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      Question

      A budget that is continuously updated by adding a new

      accounting period when one is completed is called a:
      A Flexible Budget Correct Answer Incorrect Answer
      B Cash Budget Correct Answer Incorrect Answer
      C Rolling Budget Correct Answer Incorrect Answer
      D Zero-Based Budget Correct Answer Incorrect Answer
      E Master Budget Correct Answer Incorrect Answer

      Solution

      o A Rolling Budget is continuously updated by adding a new budget period (e.g., a month or a quarter) as the current one expires, maintaining a constant planning horizon. o A Flexible Budget (A) changes with the level of activity. o A Cash Budget (B) forecasts cash inflows and outflows. o A Zero-Based Budget (D) requires justifying all expenses for each new period. o A Master Budget (E) is a comprehensive summary of all other budgets.

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