Question

What is one difference between yearly and monthly budgets?
a.
Yearly budgets show a greater degree of planning, so it is appropriate to plan expenses more strictly and in a more detailed fashion in a yearly budget.
b.
Monthly budgets should focus on the short term, so it is not appropriate to consider planned but future expenses (such as a vacation) in a monthly budget.
c.
Yearly budgets are a better view of your financial goals, so you should work very hard to avoid changing yearly budgets.
d.
There is more uncertainty as you plan further ahead, so a yearly budget needs more room to account for unplanned expenses than a monthly budget does.


Please select the best answer from the choices provided

A
B
C
D

Answer 1

D

A yearly budget covers a longer time horizon, so there is greater uncertainty and it needs more built‑in room (contingency) for unplanned changes than a monthly budget.