Comprehensive Finance & Budgeting Solutions: MCQ and Tasks

This assignment solution covers various aspects of managing finances and budgets, including multiple-choice questions (MCQs) and practical tasks. The MCQs address key concepts such as financial statements, budgeting principles, statutory requirements, and risk management. The tasks involve analyzing financial data, preparing budgets, identifying variances, and recommending improvements. The document provides detailed answers and explanations for each question and task, offering insights into financial analysis, resource allocation, and effective financial management practices. The solutions also cover topics like GST calculations, bilateral trade agreements, and the importance of internal controls. Desklib provides access to this and many other solved assignments for students.

MANAGING FINANCES AND BUDGETS 0
MANAGING FINANCES AND BUDGETS

MANAGING FINANCES AND BUDGETS 1
Table of Contents
MCQ...........................................................................................................................................3
Question 1..................................................................................................................................3
Question 2..................................................................................................................................3
Question 3..................................................................................................................................3
Question 4..................................................................................................................................3
Question 5..................................................................................................................................4
Question 6..................................................................................................................................4
Question 7..................................................................................................................................4
Question 8..................................................................................................................................4
Question 9..................................................................................................................................4
Question 10................................................................................................................................5
Question 11................................................................................................................................5
Question 12................................................................................................................................5
Question 13................................................................................................................................5
Question 14................................................................................................................................6
Question 15................................................................................................................................6
Question 16................................................................................................................................6
Question 17................................................................................................................................6
Question 18................................................................................................................................7
Question 19................................................................................................................................7

MANAGING FINANCES AND BUDGETS 2
Question 20................................................................................................................................7
Question 21................................................................................................................................7
Question 22................................................................................................................................7
Question 23................................................................................................................................8
Question 24................................................................................................................................8
Question 25................................................................................................................................8
Question 26................................................................................................................................8
Question 27................................................................................................................................9
Question 28................................................................................................................................9
Question 29................................................................................................................................9
Question 30................................................................................................................................9
Question 31................................................................................................................................9
Question 32..............................................................................................................................10
Question 33..............................................................................................................................10
Question 34..............................................................................................................................10
Question 35..............................................................................................................................10
Question 36..............................................................................................................................11
Question 37..............................................................................................................................11
Task 2.......................................................................................................................................11
Question 1.............................................................................................................................11
Question 2.............................................................................................................................12

MANAGING FINANCES AND BUDGETS 3
Question 3.............................................................................................................................12
Question 4.............................................................................................................................12
Likely causes of variances....................................................................................................14
Recommendations................................................................................................................14
Flexed Expenses...................................................................................................................16
Non-flexed Expenses............................................................................................................16
Brief summary......................................................................................................................16
References................................................................................................................................17

MANAGING FINANCES AND BUDGETS 4
MCQ
1 A 8 A 15 A
2 D 9 B 16 B
3 A 10 D 17 D
4 C 11 B 18 A
5 B 12 B 19 D
6 B 13 C 20 D
7 C 14 A
Question 1
Balance Sheet
Profit and loss statement
Cash flow statement
Statement of Equity
Question 2
For the purpose of analysing the cost of goods sold, revenue and the expenses the financial
budget is referred (Rose, 2016).
Question 3
The economic health of the market
Stability of the market

MANAGING FINANCES AND BUDGETS 5
Competition in the market
The type of customers and suppliers in the market (Stea and Andresen, 2017).
Question 4
What is the ultimate goal of my company?
What are the needs of my company?
What is the cost of production of goods or services?
Question 5
What is the cash flow from the ordinary activities?
What is the cash flow from the investing activities?
What is the cash flow from the financial activities?
Question 6
Corporation Act, 2001
Taxation Administration Act, 1996
Payroll Tax Act, 1971
Workplace Gender Equality Act, 1971 (Hillson and Murray-Webster, 2017).
Question 7
The employer must pay a minimum 9.5% of superannuation to comply with statutory
requirements of the company.

