Question

A continuous (rolling) budget:_________.

A. Presents planned activities for a period but do not present a firm commitment.
B. Presents the plan for a range of activity so that the plan can be adjusted for changes in activity.
C. Presents the plan for only one level of activity and does not adjust to changes in the level of activity.
D. Drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed.

Answer 1

D. Drops the current month or quarter and adds a future month or quarter as the current month or quarter is completed.

Step-by-step explanation:

A. This is a forecast not a budget. Therefore, this option is incorrect.

B. This option is basically flexible budget while in a rolling budget there are more features as well. This option is also incorrect.

C. This is definition of a static budget. On the other hand a rolling budget can not be static. Hence, this option is also incorrect.

D. A rolling budget or also known as continuous budget is one where additional period is added after the end of the previous period (whether month, quarter or year). Hence, this option is correct.