ECONOMIC LIFE Definition

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ECONOMIC LIFE is the time period over which an asset(s) may generate economic benefits.

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FLEXIBLE BUDGET is based upon different levels of activity. It is a very useful tool for comparing actual costs experienced to the cost allowable for the activity level achieved, i.e. it is dynamic in nature as compared to static. A series of budgets can be readily developed to fit any activity level. Flexible budgeting distinguishes between fixed and variable cost, thereby allowing for a budget that can be automatically adjusted to the level of activity actually attained.

NATURAL ACCOUNTS in the Chart of Accounts are user defined accounts for the activities associated with the accounting entity that capture data at the transaction level. Natural accounts exist for a range of Assets, Liabilities, Equity accounts, Revenues, and Expenses.

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