CSA Financial Planning & Budgeting 3 — Questions and Answers
Question 1: A sugar artist offers a 10% discount on orders over $500. A client orders $600 worth of work. What is the final invoice amount?
- $490
- $530
- $540 (Correct answer)
- $560
Correct answer: $540
$600 × 10% = $60 discount; $600 - $60 = $540 final invoice amount.
Question 2: What is the purpose of maintaining a separate business bank account for a sugar art studio?
- To avoid paying taxes
- To simplify personal and business expense tracking (Correct answer)
- To qualify for higher loan amounts
- To hide income from the IRS
Correct answer: To simplify personal and business expense tracking
Separate accounts make bookkeeping cleaner, simplify tax preparation, and protect personal finances from business liabilities.
Question 3: Which type of insurance is most critical for a home-based sugar art business selling food products?
- Life insurance
- General liability and product liability insurance (Correct answer)
- Health insurance only
- Property insurance only
Correct answer: General liability and product liability insurance
General and product liability insurance protects against claims of injury or illness caused by your food products.
Question 4: A sugar artist earns $80,000 annually and estimates a 25% effective tax rate. How much should be set aside for taxes?
- $16,000
- $20,000 (Correct answer)
- $24,000
- $25,000
Correct answer: $20,000
$80,000 × 25% = $20,000 should be reserved for annual tax obligations.
Question 5: What is a retainer deposit in the context of custom sugar art orders?
- A refundable storage fee for equipment
- An upfront partial payment to secure a booking (Correct answer)
- A monthly membership fee for regular clients
- A penalty charged for order cancellations
Correct answer: An upfront partial payment to secure a booking
A retainer is an upfront deposit paid by the client to reserve the artist's time and commitment to their order.
Question 6: Which metric best indicates whether a sugar art business is growing year over year?
- Number of Instagram followers
- Year-over-year revenue growth percentage (Correct answer)
- Number of orders declined
- Amount spent on supplies
Correct answer: Year-over-year revenue growth percentage
Year-over-year revenue growth is the most direct financial metric for measuring business expansion.
Question 7: A sugar artist pays $1,200/year for business software and tools. What is the monthly equivalent expense?
- $80
- $100 (Correct answer)
- $120
- $150
Correct answer: $100
$1,200 ÷ 12 months = $100 per month for software and tools.
CSA Financial Planning & Budgeting 3
A sugar artist offers a 10% discount on orders over $500.
A client orders $600 worth of work.
What is the final invoice amount?