Budget Management & Financial Planning Flashcards
7 cards from real CMP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Budget Management & Financial Planning flashcards as text
A planner collects registration fees six months before an event. Under sound financial practice, how should these funds be treated until the event occurs?
Answer: Held as deferred revenue (a liability) because the service obligation has not yet been fulfilled
Registration fees collected before the event are deferred revenue—a liability—because the organization still owes the attendee the event experience.
A CMP is drafting a hotel contract for 500 room nights. The hotel proposes a 20% attrition allowance. How many room nights must be picked up to avoid any penalty?
Answer: 400
A 20% attrition allowance means the client must pick up at least 80% of 500 = 400 room nights to avoid penalty.
Which of the following BEST represents a non-cash expense that a meeting planner should still account for in the event's full financial picture?
Answer: In-kind sponsorships where products or services are donated in lieu of cash
In-kind sponsorships have real monetary value that should be recorded as both revenue and expense to reflect the event's true economic activity.
A planner needs to present a simplified financial snapshot of the event to senior leadership. Which document is MOST appropriate?
Answer: An executive budget summary showing key revenue and expense categories with variance to plan
An executive summary distills the financial story into the key metrics leadership needs without overwhelming detail.
Which risk is MOST directly created by relying heavily on a single large sponsorship to fund an event?
Answer: Revenue concentration risk, where withdrawal of one sponsor can make the event financially unviable
Dependence on a single revenue source creates concentration risk; if that sponsor withdraws, the entire event budget is threatened.
A planner estimates food and beverage costs at $45 per person and expects 400 attendees, but only 320 attend. Assuming F&B is a purely variable cost, what is the actual F&B expenditure?
Answer: $14,400
Variable costs scale with attendance: 320 attendees × $45 = $14,400.
When is it MOST appropriate for a CMP to request an audit of an event's financial records?
Answer: When required by the organization's financial policies, grant funding terms, or when significant financial irregularities are suspected
Audits are triggered by organizational policy, external funding requirements, or suspicion of irregularities—not solely by event size or financial outcome.