FINAL

Question 1

a financial plan of there sources needed to carry out tasks and meet financial goals. It is a detailed plan for the future that is usually expressed informal quantitative terms.

Answer 1

Budget

Question 2

is the act of preparing a budget.

Answer 2

Budgeting

Question 3

the use of budgets to control a firm’s activities.

Answer 3

Budgetary Control

Question 4

It all starts with a vision. What are your company’s financial objectives?
Growth, profitability, debt reduction?
Define clear goals to guide your budgetary decisions.

Answer 4

Goal Setting

Question 5

Historical data is your treasure trove.
Analyze past income statements, balance sheets, and cashflow statements to identify trends, seasonality, and areas for improvement.

Answer 5

Financial Statements Analysis

Question 6

This is where your crystal ball comes in.
Use market research, sales pipelines, and historical data to estimate future revenue streams.
Be realistic, but don’t be afraid to adjust based on market changes.

Answer 6

Revenue Forecasting

Question 7

Every penny counts.
Analyze past expenses, identify cost-saving opportunities, and factor in planned investments or expansions.
Categorize expenses for better control and allocation

Answer 7

Expense Planning

Question 8

Don’t just predict the likely future, prepare for the “what-ifs.“
Create different budget scenarios based on best-case, worst-case, and midrange predictions.
This flexibility is crucial for navigating uncertainties.

Answer 8

Scenario Planning

Question 9

Budgeting isn’t a solo act.
Involve key stakeholders from sales, marketing, and operations.
Gather their insights, address their concerns, and create a budget that everyone understands and supports.

Answer 9

Collaboration and Communication

Question 10

The budget is a living document, not as tone tablet.
Regularly monitor actual performance against your forecasts.
Be prepared to adjust expenses, revenue estimates, or even goals if needed.

Answer 10

Monitoring and Adjustment

Question 11

No more flying blind. A budget gives you a transparent view of your company’s financial health, highlighting strengths and weaknesses.

Answer 11

Financial Clarity

Question 12

Allocate resources effectively. Prioritize investments, identify growth opportunities, and make strategic decisions based on data, not gut feeling.

Answer 12

Informed Decision Making

Question 13

Anticipate potential cash flow problems, identify financial vulnerabilities, and develop contingency plans to weather storms.

Answer 13

Proactive Risk Management

Question 14

Align everyone on the financial goals. A shared budget fosters trust, transparency, and accountability across departments.

Answer 14

Improved Communication

Question 15

Track progress towards goals. Compare actual results to your budget to measure success, identify areas for improvement, and refine future forecasts.

Answer 15

Performance Measurements

Question 16

The future is rarely crystal clear. Market changes, competitor actions, and unforeseen events can throw your forecasts off track.

Answer 16

Incomplete Information

Question 17

Overoptimism, fear of missing out, and departmental pressures can lead to inaccurate estimates or unrealistic goals.

Answer 17

Human Biases

Question 18

The future is rarely crystal clear. Market changes, competitor actions, and unforeseen events can throw your forecasts off track

Answer 18

Limited Resources

Question 19

Changing habits and ingrained behaviors can be challenging. Implementing a new budget may face internal pushback from those who prefer the status quo.

Answer 19

Organizational Resistance

Question 20

Outdated systems, siloed data, and lack of user-friendly budgeting tools can make the process cumbersome and inefficient.

Answer 20

Technological Hurdles

Question 21

A continuous or perpetual budget does have many months?

Answer 21

12 months

Question 22

Many managers believe that being
empowered to create this is the most effective method of budget preparation.
Also called a participative budget is a budget that is prepared with the full cooperation and participation of managers at all levels.

Answer 22

Self Imposed Budget

Question 23

What are the advantages of self Imposed budget

Answer 23

Recognized as members of the team.
More accurate and reliable.
Motivation is generally higher. Create commitment.

Question 24

What are the types of budget?

Answer 24

The Operating Budget
The Financial Budget
The Capital Investment Budget

Question 25

What are the sub classification of operating budget

Answer 25

Operating Budget
1. Budgeted Income Statement
a. Sales Budget
b. Production Budget
-Material Cost Budget
-Direct Labor Cost Budget
-Factory Overhead Budget
-Inventory Level
2. Cost of Sales Budget
3. Selling and Administrative Expenses Budget
4. Financial Expense Budget

Question 26

What are the sub classification of financial budget

Answer 26

1. Budgeted Statement of Financial Position
2. Cash Budget
3. Budgeted Statement of Sources and Uses of Funds

Question 27

What are the Advantages of a Solid Budget

Answer 27

A. Financial Clarity
B. Informed Decision Making
C. Proactive Risk Management
D. Improved Communication
E. Performance measurement

Question 28

What are the constraints in Budget Preparation

Answer 28

A. Incomplete Information
B. Human Biases
C. Limited Resources
D. Organizational Resistance
E. Technological Hurdles