CCEP Budgeting & Financial Management 5

Question 1

When collecting registration fees via credit card, which additional cost must an event planner account for in the budget?

Accepted Answer

Merchant processing fees (typically 2–4% of transaction)

Answer

Payment processors charge a percentage-based merchant fee on each credit card transaction, which directly reduces net registration revenue.

Question 2

A hotel's attrition clause states that 90% of contracted room nights must be filled or penalties apply. The event books 80% of rooms. What is the financial consequence?

Accepted Answer

The organization pays for the 10% shortfall in room nights at the contracted rate

Answer

Attrition clauses require organizations to pay for a percentage of unused contracted rooms, so a 10% shortfall means the group is billed for those unfulfilled room nights.

Question 3

Which document outlines the detailed breakdown of all anticipated revenues and expenses for an event before it occurs?

Accepted Answer

Preliminary pro forma budget

Answer

A pro forma budget is a forward-looking financial projection that estimates revenues and expenses before the event takes place.

Question 4

An event planner needs to demonstrate ROI to a corporate client. Which formula correctly calculates event ROI?

Accepted Answer

(Net Profit / Total Investment) × 100

Answer

ROI = (Net Profit / Total Investment) × 100, which measures the return generated relative to the money invested in the event.

Question 5

Which type of budget approach adjusts forecasts on a continuous basis by adding a future period as the most recent period is completed?

Accepted Answer

Rolling (continuous) budgeting

Answer

Rolling budgets continuously extend the planning horizon, dropping the most recent completed period and adding a new future period to maintain a consistent planning window.

(CCEP) Certified Conference and Events Professional Practice Test

(CCEP) Certified Conference and Events Professional Practice Test

CCEP Budgeting & Financial Management 5