MANAGING FINANCES AND BUDGETS 6
Question 8
The employer must refer to the accounts department for the compliance about the FBT, CGT
and GST requirements (Stea and Andresen, 2017).
Question 9
It is a digital record keeping software that is used for maintenance of accounts for the
company. Such type of software is used in providing a brief analysis of the company. Rosner,
Hendrickson and Willett, 2015
Question 10
Bottle
s Basic GST
total
amount
12 11929
3459.4
1 8470
11929.5774
6
The GST amount is 3459.41
Question 11
Revenue 882200
GST 80200 9.09090

MANAGING FINANCES AND BUDGETS 7
9
total
Revenue 802000
Expenses 23560
Wages and
interest
56640
721800
GST
Liability
65618.1
8
Question 12
A bilateral trade is an agreement between the countries which is made with an intention to
promote trade between the countries by reducing the export and import tax production
between the countries (Ren, Qiu, Wang and Lin, 2016).
Question 13
Incoterms is the name of the group
Question 14
The financial data by the software used by the company must be safe and secured.
The user interface of the software must be simple to operate.
The manager of the organisation must go through all the hidden costs that are mentioned in
the software.

MANAGING FINANCES AND BUDGETS 8
The manager of the organisation must go through about the after-sale services provided by
the company (Subramanian, Gunasekaran and Gao, 2016 ).
Question 15
Is the rate of financial software being according to the budget made by the company?
Is there are any hidden costs of the company?
Does the software provide a high security of the data?
Is the user interface of the software being feasible to operate or not?
Question 16
The goals of the company
A brief review about the available resources the company possess
By defining the fixed cost and variable cost of the company
By defining the cost of production of the company (Shkurkin, Sogacheva, Logvencheva and
Khramova, 2016).
Question 17
A sales budget is an estimate which is used in the calculation of profits for the company. The
budget is a difference between the cost of production and the cost used for selling the
product.

MANAGING FINANCES AND BUDGETS 9
Question 18
It is basically a summary of expected incomes and expenses of the company which can be
used as method of effective planning for the company.
Question 19
The following are the four reasons which are important for maintain a record of resource
allocation:
For the purpose of effective communication in the company
For the purpose of forming and implementing the decision-making process of the company
For the purpose of meeting the organisation goals of the company
For the purpose of meeting the quality needs of the company.
Question 20
By identifying the total number of resources of the company
By identifying the functions of resources of the company
By identify the timing schedule of the company (Wang, and Huang, 2017).
By using various tools which helps in identifying the allocation of resources of the company
Question 21
The areas of the budget which are likely to affect are the salaries, research and the
development and the training.

MANAGING FINANCES AND BUDGETS 10
Question 22
It is important to circulate the budgets to the other managers and the supervisors so that a
different perspective can help the organisation find out the new variances which the
preparatory people of the budget forget to make.
Question 23
The cyber risk of data security
Geopolitical risk
IT failure
Frauds
Question 24
Five ways to prevent the misappropriation of funds at the workplace are
Instead of using the normal orders, the purchase orders shall be taken into consideration
Control cash receipts to manage the cash easily
With the assistance of the informal audits on irregular intervals the misappropriation can be
controlled.
To keep a track on the business and to perform and manage the inventory and the security
system is the best step (Rahimi and Kozak, 2017).
Install the security measures through the digital medium to track the unwanted transactions.

MANAGING FINANCES AND BUDGETS 11
Question 25
It is basically a positive difference between the budgeted expenses and the actual expenses
otherwise it will count for unfavourable.
Question 26
a) Favourable as the expense are low and profit would increase
b) If the profit is below then unfavourable otherwise favourable because actual budget shall
cater profits
c) Unfavourable as the fixed costs would occur despite the sales volume
d) Unfavourable as it will increase the expense cost
Question 27
The review if the cash flow statements is necessary to get an idea of the payment of things
which enables the business to run. The monitoring of the expenses such as the raw materials,
employees, rent, and other operating expenses need a supervision to cater the variances that
can affect the performance of the business (Wang, and Huang, 2017).
Question 28
The two operational issues due to which there is a requirement of the contingency plan are
when the payroll clerk suddenly quits in the organisation and when the key suppliers go out
of the business and the company loses the major vendors.

