Question

) Which of the following is a factor while choosing the period of a budget?*

A) the frequency of interim financial statements
B) the estimated period required to achieve budget targets
C) the general economic trend
D) the motive for creating the budget

Answer 1

The factor that should be considered while choosing the period of a budget is the estimated period required to achieve budget targets. The correct answer is B.

Step-by-step explanation:

The factor that should be considered while choosing the period of a budget is the estimated period required to achieve budget targets.

This is because the period of a budget should align with the time frame in which the budget targets are expected to be achieved.

For example, if a company sets annual budget targets, then it would make sense to have an annual budget period.

Similarly, if the budget targets are for a shorter time frame, such as quarterly targets, then a shorter budget period would be appropriate. The correct answer is B.