Free CFM Budgeting & Forecasting Questions and Answers

Question 1

What is the main purpose of budgeting?

Accepted Answer

To plan and control finances

Answer

To spend money without limits.

Answer

To avoid financial planning.

Answer

To delay expenses.

Question 2

What is rolling forecasting?

Accepted Answer

Continuous updating forecast

Answer

One-time forecast.

Answer

Ignoring budget changes.

Answer

Fixed budgeting.

Question 3

Which budgeting method allocates resources based on last period?

Accepted Answer

Incremental budgeting

Answer

Zero-based budgeting.

Answer

Activity-based budgeting.

Answer

Flexible budgeting.

Question 4

What is a forecast in financial planning?

Accepted Answer

Prediction of future results

Answer

Historical data only.

Answer

Random guess.

Answer

Past expenses.

Question 5

Why is variance analysis important?

Accepted Answer

To identify performance gaps

Answer

To ignore differences.

Answer

To increase costs.

Answer

To delete budgets.

Question 6

Which tool is often used for financial forecasting?

Accepted Answer

Excel

Answer

PowerPoint.

Answer

Photoshop.

Answer

Word.

Question 7

What does flexible budgeting allow?

Accepted Answer

Adjusting budgets dynamically

Answer

Fixed spending.

Answer

Ignoring variances.

Answer

Delaying expenses.

Question 8

What is a budget variance?

Accepted Answer

Difference between budget and actual

Answer

Matching budget perfectly.

Answer

Ignoring expenses.

Answer

Forecasting errors.

Question 9

Why is forecasting important for businesses?

Accepted Answer

To anticipate needs and decisions

Answer

To guess randomly.

Answer

To avoid planning.

Answer

To delay reporting.