MANAGING FINANCES AND BUDGETS 12
Question 29
The budgeted variable cost is $60000 and the actual variance cost is $50000, the discrepancy
is due to the company managed to buy at the cheaper rates and used it more efficiently. To
analyse the same the company needs to check the purchases bought (Stea and Andresen,
2017).
Question 30
Four principles to follow to ensure the accurate and the reliable audit trail are
Internal audit
External Audit
Segregate the tasks
Communicate to the top level department.
Question 31
Due diligence is a practice or an audit carried out in order to watch the potential investment
or the product to confirm the facts and figures with the assistance of the financial records,
plans and the reasonable care a person shall undertake before entering into an agreement with
the other party (Rosner, Hendrickson and Willett, 2015).
Question 32
The four qualities that are needed to demonstrate the financial probity are
The knowledge of the organisation’s needs shall be well versed

MANAGING FINANCES AND BUDGETS 13
The qualification if the personnel shall fit with the requirements
The ability to develop the trust factor within the organisation
Impartial and the fairness is also one of the qualities.
Question 33
Income statement
Balance sheet
Statement of Cash flows
Daily financial Report
Retained Earnings and owner’s Equity statement
Question 34
The financial report includes the external financial statements such as income statement,
balance sheet, statement of the comprehensive income, statement of the cash flows and the
statement of the shareholder’s equity. In my response the diagrams reflect a better perspective
yet the diagrammatic presentation of these statements is not possible as it carry of factors.
Henceforth, it shall be avoided (Ren, Qiu, Wang and Lin, 2016).
Question 35
For prioritising the significant issues the three steps are
Record the issue which is of the relevant nature

MANAGING FINANCES AND BUDGETS 14
Segregate it into the proper heads of the financial statements
Communicate the issue to the management along with the previous results.
Question 36
The recommendations that can be given to the senior management are as follows
Short term business loans are approved warily in comparison to the long term loans and
therefore the company shall focus on these loans as they total cost of capital can be less
expensive in such a case.
A small business line of credit might be better option than a short term loan and dose not
required the large cash amount in a go but provides the bolster for future unseen events (Ren,
Qiu, Wang and Lin, 2016).
Question 37
The characteristics of an effective financial management is when the internal controls are
implemented in a better manner, when the company are complying with the regulatory
requirements, when the company has made the financial statements in a proper manner and in
accordance with the accounting policies (Luxton, Reid and Mavondo, 2015).
Task 2
Question 1
Particulars
Maximu
m Expected

MANAGING FINANCES AND BUDGETS 15
Budgeted nights booked 10950 8760
Tariff Revenues 1314000 1051200
Less variable
costs
Room servicing labour 219000 175200
Room servicing supplies 54750 43800
Gross profit 1040250 832200
Less fixed costs
Admin/reception salaries 180000 144000
Grounds and maintenance salaries 100000 80000
General manager salary 85000 85000
Utilities 90000 90000
Depreciation 140000 140000
595000 539000
Net profit before tax 445250 293200
Less tax 30% 133575 87960
Net profit after
tax 311675 205240
Question 2
Reviewing the previous financial data assists in the preparation of the budget helps to gain an
understanding of the previous years and it also helps to analyse the variances if any the
comparative performance can also be analysed.

MANAGING FINANCES AND BUDGETS 16
Question 3
Yes in preparation of the budgets apart from the makers of the budget the top level
management and the head of the different departments shall be involved so that they can give
a clear picture of their respective department and the amount of the budget required for each
department individually.
Question 4
The four types of information required to share are the financial statements, the sustainability
policies that the managers and the supervisors are required to comply with and to also to
comply with the accounting policies (Luxton, Reid and Mavondo, 2015).
TAS
K 2
Particulars BUDG
ETED
ACT
UAL
VARI
ANCE
%
VARI
ANCE
FAVOURABLE/
UNFAVOURABLE
Budgeted nights
booked 8760 7665 1095 13% Favourable
Tariff
Revenues
105120
0
9198
00 131400 13% Favourable
Less variable
costs
Room servicing
labour 175200
1609
65 14235 8% Favourable
Room servicing
supplies 43800
4139
1 2409 6% Favourable

