When evaluating actual results at the end of an accounting period, the static budget provides an appropriate benchmark for actual operations.

Question

Quizplus · Accepted Answer

A static budget does not adjust for changes in activity levels or other factors that occur during the period, making it less suitable for evaluating actual results that may have been influenced by these changes. A flexible budget, which adjusts to actual levels of activity, provides a more appropriate benchmark for evaluating actual operations.

When Evaluating Actual Results at the End of an Accounting