A. This is a description of a static budget because the static budget is prepared for only one level of activity (a certain level of sales).

B. A flexible budget is prepared for the actual level of activity, so it is not constant throughout the year.

C. The capital budget is the budget in which all capital (property, plant and equipment) expenditures are planned. The capital budget is often prepared for several years in advance. The amounts in it that affect the current year's budget will be included in the current year's master budget; but the master budget is not also the capital budget.

D. In a zero-base budget the current year's budget is prepared without any reference to, or use of, the prior period's budget. Not all master budgets are zero-base budgets, and the fact that the master budget is used to make comparisons with actual results does not mean that it must be a zero-based budget.