MANAGING FINANCES AND BUDGETS 17
Gross profit 832200
7174
44 114756 14% Favourable
Less fixed
costs
Admin/reception
salaries 180000
1890
00 -9000 -5% Unfavourable
Grounds and
maintenance salaries 100000
1050
00 -5000 -5% Unfavourable
General manager
salary 85000
8750
0 -2500 -3% Unfavourable
Utilities 90000
8600
0 4000 4% Favourable
Depreciation 140000
1400
00 0 0% Favourable
595000
6075
00 -12500 -2% Unfavourable
Net profit before
tax 237200
1099
44 127256 54% Favourable
Less tax 30% 71160
3298
3.2
38176.
8 54% Favourable
Net profit
after tax 166040
7696
0.8
89079.
2 54% Favourable

MANAGING FINANCES AND BUDGETS 18
Likely causes of variances
The major cause of the variance are due to the number of bookings of the room are low.
Majorly the fixed costs have increased from the budgeted plan to the actual plan. The admin
and the reception salaries have been increased from 180000 to 189000 due to new members
in the staff are hired. Moreover the ground and the maintenance salaries have also been
increased either due to any construction of a new room or due to repair of some machinery or
any room. The biggest point is still the revenue which falls down by 131400 dollars and in
terms of the percentage by 13%. Therefore, these are the major areas because of which the
variances have occurred.
Recommendations
Cross train the staff: the staff shall be cross trained to handle the different activities so that
they are available for different departments when one or two existing staff is already absent.
Day to Day variations: There should not be any fixed schedule for the hourly employees and
the overstaffing profits are wasted and therefore the labour standard shall be formed and
scheduled and for each position in the hotel (Luxton, Reid and Mavondo, 2015)..
Utilities: Utilities normally account for 6% of the operating costs. So the expenses of the
lighting can be solved using the LED lights which consume 75% less energy as compared to
the normal lights.
Particulars Bu
dge
ted
pri
ce
per
BUD
GET
ED
AC
TU
AL
VAR
IAN
CE
%
VAR
IAN
CE
Fle
xib
le
Bu
dg
VAR
IAN
CE
%
VAR
IAN
CE
FAVOURABL
E/
UNFAVOURA
BLE

MANAGING FINANCES AND BUDGETS 19
uni
t
et
Budgeted nights
booked 8760
766
5 1095 13%
Tariff
Revenues 120
1051
200
919
800
1314
00 13%
91
98
00 0 0% Unfavourable
Less
variable
costs
Room servicing
labour 20
1752
00
160
965
1423
5 8%
15
33
00
-
7665 -5% Favourable
Room servicing
supplies 5
4380
0
413
91 2409 6%
38
32
5
-
3066 -8% Favourable
Gross
profit
8322
00
717
444
1147
56 14%
72
81
75
1073
1 1%
Less fixed
costs
Admin/
reception
salaries
20.
5
1800
00
189
000
-
9000 -5%
15
75
00
-
3150
0 -20% Favourable
Grounds and
maintenance
11. 1000 105 - -5% 87
50
-
1750
-20% Favourable

MANAGING FINANCES AND BUDGETS 20
salaries 4 00 000 5000 0 0
General
manager salary 9.7
8500
0
875
00
-
2500 -3%
74
37
5
-
1312
5 -18% Favourable
Utilities
10.
3
9000
0
860
00 4000 4%
78
75
0
-
7250 -9% Favourable
Depreciatio
n
16.
0
1400
00
140
000 0 0%
12
25
00
-
1750
0 -14% Favourable
5950
00
607
500
-
1250
0 -2%
52
06
25
-
8687
5 -17%
Net profit
before tax
2372
00
109
944
1272
56 54%
20
75
50
9760
6 47%
Less tax
30%
7116
0
329
83.
2
3817
6.8 54%
62
26
5
2928
1.8 47% Favourable
Net profit
after tax
1660
40
769
60.
8
8907
9.2 54%
14
52
85
6832
4.2 47%
Flexed Expenses
Room servicing labour

