CRM Financial Management 5

Question 1

Which pricing strategy sets menu prices based on competitor pricing rather than internal costs?

Accepted Answer

Competitive pricing

Answer

Competitive pricing sets prices in relation to what competitors charge, regardless of the restaurant's own cost structure.

Question 2

What is 'shrinkage' in the context of restaurant inventory management?

Accepted Answer

Inventory loss due to theft, spoilage, or waste

Answer

Shrinkage refers to inventory reductions from employee theft, customer theft, spoilage, and administrative errors.

Question 3

A restaurant owner wants to evaluate the financial health before a potential sale. Which document provides a snapshot of assets, liabilities, and equity at a specific date?

Accepted Answer

Balance sheet

Answer

The balance sheet shows assets, liabilities, and owner's equity at a single point in time, reflecting the restaurant's financial position.

Question 4

If a restaurant has a debt-to-equity ratio of 2.5, what does this indicate?

Accepted Answer

The restaurant owes $2.50 for every $1 of owner equity

Answer

A debt-to-equity ratio of 2.5 means the restaurant has $2.50 in liabilities for every $1 of equity, indicating higher financial leverage.

Question 5

Which budgeting approach starts from zero each period and requires justification for every expense line?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires managers to justify every expense from scratch each period rather than adjusting prior-year figures.

(CRM) Certified Restaurant Manager Practice Test

(CRM) Certified Restaurant Manager Practice Test

CRM Financial Management 5