Budgeting and Forecasting Quiz

What is budgeting?

• A way to track expenses after they occur

• A method of saving money for future use

• A financial plan of how an organization achieves its financial goals

• A process of spending money without any plan

What are the benefits of budgeting?

• Promotes co-ordination and communication

• Encourages wasteful spending

• Leads to decreased morale and productivity

• Stifles innovation and fails to address evolving priorities

What are the categories of budgeting according to Goldblatt (2002)?

• Zero-based Budgeting, Rolling Budgeting, Activity based Budgeting

• Profit-oriented, Non-profit oriented, Break-even events

• Capital Budget, Operating Budget, Department Budget

• Profit-oriented, Break-even events, Return on Objectives (ROO)

What is a Profit & Loss (P&L) statement used for?

• To determine the market share of the business

• To show the total revenue and expenses of a business within a specific budget period

• To track the number of employees in the organization

• To calculate the taxes owed by the business

What are the key elements of a profit and loss statement?

• Revenue, Cost of Goods Sold, Gross Profit, Net Profit

• Cost of Goods Sold, Gross Profit, Net Profit, Tax

• Revenue, Gross Profit, Net Profit, Operating Expenses

• Gross Profit, Net Profit, Operating Expenses, Overhead expenses

What is a rolling budget also known as?

• Incremental budget

• Zero-based budgeting

• Activity based budgeting

• Master budget

What is the purpose of a cash budget?

• To prepare the budget for the entire organization for a one-year period

• To project the cash flow of the business

• To analyze the needs and costs of every function within an organization

• To estimate the cost of goods sold for the upcoming month

What is zero-based budgeting?

• A method of budgeting that starts from a 'zero base' and every function within an organization is analyzed for its needs and costs

• A method of budgeting that adds an additional budget month as each month passes

• A budgeting technique that requires substantial funds for capital expenditure

• A budgeting technique based on activity and revenue projections

What are the sources of generating project revenue?

• Selling products or services, Providing loans, Donations

• Investing in stocks, Renting out property, Selling products or services

• Selling products or services, Borrowing money, Donations

• Selling products or services, Renting out property, Providing loans

What are the ways to reduce operating costs?

• Outsourcing certain tasks, Increasing energy consumption, Negotiating worse deals with suppliers

• Hiring more employees, Expanding the business to new markets, Investing in new technology

• Outsourcing certain tasks, Reducing energy consumption, Negotiating better deals with suppliers

• Increasing the number of employees, Expanding the business to new locations, Investing in new technology