Budgeting and Forecasting in the New Normal

Statement 1: Budgeting is a process of predicting the future using past data.

Statement 2: A Budget is used as a guide to control cost of different departments

• a. Statement 1 is True, Statement 2 is False

• b. Statement 1 is False, Statement 2 is True

• c. Both Statements are True

• d. Both Statements are False

This Forecasting Method uses this Formula :

Total Revenue / Sum of Past Sales Periods

• Historical Growth Method

• Linear Regression

• Run Rate Method

• Moving Average

This Forecasting Method uses Alpha and Beta Testing to obtain Sales forecast

• Consumer Survey Method

• Sales Force Composite Method

• Delphi Method

• Test Marketing Method

Which of the following is not part of Operating Budget?

• Sales Budget

• Selling and Administrative Budget

• Budgeted Income Statement

• Budgeted Statement of Financial Position

The following variables are needed to be considered in crafting a Budget except for:

• Keep Budget simple and realistic with SMART Goal

• Choose Forecasting Method to be used in Sales Budget

• Review Current Financial Position

• Align Budget to the Strategic Objectives of the Compmany

Budgeting provides insight on what a company could achieve while forecasting shows want a business wants to achieve for the future period.

• True

• False

Statement 1: Forecasting provides short term representation of actual circumstances which the business needs.

Statement 2: Budget should be updated frequently than once a year so that it can cope with current market activites

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both Statements are True

• Both Statements are False

What is SMART Goal?

• Simple, Measurable, Attainable, Relevant, Time-based

• Specific, Measurable, Attainable, Relevant, Time-based

• Simple, Measurable, Attainable, Reliable, Time-based

• Specific, Measurable, Attainable, Reliable, Time-based

The following are the variables needed to consider in crafting a Forecast except for:

• Develop Basis of Forecast

• Estimate future business Operations

• Know the reasons for Deviation in Forecast vs Actual Results

• Impose sanctions to employees for variances

Master Budget comprises of the following except:

• Operating Budget

• Financial Budget

• Capital Investment Budget

• Budget Policy