Budget Planning & Development Flashcards
6 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Budget Planning & Development flashcards as text
What is the main objective of budget planning in an organization?
Answer: To allocate resources effectively
The primary purpose of budget planning is to allocate resources effectively to meet organizational goals and improve financial control.
Which of the following is typically the first step in the budget development cycle?
Answer: Identifying objectives and goals
Identifying organizational objectives and goals ensures that the budget aligns with the overall strategic direction of the entity.
Which type of budgeting requires justification for all expenses each period?
Answer: Zero-based budgeting
Zero-based budgeting ensures each expense must be justified regardless of prior budgets, helping reduce unnecessary costs.
Why is variance analysis crucial in budget management?
Answer: To detect deviations and improve accuracy
Variance analysis helps identify differences between planned and actual outcomes, allowing managers to address financial deviations effectively.
What is a rolling budget?
Answer: A continuously updated financial plan
A rolling budget is continuously updated, allowing organizations to adjust forecasts and allocations based on recent performance.
Which tool is most effective for forecasting in budget planning?
Answer: Trend analysis
Trend analysis uses historical data to predict future outcomes, making it a reliable method for forecasting in budget planning.