Question 1

The financial philosophy for your event may be:

Accepted Answer

The financial philosophy for an event can vary depending on the goals, and it may be profit-oriented, break-even, or a loss leader/hosted, making all options possible.

Question 2

When conducting research for your event, review the:

Accepted Answer

Reviewing the general economy and reasonable projected income helps in understanding the financial environment and potential budget constraints for the event.

Question 3

Typical income categories for your event may be:

Accepted Answer

Sponsorship and registration fees are typical income categories for events, as they generate revenue. Payments to subcontractors are expenses, not income.

Question 4

All of the following are typical expenses for your event, except:

Accepted Answer

Merchandise sales income is not a typical expense for an event. It is a source of revenue.

Question 5

Make certain that your accounting software is compatible with your:

Accepted Answer

Your accountant needs to work with your financial data, so compatibility with your accounting software is crucial for accurate financial management and reporting.

Question 6

Fixed overhead expenses for your event include the following items, except:

Accepted Answer

Catering for meal functions is typically considered a variable expense, as it can change based on the number of attendees or the specific requirements of the event. Fixed overhead expenses, on the other hand, are costs that do not fluctuate with the level of activity or attendance.

Question 7

Variable expenses include:

Accepted Answer

Variable expenses are costs that can change based on the level of activity or usage, and all the options listed (catering, audio visual, and registration materials) can vary depending on the event size or requirements.

Question 8

The difference between net and gross profit for your event is the:

Accepted Answer

Net profit is calculated by subtracting all expenses, including fixed overhead expenses, from gross profit.

Question 9

The foreign exchange rate is the:

Accepted Answer

The foreign exchange rate is the price of one currency expressed in terms of another currency.

Question 10

The account codes for your event depict:

Accepted Answer

Account codes for an event are used to categorize and detail line item income and expenditures, making both A and B correct.

Question 11

When budgeting expenses, it is important to:

Accepted Answer

The answer of When budgeting expenses, it is important to:
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Question 12

The budget for your event is based upon:

Accepted Answer

The budget for an event is typically based on historical data and comparable data, as these provide a realistic foundation for estimating costs. Wild guesses are not a reliable method for budgeting.

Question 13

When budgeting the income for your event, you should:

Accepted Answer

Under projecting revenue is a conservative approach that accounts for uncertainties and helps prevent budget shortfalls.

Question 14

It is important to identify all:

Accepted Answer

Identifying both expenses and sources of income is crucial for effective financial management and budgeting.

Question 15

Expenses may be:

Accepted Answer

Expenses can be either fixed or variable. Fixed expenses remain the same regardless of the level of activity, while variable expenses change with the level of activity.

Question 16

A fixed expense would be:

Accepted Answer

Fixed expenses are costs that do not change with the level of activity or volume of production. Insurance is typically a fixed expense as it is a regular, recurring cost that does not vary with business activity.

Question 17

The variance in your budget is the difference between:

Accepted Answer

Variance in a budget refers to the difference between what was projected or planned and what actually occurred.

Question 18

Many event organizations fail due to:

Accepted Answer

Poor financial planning and administration is a common reason for the failure of event organizations, as it affects budgeting, resource allocation, and overall financial health.

Question 19

Your accountant should have:

Accepted Answer

An accountant should be familiar with event budgets and local accounting laws and practices to effectively manage financial aspects and ensure compliance.

Question 20

You should try to identify more:

Accepted Answer

Identifying more income streams can help increase revenue and financial stability.

Quiz 5: Financial Administration