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NAME: - SECTION: - Classwork: Financial Planning, Tools, and Concept (Budgeting) Business Finance I. True or False

This document contains a true/false quiz and multiple choice questions about financial planning tools and concepts like budgeting. It tests understanding of key terms like short-term and long-term financial plans, budgets, forecasts, and how they are used together. The true/false questions cover topics like what activities are included in strategic financial plans and how assumptions in budgets should be revised. The multiple choice questions ask about which tools are best for monitoring cash or projecting operations results, and the appropriate order for preparing operational budgets.

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SOFIA YASMIN VENTURA
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47 views

NAME: - SECTION: - Classwork: Financial Planning, Tools, and Concept (Budgeting) Business Finance I. True or False

This document contains a true/false quiz and multiple choice questions about financial planning tools and concepts like budgeting. It tests understanding of key terms like short-term and long-term financial plans, budgets, forecasts, and how they are used together. The true/false questions cover topics like what activities are included in strategic financial plans and how assumptions in budgets should be revised. The multiple choice questions ask about which tools are best for monitoring cash or projecting operations results, and the appropriate order for preparing operational budgets.

Uploaded by

SOFIA YASMIN VENTURA
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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NAME:_____________________________

SECTION:__________________________

CLASSWORK: FINANCIAL PLANNING, TOOLS, AND CONCEPT (BUDGETING)


BUSINESS FINANCE

I. TRUE OR FALSE
On the space provided, write TRUE if the idea being expressed is correct and
FALSE if otherwise.
_______________1. A financial plan serves as a roadmap for a business
organization.
_______________2. A short-term financial plan is composed of a series of short-
term financial plan of the entity.
_______________3. A long-term financial plan is composed of a series of short-term
financial plans.
_______________4. Profit planning allows a business to project its results of
operations.
______________5. A short-term financial plan would range for 5-10 years at a
minimum.
_______________6. A long-term financial plan would affect the firm in the
immediate future, such as 1 to 2 years.
_______________7. A budget is a tool that facilitates profit planning.
_______________8. Financial planning is an essential tool to help manage
business operations.
_______________9. Acquisition of major capital assets is an example of an activity
included in a firm’s strategic financial plan.
_______________10. Projection of the firm’s operation results, along with short-term
resource needs form part a short-term financial plan.
_______________11. A budget is a qualitative plan for a business organization.
_______________12. A sales forecast is the most important assumption in
preparing a budget.
_______________13. Assumptions made in preparing a budget should not be
revised in light of more relevant information becoming available.
_______________14. A cash budget shows a projection of the cash inflows and
outflows of the entity for a given period of time.
_______________15. Depreciation expense is included in the firm’s cash
disbursement projections.
_______________16. Under the judgmental approach, a plug figure in the form of
an external financing needed is used to maintain the equality in a statement of
financial position.

_______________17. A master budget is a compilation of all other operational


budgets a business organization has.
_______________18. A flexible budget does not account for variations in activity
levels of a firm.
_______________19. If a firm’s cash balance falls below a minimum requirement,
there is a need to obtain external financing.
_______________20. A budgeted income statement shows the projected resources
and obligations of a firm over a specific time period given.
II. IDENTIFICATION
Identify the term/s being described by each statement

_______________21. A plan expressed in quantitative terms, which emphasizes the


resource use and resource allocation of an entity over a specified period of time.
_______________22. It sets out road maps intended to guide, coordinate, and
control actions undertaken by the firm in order to achieve its objectives.
_______________23. Lays out the direction of the firm through intended actions
whose anticipated results are expected to produce an impact within the firm for a
period of five to ten years.
_______________24. It specifies financial actions whose result or impact are
expected to occur for a shorter period of time, typically one to two years.
_______________25. Projects the firm’s results of operations and overall financial
positions for a given period of time, on the basis of both historical information and
assumptions about the near future.
_______________26. Represents the overall plan of an organization for a given
period. It is an aggregation of all lower level budgets in the organization.
_______________27. A budget allows for varying provisions based on a given level
of activity. Usually prepared at the end of the period for purposes of comparing
actual with budgeted results.
_______________28. A prediction of the firm’s sales over a specific period, based
on external and internal information.
_______________29. Shows the planned inflows and outflows of cash in the entity
for a given period of time.
_______________30. The most common method used in projecting the statement of
financial position.

III. MULTIPLE CHOICE


Circle the choice that corresponds to the best answer.
31. Mark, a merchandiser of shirts is planning to forecast the most likely results of its
operations for the next year. Which should be determined first in order to have a
sound projection of operation results?
a. Sales budget c. Purchases budget
b. Sales forecast d. Cash budget
32. A finance manager was tasked to carefully monitor the entity’s cash balance for
the end of each quarter. A ____________ is the most appropriate tool for this
goal.
a. Sales budget c. Cash budget
b. Budgeted income d. Budgeted statement of
statement financial position
33. A long-term financial plan would most likely include all of the following except:
a. Acquisition of capital assets
b. Research and development foe new projects
c. Sources of long-term financing
d. Cash budget for one year
34. All of the following are advantages of preparing a budget except:
a. It forces managers to quantify plans and proposals
b. It provides a measure of performance evaluation
c. If forces cooperation and coordination among units in the organization
35. Which of the following is not a source of cash for an entity?
a. Cash sales
b. Collection of receivables
c. Payment of expenses
d. Investment from the owner
36. Which of the following is not an example of a cash outflow for the firm?
a. Payment of purchases on account
b. Payment of this month’s utilities
c. Receipt of cash dividends
d. Disbursement of loan payments
37. Which of the following is not a valid assumption to be used in preparing a
projected balance sheet?
a. Cash balance is maintained at its current level
b. Accounts payable is expected to decrease by 50%
c. Net fixed assets is expected to total PHP85,000
d. Equity of the firm is maintained at its current level, ignoring any results of
operations
38. A projected income statement will reflect all of the following except:
a. Cash balance
b. Sales
c. Cost of sales
d. Operating expenses
39. Which is an appropriate sequence in preparing a series of operational budgets?
a. Sales budget, purchase budget, cost of sales budget, budgeted income
statement
b. Purchase budget, cost of sales budget, sales budget, budgeted income
statement
c. Budgeted income statement, sales budget, purchases budget, cost of
sales budget
d. Cost of sale budget, purchases budget, budgeted income statement, sales
budget
40. Which is not an operational budget?
a. Sales budget
b. Purchases budget
c. Capital budget
d. All are operational budgets.

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