Flexible Budgets MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on March 25, 2022

Take this quick test on flexible budgets to help you prepare for your exams and interviews. The quiz will allow you to assess your knowledge and see how well you’ve understood the key topics and concepts.

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Frequently Asked Questions

What is a Flexible Budget?

A Flexible Budget estimates future costs and revenues that can be adjusted to reflect changes in the level of activity.

How do you create a Flexible Budget?

Flexible Budgets can help managers better understand how activity levels change impact costs and revenues. They can also help managers make better decisions about where to allocate resources.

How do you create a Flexible Budget?

How do you create a Flexible Budget?

Are there any drawbacks to using a Flexible Budget?

There are no significant drawbacks to using a Flexible Budget. However, it is essential to note that a Flexible Budget should not be used in place of sound Financial Planning. Instead, a Flexible Budget should be used as a tool to help managers respond to fluctuations inactivity but should not be relied upon to make decisions about the future organizational activity.

What are the types of Flexible Budgets?

There are two types of Flexible Budgets: static and rolling. With a static budget, the company sets a specific budget amount for each period, regardless of how much revenue or expenses actually vary from month to month. A rolling budget, on the other hand, adjusts automatically as actual revenue and expenses change from one month to the next. This type of budget is more responsive to actual business conditions, but it can be more difficult to track and manage.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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