CET CET Budget & Financial Management 2

Question 1

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

Accepted Answer

Budget-to-actual report

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

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

Answer

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

Question 4

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

Accepted Answer

Per-person catering cost

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

CET - Certified Experiential Specialist Practice Test