Which of the following is a recommended technique for preparing a sensible budget?
a. Budget liberally for income, and conservatively for expenses.
b. Budget conservatively for income and liberally for expenses.
c. Do not allow for wiggle room.
d. Go light in terms of basing budgets on historical information.
Ans: b. Budget conservatively for income and liberally for expenses.
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The level of sales revenue or volume which is required in order for the organization to cover all of its costs is called the ________.
A. equilibrium volume B. balanced quantity C. contribution margin D. break-even point E. full contribution point
On Friday, Josie receives her paycheck and goes directly to the bank after work to make a deposit into her savings account. The bank keeps the required reserve and then loans out the remaining balance to a qualified borrower named Juan as a portion of his small business loan. Juan uses the loan to buy a new copy machine for his printing business and makes small monthly payments to the bank to payback the principal balance plus interest on the loan. The bank profits from a portion of the interest payment received and also passes some of the interest back to Josie in the form of an interest payment to her savings account. In this example, the bank is acting: