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

Registration fees collected before the event are deferred revenue—a liability—because the organization still owes the attendee the event experience.

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

A 20% attrition allowance means the client must pick up at least 80% of 500 = 400 room nights to avoid penalty.

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

In-kind sponsorships have real monetary value that should be recorded as both revenue and expense to reflect the event's true economic activity.

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

An executive summary distills the financial story into the key metrics leadership needs without overwhelming detail.

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

Dependence on a single revenue source creates concentration risk; if that sponsor withdraws, the entire event budget is threatened.

(CMP) Certified Meeting Professional Practice Test

(CMP) Certified Meeting Professional Practice Test

CMP Budget Management & Financial Planning 5