Question

Continuous budgeting is the practice of revising the entire set of budgets for the periods remaining and adding new budgets to replace those for the periods that have elapsed.

a) true
b) false

Answer 1

Answer: True

Step-by-step explanation:

Continuous Budgeting is a process by which a company prepares budgets for multiple time periods and then prepares a new one once one of the periods has elapsed as well as revising the budgets still to be used to ensure that they cater for the volatile business environment of today.

This ensures that the Business is more capable of dealing with the said volatility as well as making sure that the business caters for the same period of time i.e, if the budget was for 12 months and 1 month elapses, adding another month would keep it at 12 months.