Detailed Answer
Answer (A) is correct. A continuous, or rolling, budget (profit plan) is one that is revised on a regular or continuous basis. Typically, a company that uses continuous budgeting extends the budget for another month or quarter in accordance with new data as the current month or quarter ends. For example, if the budget is for 12 months, a budget for the next year will always be available at the end of each interim period. Continuous budgeting encourages a longer-term perspective regardless of how little time remains in the company’s current fiscal year.
