Budgeting involves creating a plan for how a business will spend its money over a specific

• Budget line

• Period

• Record

• Department

Which of the following describes financial forecasting?

• Reviewing last year’s budget

• Estimating future revenues and expenses

• Paying suppliers on time

• Writing a business proposal

The main purpose of budgeting is to:

• Avoid future plans

• Increase costs

• Manage resources effectively

• Decrease income

Cash flow refers to:

• The movement of goods between suppliers

• The movement of money in and out of the business

• The flow of customers entering the store

• The record of employee hours

Which statement helps a business identify its assets, liabilities, and equity?

• Cash Flow Statement

• Income Statement

• Balance Sheet

• Profit Report

What does liquidity ensure?

• Enough cash to meet daily obligations

• More long-term debts

• Reduced supplier payments

• Increased liabilities

Managing costs allows an entrepreneur to:

• Spend without control

• Cut unnecessary expenses

• Eliminate sales

Financial forecasting is based on:

• Guessing future prices

• Current data and trends

• Past marketing campaigns

• Employee surveys

The purpose of accurate record-keeping is to:

• Record all business transactions correctly

• Reduce transparency

• Hide company income

• Avoid financial reports

Variance analysis compares:

• Sales with competitors

• Forecasted results with employee ratings

• Actual performance with the financial plan

• Marketing data with production volume