Budgeting in Business Quiz

What does the budgeting process involve?

• Hiring new employees

• Defining revenue & spending goals and estimates

• Expanding the business

• Reducing costs

What is the final figure in a Cash Budget?

• Estimated sales revenue

• Estimated cash at bank

• Estimated employee count

• Estimated market share

What is the second step in preparing a Cash Budget?

• Estimate the cash income from sales

• Estimate any other cash inflows such as interest

• Estimate the cash to be paid for purchases

• Estimate any other cash payments

What is the role of variance reports in budgeting?

• To increase sales

• To identify favourable or unfavourable changes

• To hire new staff

• To expand the business

What is the fourth step in preparing a Cash Budget?

• Estimate the cash income from sales

• Estimate any other cash inflows

• Estimate the cash to be paid for purchases

• Estimate any other cash payments

What is the expected cost of sales for Wristies®?

• $5,000

• $6,000

• $7,000

• $8,000

How often should a business owner review & adjust budget estimates?

• Quarterly

• Weekly

• Monthly

• Annually

What is the percentage variance formula?

• (Actual - Estimate) / Actual x 100

• (Estimate - Actual) / Estimate x 100

• (Difference in the estimate x 100) / Original estimate

• (Original estimate x 100) / Difference in the estimate

In the variance report scenario, what was the variance for cash fees?

• $1,000 Unfavourable

• $10,000 Favourable

• $1,000 Favourable

• $10,000 Unfavourable

When a business has insufficient cash inflows to pay costs it has a cash (a)