Question 1

Control systems ensure that:&#10;A) Fraud does not occur&#10;B) Mistakes are monitored&#10;C) Variance is monitored&#10;D) All financial transactions are fully documented and reported

Accepted Answer

D

Question 2

Gross profit is:&#10;A) The actual profit after total expenses have been paid&#10;B) The profit before taxes&#10;C) The profit excluding GST&#10;D) The profit made after deducting costs associated with providing goods and services

Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold (COGS) from total revenue, which represents the profit made before deducting operating expenses, interest, taxes, and other expenses. It specifically relates to the costs directly associated with the production of goods or the provision of services.

Question 3

Which of the following is an external factor that needs to be considered when preparing a budget?&#10;A) Supplier availability&#10;B) The scope of the project&#10;C) The type of client&#10;D) Cost of training volunteers

Accepted Answer

Supplier availability is an external factor because it involves entities outside of the organization that can affect the budget through their pricing, availability, and reliability.

Question 4

Calculating the break-even point shows you:&#10;A) How many tickets you need to sell before making a profit&#10;B) How your cash flow will impact on the bottom line&#10;C) What would happen if you ran the event over a longer period&#10;D) How much tax should be paid

Accepted Answer

The break-even point calculation helps you determine the minimum amount of sales (in this case, tickets) needed to cover your costs, beyond which you start making a profit. It does not directly relate to cash flow impact, event duration, or tax obligations.

Question 5

Which of the following is NOT a source of income?&#10;A) Rental for stalls&#10;B) Parking fees&#10;C) Commissions paid on ticket sales to a distributor&#10;D) Merchandise sales

Accepted Answer

Commissions paid on ticket sales to a distributor are not a source of income; instead, they are an expense as they represent payments made to a third party for services rendered in selling tickets.

Question 6

If you had 400 people attending an event paying $120 per head, the income would be:&#10;A) $48,000&#10;B) $46,000&#10;C) $200,000&#10;D) $24,000

Accepted Answer

The income is calculated by multiplying the number of people attending (400) by the cost per head ($120), which equals $48,000.

Question 7

The balance sheet:&#10;A) Shows monthly gross profit&#10;B) Is a statement of financial position&#10;C) Does not include invoices to be paid&#10;D) Does not include cash flow

Accepted Answer

The balance sheet is a statement of financial position that shows the assets, liabilities, and equity of a company at a specific point in time. It does not include invoices to be paid or cash flow.

Question 8

Physical assets:&#10;A) Are liabilities&#10;B) Are assets&#10;C) Are items that have no value&#10;D) Are fixtures and fittings (FFE)

Accepted Answer

The answer of Physical assets:&#10;A) Are liabilities&#10;B) Are assets&#10;C) Are...

Question 9

Which of the following actions is recommended for monitoring and reviewing budgets for an event project?&#10;A) Prepare the budget in advance of giving the client a quote&#10;B) Continually review and update the budget as planning progresses&#10;C) Pay invoices promptly&#10;D) Analyse economic conditions

Accepted Answer

Continually reviewing and updating the budget as planning progresses is essential for effective financial management of an event project. This ensures that any changes in costs or resources are accounted for, allowing for adjustments to be made in a timely manner to stay within budget.

Question 10

A budget is:&#10;A) An end-of-year report&#10;B) A forecast&#10;C) A way to solve business problems after they occur&#10;D) The basis for managing inventory

Accepted Answer

A budget is primarily a forecast, a financial plan for a defined period, often one year, that quantitatively describes an organization's planned revenues, expenses, and capital expenditures. It is used to project future income and expenses, helping businesses allocate resources, manage cash flows, and plan for future financial activities.

Deck 21: Prepare and Monitor Budgets