CAM Financial Management & Budgeting Flashcards
6 cards from real CAM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CAM Financial Management & Budgeting flashcards as text
Return on investment (ROI) is calculated as:
Answer: Net profit divided by cost of investment, multiplied by 100
ROI measures the gain or loss from an investment relative to its cost, expressed as a percentage.
Which term describes the minimum level of sales or activity needed for an organization to cover all its costs without generating a profit or loss?
Answer: Break-even point
The break-even point is where total revenue equals total costs, resulting in neither profit nor loss.
Depreciation in financial management refers to:
Answer: The systematic allocation of a tangible asset's cost over its useful life
Depreciation spreads the cost of a long-term asset across the periods it provides economic benefit, matching expense with revenue.
Which document projects the organization's expected cash inflows and outflows over a future period?
Answer: Cash flow forecast
A cash flow forecast helps managers anticipate liquidity needs by estimating when cash will be received and paid out.
When preparing an annual administrative budget, which step should occur FIRST?
Answer: Review prior year actual expenditures and variances
Analyzing prior year actuals and variances provides the baseline data needed to make accurate and informed budget projections.
A purchase that provides long-term benefit and is recorded as an asset rather than an immediate expense is classified as a:
Answer: Capital expenditure
Capital expenditures (CapEx) are investments in long-term assets that are depreciated over their useful life rather than expensed immediately.