Financial Management & Budgeting Flashcards
6 cards from real GCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Financial Management & Budgeting flashcards as text
What is a budget variance analysis in GCP financial management?
Answer: Comparing actual spending against budgeted amounts to identify and explain differences
Budget variance analysis compares actual financial results against budgeted amounts, calculating the differences (variances) and investigating the causes to improve future budgeting accuracy and cost control.
What is the difference between fixed and variable costs in GCP practice?
Answer: Fixed costs remain constant regardless of activity level; variable costs change with production volume
Fixed costs (rent, insurance, salaries) remain constant regardless of output level, while variable costs (materials, commissions, utilities) fluctuate directly with the volume of activity or production.
What is cash flow management in GCP practice?
Answer: Monitoring and optimizing the timing of money coming in and going out of an organization
Cash flow management involves tracking, analyzing, and optimizing the timing of cash inflows and outflows to ensure the organization always has sufficient funds to meet obligations while maximizing use of available cash.
What is the purpose of financial forecasting in GCP practice?
Answer: To predict future financial conditions based on historical data and current trends
Financial forecasting uses historical data, current trends, and assumptions to project future revenues, expenses, and financial position, supporting strategic planning and resource allocation decisions.
What is an internal control in GCP financial management?
Answer: A process designed to provide reasonable assurance about the reliability of financial reporting and compliance
Internal controls are policies, procedures, and practices designed to safeguard assets, ensure accurate financial reporting, promote operational efficiency, and ensure compliance with laws and regulations.
What does return on investment (ROI) measure in GCP financial analysis?
Answer: The gain or loss generated relative to the amount of money invested
ROI measures the efficiency of an investment by comparing the net gain or loss to the initial investment cost, expressed as a percentage. It helps compare the profitability of different investment options.