Budgeting and Financial Planning Quiz

What is the primary purpose of a budget in financial planning?

• To increase expenses

• To measure performance and forecast financial needs

• To eliminate costs

• To manage inventory only

Which of the following is NOT a type of budget mentioned in the lesson?

• Sales Budget

• Production Budget

• Tax Budget

• Cash Budget

What is the main component of a sales budget?

• Inventory levels

• Assumed price and quantity

• Employee salaries

• Fixed assets

Why is the sales budget important for production planning?

• It determines advertising costs

• It dictates how many units should be produced

• It helps in finalizing employee salaries

• It identifies loan requirements

Which budget includes manpower requirements, utilities, and supplies?

• Sales Budget

• Production Budget

• Cash Budget

• Expense Budget

Which budget summarizes expected cash inflows and outflows?

• Production Budget

• Expense Budget

• Cash Budget

• Marketing Budget

What is an example of cash inflow?

• Purchase of raw materials

• Interest income

• Payment of salaries

• Loan repayment

A company experiences a surplus when:

• Cash receipts exceed cash disbursements

• Expenses are higher than revenues

• Sales are lower than production costs

• The company borrows money

A cash budget deficit occurs when:

• The company has excess cash

• Total cash disbursements are higher than cash receipts

• The production budget is inaccurate

• The company sells too many products

Which of the following is NOT considered a cash disbursement?

• Payment of expenses

• Purchase of raw materials

• Depreciation expense

• Fixed asset acquisition