Flash Card Quiz: Budgets & Cash Flow

What is the first step in constructing a budget?

• Analyzing past budgets

• Setting financial goals

• Estimating income and expenses

• Reviewing financial statements

Which of the following is not an example of a budget?

• Income

• Profit

• Asset

• Expenditure

What is variance analysis used for in budgeting?

• To predict future sales

• To compare actual performance with budgeted performance

• To allocate resources

• To determine tax liabilities

What is an adverse variance?

• When actual income is higher than budgeted

• When actual expenses are lower than budgeted

• When actual performance is worse than budgeted

• When budgeted performance is met

What is a favorable variance?

• When actual performance is worse than budgeted

• When actual income is lower than budgeted

• When actual expenses are higher than budgeted

• When actual performance is better than budgeted

What is the value of budgeting?

• It helps in tax calculation

• It provides a financial roadmap

• It increases expenses

• It reduces income

What is the purpose of a cash flow forecast?

• To determine profit margins

• To predict future cash inflows and outflows

• To calculate tax liabilities

• To assess asset value

What does net cash flow represent?

• Total income minus total expenses

• Total assets minus total liabilities

• Total cash inflows minus total cash outflows

• Total profit minus total loss

What are opening and closing balances in a cash flow forecast?

• The initial and final amounts of cash available

• The total income and expenses

• The total assets and liabilities

• The profit and loss figures

What is the first step in analyzing a budget?

• Reviewing financial statements

• Comparing actual and budgeted figures

• Setting new financial goals

• Calculating net profit