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Question 1

Which of the following is not a true statement:

Click the button next to the correct answer choice. After you have read the feedback, explore the other choices. Note: Your first selection will be used in tallying your score.

  • A budget is an action plan for allocating resources and expenditures.

  • Not the best choice. This actually is a true statement: a budget serves as an action plan for allocating resources and expenditures. It's also a planning tool, as well as a yardstick for measuring performance. The statement that is not true is: "A budget is a historical record of the company's financial results." While historical information may be used in developing a budget, the budget itself is forward-looking.

  • A budget is a historical record of a company's financial results.

  • The best choice

    Correct choice. A budget is not a historical document but rather a forward-looking action plan that guides managers' allocation of resources and expenditures based on their assumptions about the future.

  • A budget is a yardstick for measuring performance.

  • Not the best choice. This actually is a true statement: a budget is a yardstick for measuring performance. It also serves as a planning tool and as an action plan for allocating resources and expenditures.

    The statement that is not true is: "A budget is a historical record of the company's financial results." While historical information may be used in developing a budget, the budget itself is forward-looking.

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