Manage Finances - Element 1 Allocate Budget Resources

What is correct explanation for budgets ?

• One of the tools that assists owners and managers of a business to plan and monitor the flow of money

• A document that explains monetary terms displaying quantities

• Short term plan that help managers to monitor the performance of the business

• All of above

In general, budgets are prepared for...

• Six Months

• One year

• Five years

• Ten years

Managers find it useful to divide the business into segments or activity centres of two types. Those are..

• Cost Centres & Profit Centres

• Revenue Centres & Profit Centres

Select the correct definition of "Cash Budget"

• probable future cash position of the business based on cash coming into the business and flowing out from the business for the period

• gives expected cash sales and expenses for a period

• budget developed to cater for the needs of a given function, conference, seminar or event

• forecasts and tracks revenue from sales

What is the correct explanation of "purchasing budget"?

• developed to accommodate the needs of specific project such as an extension to the premises, refurbishment, updating of major technology and systems

• forecasts and tracks labour expenses

• concerns other estimated operating expenses, such as rent, rates and other direct costs except materials and labour

• addresses inventory required for a period in order to attain a nominated outcome or sales figure, such as buying the raw materials or products required to prepare a finished product

What item is not considered as a basic content of a budget ?

• Name or title of the budget

• Assets and Liabilities

• Period to which the budget applies

• Budget notes

Select the correct statement related to fixed and flexible budgets

• Fixed budget change with actual volume and output achieved whereas flexible budget is not

• The budget look at any variations that might occur in trade such as increases or decreases in revenue or levels of activity

• A flexible budget creates a number of different scenarios that could possibly arise in terms of revenue or other relevant levels of activity.

• Fixed budget comparisons are correct if the outputs are differs / Flexible budget comparisons are realistic

Choose the correct explanation of "Bank Deposit Documentation"

• Statements provided by the banks showing details of and transactions for individual accounts the business has with the bank

• Document supplied by the bank and gives information showing the position of all the accounts the business has with the bank on one document.

• template documents provided by the bank that businesses complete when they deposit cash and non-cash items into the bank

Select the tax that cannot be seen in BAS (Business Activity Statement)

• Goods and services tax (GST)

• Pay as you earn (PAYE)

• Pay As You Go (PAYG) instalments

• PAYG withholding tax

Select the wrong statement related to business cheques.

• Issued to a business by banks when the business establishes a cheque account

• Cheques are written to settle bills the business needs to pay

• The cheque books contain a number of pre-printed cheques identifying the name of the business, the bank name and a cheque number.

• Both personal and corporate/business cheques are valid for only six months.

• The name of the payee and the value of the cheque is also written on the cheque stub as a record of the payment