Budget Management Flashcards
7 cards from real CCEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Budget Management flashcards as text
A non-profit event planner must ensure the event budget complies with IRS rules on unrelated business income. What is the primary concern?
Answer: Ensuring event revenue from non-mission activities does not jeopardize tax-exempt status
Non-profit organizations must monitor unrelated business income (UBIT) because excessive revenue from non-mission activities can threaten tax-exempt status.
What is the purpose of establishing a 'budget freeze' policy during the final weeks before an event?
Answer: To prevent unauthorized expenditures that could disrupt the financial plan
A budget freeze restricts new spending commitments close to the event date, ensuring the financial plan remains intact during the high-pressure execution phase.
Which tool BEST helps a planner visualize cumulative cash outflows against the event timeline?
Answer: Cash flow projection or S-curve analysis
A cash flow projection or S-curve chart maps when money leaves the organization relative to the event timeline, helping planners manage liquidity.
An event's final reconciliation shows actual costs 8% below budget. What should a planner do with unexpended funds?
Answer: Return them to the general fund or apply them per organizational policy and document the variance
Unexpended budget funds must be handled according to organizational policy—typically returned to the general fund—and all variances must be documented for financial transparency.
A planner is evaluating whether to outsource event registration management or handle it in-house. This is called:
Answer: Make-or-buy analysis
Make-or-buy analysis compares the total cost of performing a function internally versus outsourcing it to an external vendor.
Which payment schedule provision BEST protects an event planner's cash flow when contracting with a venue?
Answer: Negotiating milestone-based payments tied to event deliverables
Milestone-based payment schedules align cash outflows with the receipt of agreed services, protecting the planner's liquidity and reducing upfront financial risk.
A planner identifies a 'sunk cost' in the event budget. How should sunk costs influence future spending decisions?
Answer: They should be ignored because they cannot be recovered regardless of future actions
Sunk costs are irretrievable past expenditures and should not influence future decisions, which should be based solely on expected future costs and benefits.