CET Budget & Financial Management Flashcards

Which financial document provides a real-time comparison of budgeted versus actual event expenditures?

Answer: Budget-to-actual report

A budget-to-actual report shows variance between planned and real spending, allowing planners to identify and address overruns immediately.

In event contracts, 'attrition' most commonly refers to:

Answer: A penalty charged when a client fails to meet a minimum room block or attendance guarantee

Attrition clauses require clients to pay a penalty if they don't meet minimum commitments for hotel rooms or food and beverage minimums.

What is the primary purpose of collecting a deposit from a client before an event?

Answer: To secure the commitment and provide working capital for vendor deposits and early expenses

A client deposit confirms the engagement, reduces financial risk for the planner, and funds necessary upfront vendor payments.

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

Answer: Per-person catering cost

Per-person catering costs increase or decrease directly in proportion to the number of attendees, making them a variable cost.

What does 'cost per attendee' (CPA) help an event planner determine?

Answer: The efficiency and scalability of the event's budget relative to attendance

CPA divides total event costs by the number of attendees, revealing the per-person investment and enabling comparison across events.

Which risk does event cancellation insurance MOST directly protect against?

Answer: Financial losses resulting from having to cancel or postpone the event due to covered circumstances

Event cancellation insurance reimburses non-recoverable costs when an event must be cancelled or postponed due to circumstances covered by the policy.