SITXFIN003 Manage Finances within a Budget
Learner Assessment Pack
Q1. 8 kinds of financial records include the following:
Tax invoices and related tax records
Details of every contract
Cash book records
General account books
Q2. All registered companies operating in Australia must file Business Activity Statements (BAS). Accordingly, BAS contains various tax details which entail luxury car tax (LCT), wine equalization Tax (WET), fringe benefits tax (FBT), pay as you go installments (PAYGI), pay as you go withholding (PAYGW) and goods and services tax (GST).
Cash flow budget A summarized presentation of how cash flows in and out of a business at a specific duration
Capital expenditure budget Capital expenditure budget express long-term capital requirements and purchase approach for an organization
Sales budget Presents attainable or anticipated sales over a particular period
Procedures that should be followed when collecting data to inform budgets Engaging other employees to determine needs and adjustments in revenues and expenditure priorities
Actual collection of vital ideas and data from different cost centers
Developing and presenting a draft budget to encourage feedback from concerned persons
Discussing with relevant persons and informing them about resource allocation strategies
Finalizing the budget by informing colleagues on eventual decisions
Wage budget is a projected expenditure that an organization would utilize to pay hourly employees.
Purchasing budgets are projections on the type, quantity and costs of inventory that a firm needs to acquire during a given duration.
Events budgets are forecasts on expenditures and income that an organization would realize while handling specific events.
Project budgets are estimations of expenditures for acquiring necessary resources and accomplishing relevant processes to attain particular goals and objectives while handling specific projects over specified periods.
Cashflow Cash flow is the net value of money that move in and out of a business at a given period
Occupancy Rate Occupancy rate is a KPIS which shows the ratio of used or rented business space to the total size of available space over a period of time
Sales Performance Sales performance is the evaluation of actual sales against projected sales goals during a particular period
Variance in income/expenditure This is the difference in projected and actual income/expenditure that a business realizes while handling a given activity
Expenditure Expenditure is the value of money that is spent to accomplish a given business activity
Cover Cover is the amount of resources available to ensure effective operation of a business over a given duration
Stock levels Stock levels are available quantities of raw materials that a business keeps
Wastage Wastage is the value of loss that a business realizes through unfavorable acts such as inefficiencies, destruction, expiry or decay of resources/ raw materials
Q6. The main reason for preparing a draft budget is to gain rough and informative details that would inform proper development of a final budget. Accordingly, draft budgets attract varied benefits such as disclosure of previously unconsidered or hidden elements and provide a basis for refining initial plans to ensure development of an effective final budget.
Q7. When analyzing budget results, projected expenditure and income should be compared with actual income and expenditure.
Q8. 3 things to include in a budget report entail the following:
Net worth of the business
Q9. Components of an operating budget include
Variance Variance is the difference between projected and actual revenue or expenditure
Projected/forecasted figure This is the desired and expected value
Actual figure Actual figure is the eventual outcome upon execution of a business activity
Budgeted figure Budgeted figure is the figure that a business plans to achieve using available resources
Q11. It is essential for staff to understand a budget and related targets to remain focused and motivated towards realizing goals and objectives of their firm. Informed workers would understand the importance of prioritizing certain processes while striving to improve their competence and skills for better performance and efficiency by comparing actual versus projected outcomes.
Q12. It is essential to critically analyze income and expenditure when reviewing and updating a budget. For instance, actual expenditure used in preparing hotel rooms should be compared with budgeted expenditure to determine if there is variance. Moreover, actual income from the sale of food and beverages could be compared with sales budget.