CCEP Budgeting & Financial Management 3

Question 1

Which budgeting method builds the budget from zero each cycle, requiring justification for every line item regardless of prior year spending?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting starts from a 'zero base' each period, requiring managers to justify all expenditures anew rather than simply adjusting prior figures.

Question 2

A sponsor provides $15,000 in cash and $5,000 in in-kind services for an event. How should in-kind contributions typically be treated in the budget?

Accepted Answer

Recorded as both revenue and expense at fair market value

Answer

In-kind contributions should be recorded as both revenue (sponsorship income) and expense (the service or product received) to accurately reflect total event value.

Question 3

What does 'accounts payable' represent in event financial management?

Accepted Answer

Money the organization owes to vendors for services rendered

Answer

Accounts payable are short-term liabilities representing amounts owed to external vendors and suppliers for goods or services already received.

Question 4

A conference generates $200,000 in revenue and has $160,000 in total expenses. What is the profit margin?

Accepted Answer

20%

Answer

Profit margin = (Revenue − Expenses) / Revenue × 100 = ($200,000 − $160,000) / $200,000 × 100 = 20%.

Question 5

Which of the following is an example of a variable cost in event budgeting?

Accepted Answer

Per-person meal cost

Answer

Per-person meal costs increase or decrease directly with attendance, making them a variable cost that scales with event size.

(CCEP) Certified Conference and Events Professional Practice Test

(CCEP) Certified Conference and Events Professional Practice Test

CCEP Budgeting & Financial Management 3