The technique in which budget variables are altered and the effect of the changes on the income statement and the balance sheet are recorded is known as:
A) what if analysis.
B) variable analysis.
C) spreadsheet analysis.
D) profit analysis.

Question

Quizplus · Accepted Answer

The technique described is commonly known as "what-if analysis," in which various scenarios are tested by changing budget variables to see how they would impact the financial statements. Choice B (variable analysis) and D (profit analysis) could also potentially involve altering budget variables, but they are not specific enough to describe this particular technique. Choice C (spreadsheet analysis) is a general term that could refer to many different types of analyses performed using spreadsheets.

The Technique in Which Budget Variables Are Altered and the Effect