Certification in Supplier Diversity Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Certification in Supplier Diversity Exam. Utilize flashcards and multiple choice questions with detailed hints and explanations. Ensure your success with comprehensive study resources!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the primary function of a budget?

To increase revenue
To anticipate and control expenditure
To adjust prices of services
To forecast sales numbers

The correct answer is: To anticipate and control expenditure

The primary function of a budget is to anticipate and control expenditure. A budget serves as a financial plan that outlines expected income and expenditures over a specified period. By detailing anticipated expenses, a budget allows organizations to allocate resources effectively and identify potential financial shortfalls before they occur. This proactive approach helps in managing cash flow and ensures that funds are allocated to cover essential expenses, investments, and operational costs. In addition to this, a budget facilitates decision-making by providing a framework for evaluating spending. Organizations can compare actual spending against the budgeted figures to identify variances and make necessary adjustments to align with financial goals. This process enhances financial discipline and accountability, contributing to the overall sustainability of the business. While increasing revenue, adjusting prices, and forecasting sales numbers are important financial considerations, they are not the primary focus of a budget. A budget inherently provides a foundation upon which revenue-generating strategies can be built, but its central role lies in managing and controlling expenditures effectively.