alleryStart learning →What is a budget?
AA record of transactions already completed
BA summary of last year actual results
CA schedule of unpaid customer invoices
DA written statement of a future action plan
Answer & Solution
Correct answer: D. A written statement of a future action plan
1. A budget is a quantitative, written statement of a company action plan for a future period.
2. Budgets are planning tools used to set future activities and keep financial control of operations.
3. Records of completed transactions and summaries of last year are historical reports, not plans.
4. So a budget is the written statement of what the company intends to do next.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 7.1 Introduction_
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