This brief video describes how a business uses budgets and forecasting to determine future plans and actions. This activity is important because it also explains the need for financial control in a business to recognize when changes need to be made in order to bring the company back into alignment with its budgets.

The goal of this activity is to demonstrate your understanding of the information required to make a forecast and budget, and why these tools are helpful to the overall financial health of a business

Q-1 The three key components of financial planning include

(A)Multiple Choice

(B)forecasting, budgeting, and implementation.

(C)forecasting, budgeting, and control.

(D)budgeting, strategy creation, and implementation.

(E)the balance sheet, the income statement, and the cash flow statement

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Q-2 The prediction of how money will come into the business and flow out of a business is the essential concept involved in

(A)forecasting.

(B)business ownership.

(C)project management.

(D)budgeting.

(E)controlling.

Q-3 In general, forecasts and budgets that are 12 months or less in time are called

(A)long-term.

(B)short and long-term.

(C)liquid.

(D)obligatory.

(E)short-term.

Q-4 The purchase of major assets for a business can be found on which budget?

(A) All three of these are correct.

(B) None of these are correct.

(C) capital budget

(D) cash budget

(E) operating budget

Q-5 When the real dollar figures are known and then these figures are compared to what was budgeted, this process is called

(A) the reimbursement method.

(B) the forecasting process.

(C) Both the budget process and the forecasting method are correct.

(D) the financial control process.

(E) the budget process.