The correct answer is: Both A and B.
A rolling budget is a budget that is updated continuously by adding a further period (a month/quarter) and deducting a corresponding earlier period. This means that the budget is always up-to-date and reflects the latest financial information.
A continuous budget is a budget that is never finalized. Instead, it is constantly being updated as new information becomes available. This allows businesses to be more agile and responsive to changes in the market.
Both rolling and continuous budgets have their own advantages and disadvantages. Rolling budgets are more time-consuming to prepare, but they provide a more accurate picture of the company’s financial situation. Continuous budgets are less time-consuming to prepare, but they may not be as accurate as rolling budgets.
The best type of budget for a company depends on its specific needs. Companies that need to be very accurate in their financial planning may prefer a rolling budget. Companies that need to be more flexible in their financial planning may prefer a continuous budget.
Here is a brief explanation of each option:
- A. Rolling budget is a budget that is updated continuously by adding a further period (a month/quarter) and deducting a corresponding earlier period. This means that the budget is always up-to-date and reflects the latest financial information.
- B. Continuous budget is a budget that is never finalized. Instead, it is constantly being updated as new information becomes available. This allows businesses to be more agile and responsive to changes in the market.
- C. Annual budget is a budget that is prepared for a one-year period. It is typically used by businesses to plan their financial activities for the coming year.
- D. Both A and B.