CAM Financial Management & Budgeting 2

Question 1

A client's account shows a 15% budget variance in Q2. What is the account manager's FIRST priority?

Accepted Answer

Analyze root causes before proposing corrective actions

Answer

Root cause analysis must precede corrective action to ensure the right solution is applied.

Question 2

Which budgeting method builds a new budget from zero each period rather than adjusting prior-year figures?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires justifying every expense from scratch each cycle regardless of prior budgets.

Question 3

An account manager tracks ROI for a client initiative. The project cost $50,000 and generated $80,000 in revenue. What is the ROI?

Accepted Answer

60%

Answer

ROI = (Net Profit / Cost) × 100 = ($30,000 / $50,000) × 100 = 60%.

Question 4

What does 'accounts receivable days' (DSO) indicate for a client's financial health?

Accepted Answer

The average number of days to collect payment after a sale

Answer

Days Sales Outstanding (DSO) measures how long on average it takes to collect receivables after a sale.

Question 5

A client requests a budget increase mid-year citing unforeseen market changes. The account manager should:

Accepted Answer

Evaluate the business case, impact, and available funding before deciding

Answer

Mid-year budget amendments require a structured business case review to justify reallocation of resources.

(CAM) Certified Account Manager Practice Test