Quiz on Budgets in Private Companies

What is the purpose of a sales budget in a private company?

• To forecast cash flow

• To maintain visibility of product or service profitability

• To plan for long-term investments

• To estimate future expenses

What is the difference between a forecast and a budget?

• A forecast is a plan of work while a budget is an estimation of future expenses

• A forecast details sales completions while a budget estimates cash flow

• A forecast is a plan of work while a budget is an estimation of what will actually be achieved

• A forecast is a plan of work while a budget is a financial statement

How does the management of a company view budgets?

• As a forecast of future expenses

• As long-term investments

• As a plan of work for all areas and activities

• As financial statements

What is the main purpose of a short-term budget?

• To cover the organization's planning for a year's operations

• To estimate future expenses

• To plan for long-term investments

• To project the general activity of the company

What is the purpose of a budget of cash flow?

• To diagnose future cash inflows and outflows

• To plan for long-term investments

• To forecast sales completions

• To estimate future expenses

What is the principle of diversification in capital investment?

• Choosing the most valuable assets

• Choosing the most flexible assets

• Choosing the highest quality assets

• Choosing multiple options instead of a single one

What is the budget of capital investment used for?

• To estimate future expenses

• To plan for the company's cash flow

• To forecast sales completions

• To plan for long-term investments

What does the budget of cash flow show?

• The company's future sales and expenses

• The company's future cash inflows and outflows

• The company's future investments

• The company's future financial statements

What is the purpose of a budget of cash flow?

• To plan for long-term investments

• To forecast sales completions

• To estimate future expenses

• To diagnose future cash inflows and outflows

What is the purpose of a budget of cash flow?

• To diagnose future cash inflows and outflows

• To plan for long-term investments

• To forecast sales completions

• To estimate future expenses