Chapter 4: Financial Resource Management

Question 1

Budget

Answer 1

type of operational plan for the coordination of resources and expenditures

Question 2

Spending-Ceiling Model

Answer 2

incremental model; type of expenditure budgeting that requires justification only for those expenses that exceed those of the previous budget cycle

Question 3

Spending-Reduction Model

Answer 3

type of budgeting used during periods of financial retrenchment that requires reallocation of institutional funds, resulting in reduced spending levels for some programs

Question 4

Zero-Based Budgeting

Answer 4

model that requires justification for every budget line item without reference to previous spending patterns

Question 5

Fixed Budgeting

Answer 5

method in which expenditures and revenues are projected on a monthly basis, thereby providing an estimate of cash flow

Question 6

Variable Budgeting

Answer 6

method requiring adjustment of monthly expenditures so that they do no exceed revenues

Question 7

Lump-Sum Budgeting

Answer 7

method that allocates a fixed amount of money for an entire program without specifying how the money will be spent

Question 8

Line-Item Budgeting

Answer 8

method that allocates a fixed amount of money for each sub function of a program

Question 9

Performance Budgeting

Answer 9

method that allocates funds for discrete activities

Question 10

Needs Assessment

Answer 10

systematic set of procedures undertaken to set organizational or programmatic priorities based on identified needs

Question 11

Need

Answer 11

the discrepancy between the present program status and the desired future state of one or more aspects of the program

Question 12

Purchasing

Answer 12

process of acquiring goods and services

Question 13

Request for Quotation (RFQ)

Answer 13

document that provides vendors with the specifications for bidding on the sale of goods and services

Question 14

Bidding

Answer 14

process whereby vendors provide cost quotations for goods and services they wish to sell

Question 15

Negotiations

Answer 15

process of bargaining

Question 16

Implied Warranty

Answer 16

an unstated understanding that a vendor will “make good” if a product is faulty

Question 17

Express Warranty

Answer 17

an explicit statement specifying the conditions, circumstances, and terms under which a vendor will replace or repair a product if found to be faulty

Question 18

FOB Point

Answer 18

freight-on-board point; point at which the title for shipped goods passes from vendor to purchaser

Question 19

Requisition

Answer 19

type of formal or informal communication, usually written, used for requesting authorization to purchase goods or service

Question 20

Purchase Order

Answer 20

document that formalizes the terms of a purchase and transmits the intentions of the buyer to purchase goods or services from a vendor

Question 21

Receiving

Answer 21

process of accepting delivery of goods purchased from a vendor

Question 22

Pooled Buying Consortium

Answer 22

group of similar institutions that merge resources to purchase goods in large quantities to receive volume discounts

Question 23

Inventory Management

Answer 23

process of controlling equipment and supply stocks so that services can be provided without interruption while the use of institutional resources is maximized