General Budget Qs
Two expenses that are paid on a monthly basis
What are rent, utilities, loan payments, phone payments, salaries, etc.
What is a fixed expense?
An expense that does not change from month to month.
Within a Not For Profit Organization/First Nation, who approves the budget?
The Board of Directors/Chief & Council
What is quarter in a fiscal year?
Normally 3 months, at 4 quarters. Apr to Jun, or Jul to Sep, or Oct to Dec or Jan to Mar,
What are budgets?
Forecasted plans of expected revenues and expenditures for a department/programs
What is a variable expense?
An expense that does changes from month to month and depends on activity
An adverse variance
When actual costs are higher than budgeted costs (at the end of the month).
What is depreciation/amortization?
The cost of an assets use, i.e. vehicle, building, equipment
What is a benefit of budgeting?
Allows the organization to achieve financial goals, achieves results, secures funding for the delivery of programs and services.
An expense for paying employees
Salaries/Wages
What is a limitation (drawback) of budgeting?
Conflict can occur between departments over of how funding is allocated.
What is a surplus?
The difference of revenue over expenditures, with funds left over.
What is a limitation/drawback of budgeting?
Circumstances might change and forecasts and predictions cannot be reliable upon, and therefore a budget might be a challenge
3 components of a budget
revenue, expenses, and variance (surplus/deficit)
What is a benchmark?
Allows an organization to measure and compare the degree of budgetary success against the the industry standard
What is a deficit?
The difference when expense costs are higher than revenues.
Danny's six month car insurance premium is $483. He budgets each month to pay the car insurance in equal installments.
What is $80.50 per month?
The expense that protects an Organization/First Nation from damage
Insurance Premium/Fees
What is a limitation (drawback) of budgeting?
Managers may spend whatever budget they have (wastefully) just so they receive (at least) the same budget amount next year.
What is deferred revenue?
When funding is not used in one fiscal year and can be budgeted and used the following fiscal year.