 5, 10, or 20 years down the road.
Detailed explanation-2: -Capital expenditure budget and research & development budget are long term budget as both are non operational activities.
Detailed explanation-3: -Long-term financial planning involves projecting revenues, expenses, and key factors that have a financial impact on the organization. Understanding long-term trends and potential risk factors that may impact overall financial sustainability allows the finance officer to proactively address these issues.
Detailed explanation-4: -Cash flow method of cash budget is suitable for preparing the long term estimates of cash inflows and outflows.