A budget that is based on the actual activity of a period is known as a:
A) continuous budget.
B) flexible budget.
C) static budget.
D) master budget.

Question

Quizplus · Accepted Answer

A flexible budget adjusts for changes in activity levels, while a static budget remains fixed regardless of changes in activity levels. A continuous budget is one that is constantly updated throughout the year, and a master budget includes all of the organization's budgets and financial plans. A budget based on actual activity levels is best referred to as a flexible budget.

A Budget That Is Based on the Actual Activity of a Period