hsb business start

Which of the following is a true statement about budgets:

They are used for a variety of different purposes.

Customer benefits

products offered

What you charge for your products

products offered

Gather relevant data—in Wyatt's case, data will come from __________ and estimates. 3. Plug in the data.

research

Which of the following is a source of budgeting data for a start-up business:

research

You'll have to develop a budget," Aunt Thea tells him. "It's an estimate of your __________

revenue

Evaluate and __________ the budget as necessary.

revise

And, if you keep adding more time to the end of the budget period, it's called a(n) __________ budget."

rolling/continous

A business's main source of revenue is usually

sales income.

An advantage of incremental budgeting is that it

saves time

"One useful tool for budgeting is __________," Thea continues. "It's a method of measuring the effect a change in one variable will have on another variable. In your case, you might measure the effect that hiring a part-time employee would have on your overall sales volume and income."

sensitivity analysis

When employees do equal work and have equal responsibilities, the Equal Pay Act makes it illegal for businesses to discriminate in pay on the basis of

sex.

Aunt Thea fills Wyatt in on some common types of budgets. "A(n) __________ budget covers 12 months," she says.

short-term/operating

How you will approach advertising

strategy and implication

Plan for sales force

strategy and implication

Sections with corresponding page numbers

table of contents

A disadvantage of incremental budgeting is that it

isn't cost effective.

An internal method of recruiting employees is through

job postings

"This is your go-to budget to consult and adjust daily. A(n) __________ budget, on the other hand, usually covers about three years."

long-term

Number of employees in the business

management plan

Personnel costs

management plan

Industry outlook

market analysis

Information on target market

market analysis

A fixed budget is used to

measure profit or performance.

When upper management and department managers work together, the budgeting process becomes

more accurate.

Which of the following is a major disadvantage to a business of recruiting job applicants through outside agencies:

Cost of agency services

Which of the following budgets is used to compare to the fixed budget:

Flexible budget

Which of the following budgets serves as the go-to guide for managers to consult and adjust on a regular basis:

Short-term budget

Which of the following is an example of a fixed expense:

Insurance

Which of the following is an example of a variable expense:

Packaging/Shipping costs

Which of the following is a source of budgeting data for an established business:

Past tax returns

Every budget should contain which of the following two components:

Revenue and expenses

Which of the following is a true statement regarding the relationship between departmental budgets and the overall company budget:

The budgets must be in sync with one another.

The main advantage of a rolling budget format is

always having a short-term budget on hand.

Next, Aunt Thea explains budgeting strategies to Wyatt. "The traditional budgeting strategy is __________ budgeting," she says.

incremental

Company literature

appendices

Letters of reference

appendices

The first step in developing a budget for a department/company is to

choose or create a budget format.

Legal structure of the business

company description

Operating days and hours

company description

The end goal of budgeting is to plan and __________ organizational finances successfully.

control

Use the budget for financial planning and __________

control

A number for tracking purposes

cover page

Mission statement

executive summary

Purpose of the business plan

executive summary

and __________ for a certain period of time."

expenses

When screening applicants' résumés, businesses often use evaluation forms to qualify a person's training and

experience

Cash flow statement

financial plan

Income statement

financial plan

Wyatt learns that, to be financially successful, his budget must carefully track the money he brings in and the money he spends. Aunt Thea explains that __________ expenses are expenses that won't change with sales volume—Wyatt's rent, utilities, etc.

fixed

"You might want to create a budget to use as a guideline," Aunt Thea continues. "It's usually called a(n) __________ budget, and you don't change it.

fixed/master/static

You can create a(n) __________ budget to compare to it—kind of like an answer key and a test.

flexible/variable/dynamic

Lastly, Aunt Thea sums up the steps that Wyatt should take to develop his business budget: 1. Choose/Create your budget __________.

format

Sensitivity analysis aids in budgeting by measuring

how much a change in one variable will affect another variable.

A long-term budget typically covers a period of

three years.

Why do businesses routinely screen job applications and résumés?

to set up interviews

On the other hand, __________ expenses will go up and down depending on how much business Wyatt does.

variable

"When you use it, you just make small changes to the upcoming budget based on the results of the last budget. Unfortunately, though, it doesn't take changing circumstances and priorities into consideration. To do that, you'll need to use a __________ budgeting strategy. With that, you rebuild the budget from scratch each time. It takes longer, but it's more accurate."

zero-based

Rebuilding the budget for each new budgeting period is a strategy known as __________ budgeting.

zero-based