CMP Budget Management & Financial Planning 5

Question 1

A planner collects registration fees six months before an event. Under sound financial practice, how should these funds be treated until the event occurs?

Accepted Answer

Held as deferred revenue (a liability) because the service obligation has not yet been fulfilled

Answer

Recognized immediately as earned revenue and added to the operational budget

Answer

Invested in equities to earn a return before the event

Answer

Distributed to vendors as deposits as soon as collected

Question 2

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?

Accepted Answer

400

Answer

500

Answer

100

Answer

450

Question 3

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?

Accepted Answer

In-kind sponsorships where products or services are donated in lieu of cash

Answer

Speaker travel reimbursement paid by check

Answer

Early registration discounts applied to invoices

Answer

Venue deposit paid by wire transfer

Question 4

A planner needs to present a simplified financial snapshot of the event to senior leadership. Which document is MOST appropriate?

Accepted Answer

An executive budget summary showing key revenue and expense categories with variance to plan

Answer

A detailed vendor payment ledger

Answer

The complete chart of accounts with every transaction listed

Answer

Individual vendor contracts with payment schedules

Question 5

Which risk is MOST directly created by relying heavily on a single large sponsorship to fund an event?

Accepted Answer

Revenue concentration risk, where withdrawal of one sponsor can make the event financially unviable

Answer

Increased competition from other events in the same market

Answer

Higher printing costs due to prominent sponsor branding requirements

Answer

Reduced attendee satisfaction due to over-commercialization

Question 6

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?

Accepted Answer

$14,400

Answer

$18,000

Answer

$16,000

Answer

$45,000

Question 7

When is it MOST appropriate for a CMP to request an audit of an event's financial records?

Accepted Answer

When required by the organization's financial policies, grant funding terms, or when significant financial irregularities are suspected

Answer

Only when the event loses money

Answer

After every event regardless of size or complexity

Answer

Only for events with more than 1,000 attendees