This morning the travel headlines begin: "Looking for an exotic fall destination on a tight budget? Fiji might be just the ticket."Positively ridiculous! In my world a tight budget means eating in instead of eating out, buying shoes at Payless rather than Nordstrom, and reducing the channels on my Dish Network package. A vacation is scarcely a consideration. And one to Fiji? No, not to be found anywhere - not even in the fine print - of my definition of "tight budget".
However, there is a promotion which is evidently placing the alluring island within reach of some families. It is all being made possible because of Air Pacific's children-fly-free offer. Yet a quick review of my budget, followed by double checking my bank account balance confirms my suspicions. No Fiji for our family. Not this fall.
Budgets are not just a realization for families with children. Businesses work within budgets as well. Some may mistake the need for a budget with cash-flow issues. But regardless of the volume of cash flow and/or cash reserves a business (or family) may or may not enjoy, a budget is a critical component for success in any organization.
If you find your budget allows for a Fiji excursion this fall, pack the sunscreen and scuba gear, and enjoy! If such an adventure is not in the cards, then give me a ring and I'll save you a table next to ours at Chuck E. Cheese where we can make a better budget plan for fall 2011's vacation.
Sample Test Question Task 1-B-1
Peter, a supply manger for Quintis Corporation is working with his financial analyst in a new division of their company. Together they are planning strategic purchases for the upcoming year. Last year the new division was provided a small initial capital investment funded by the parent company for initial start-up expenses. Now the only allowed expenditures are based solely on the revenue the new division produces. The new division of Quintis Corporation is being controlled by which type of budget:
A) Zero-based budget
B) Cash-flow budget
C) Line-item budget
D) Program budget
2 comments:
Answer: B
When the budgeted expenditures are linked to revenue for the budget period, such budgets are called cash-flow budgets.
Option A, Zero-based: Applicable when past experience is not used to determine future needs.
Option C, Line-Item: Category based like Salaries, Office expenses, Overhead, etc. They are usually based on last year budget.
Option D, Program: These are linked to objectives/goals. eg: government programs
Satyam,
Welcome and yes! Thank you for your answer. You are exactly right. In a tight budgetary control where budget is determined by revenue, that would be known as a cash-flow budget.
Great job!
Debbie
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