Rolling budgets are defined as

Rolling budgets are defined as

• A. Budget that is kept continuously up to date by adding another accounting period.
• B. Budget that is fixed for several years.
• C. Budget that is prepared only at year-end.
• D. A forecast based on last year's data.

Answer: (A)

Rolling budgets are budgets that stay current by continually extending the planning horizon as time moves forward—adding another accounting period once the current period ends. This keeps targets and projections up to date, incorporating actual results and revised forecasts for the future. For example, a 12-month rolling budget adds a new month or period each month, so the budget always covers the next 12 months. This approach is opposed to a fixed budget set for several years, which never adjusts in the short term; or a budget prepared only at year-end, which isn’t kept current; or a simple forecast based on last year's data, which isn’t an actively managed budget.

Rolling budgets are budgets that stay current by continually extending the planning horizon as time moves forward—adding another accounting period once the current period ends. This keeps targets and projections up to date, incorporating actual results and revised forecasts for the future. For example, a 12-month rolling budget adds a new month or period each month, so the budget always covers the next 12 months. This approach is opposed to a fixed budget set for several years, which never adjusts in the short term; or a budget prepared only at year-end, which isn’t kept current; or a simple forecast based on last year's data, which isn’t an actively managed budget.