BM2 5.02 Budget Quiz #1

The most important reason for budgeting is to

• accomplish a financial goal.

• increase personal wealth.

The definition of a budget is 

• a method for evaluating a manager’s performance.

• an estimate of income and expense for a specific period.

Budgets can be described in terms of 

• money, maps, and management.

• savings, sales, and success.

In budgeting, utility bills, salaries, advertising, equipment purchases, taxes, and loans are examples of 

• financial goals.

• business expenses.

By regularly reviewing their budgets, businesses are able to determine if they are 

• following their financial plans.

• receiving discounts from vendors.

When a business owner or manager uses a budget, s/he

• makes more informed decisions.

• can more accurately evaluate employees.

What is the relationship between a business’s goals and its budget?

• Goals are established after the budget so that they are realistic.

• Budgets translate a company’s goals into actual means for accomplishing them.

What is the benefit of having written records of financial transactions?

• Information is accurate, accessible, and meaningful.

• Investments are increased, and profit is reinvested.

A budget helps a business evaluate long-term performance by

• comparing what is currently budgeted to what is actually being earned and spent.

• providing benchmarks of past performance.

The difference between a budgeted amount and an actual amount is called

• a variance

• a safety net