MANAGING FINANCES AND BUDGETS 21
Room servicing supplies
Non-flexed Expenses
Depreciation
Admin Salary
General Manager Salary
Brief summary
The flexible budget prepared would actually allow the companies to roll back to their
performances and this way the managers can easily find out the flex and the non-flex
expenses that can be either increased or decreased accordingly. Moreover the budgets help to
segregate the costs and improve the areas which needs more help than the potential ones.
Task 1
Question 1
Actual
cost
Super9.5
%
payrol
l Tax
2%
Safe
Work
1%
Total
cost of
labour
Room servicing labour 160965 15291.675 3219.3
1609.6
5 181086
Admin/reception salaries 189000 17955 3780 1890 212625
Grounds and maintenance salaries 105000 9975 2100 1050 118125
General manager salary 87500 8312.5 1750 875 98438

MANAGING FINANCES AND BUDGETS 22
The calculation has been arrived after the calculating the specified rates of the super
annuation, payroll tax and safe work on the actual cost and thereafter the sum total of all the
costs are taken to determine the total labour cost.
Question 2
Numb
er of
staff
Gros
s pay
Per
annu
m
Gross
pay
per
month
PAYG
Deducti
on
Take
home
pay
pp/pm
Total
month
ly net
pay to
staff
Total
month
ly
PAYG
payabl
e to
ATO
Admin/reception salaries 3
6000
0 15000 4508.08
10191.
92
10491.
92
10491.
92
Grounds and maintenance
salaries 2
5000
0
8333.3
3 2041.42
6125.2
4
6291.9
1
6291.9
1
General manager salary 1
8500
0
7083.3
3 1597.67
5343.9
9
5485.6
6
5485.6
6
Monthly total $
30416.
66 8147.17
21661.
15
22269.
49
22269.
49

MANAGING FINANCES AND BUDGETS 23
Task 2
Particulars ACTUAL
Budgeted nights booked 7665
Tariff Revenues 919800
Less variable
costs
Room servicing labour 160965
Room servicing supplies 41391
Gross profit 717444
Less fixed costs
Admin/reception salaries 189000
Grounds and maintenance salaries 105000
General manager salary 87500
Utilities 86000
Depreciation 140000
607500
Net profit before tax 109944
Less tax 30% 32983.2
Net profit after
tax 76960.8
GST
COLLECTED 91980
GST PAID 27850

MANAGING FINANCES AND BUDGETS 24
GST
LAIBILITY 64130
The GST amount has been calculated using the rates specified in the question on the tariff
revenues at the rate of the 10%. The GST paid is calculated on the basis of the expenses
except the depreciation, and admin salaries. The GST liability is calculated as the difference
of the two.
Impact of GST
GST also known as the goods and the services tax is the tax that is implemented on the goods
and the services which needs to be paid to the government. This is the single tax for the entire
organisation which helps not only to remove the cascading effect but also helps to remove the
concept of the double tax. Earlier there were several other taxes which the customer was
required to pay but now with the introduction of the GST, it enhances the profitability of the
organisation and also reduces the taxation amount on the business. The amount of tax paid by
the customers will show the transparency among the expense and the income Cassidy, J. and
(Cheng, 2017). From the above analysis it can be observed that the GST liability is calculated
in the form of the GST collected and GST paid. Not only it improves the profitability it also
revamps the cash flows by segregating the activities and assigning the individual amount of
the tax to each activity.

MANAGING FINANCES AND BUDGETS 25
References
Cassidy, J. and Cheng, A., (2017) Legislative Responses to GST Tax Avoidance in Australia
and New Zealand: Lessons for China?. In 2017 International Conference of Chinese Tax and
Policy: The Function of Tax in the New Wave of Economic Development in China.
Hillson, D. and Murray-Webster, R., (2017) Understanding and managing risk attitude.
California: Routledge.
Klychova, G.S., Faskhutdinova, М.S. and Sadrieva, E.R., (2014) Budget efficiency for cost
control purposes in management accounting system. Mediterranean journal of social
sciences, 5(24), p.79.
Luxton, S., Reid, M. and Mavondo, F., (2015) Integrated marketing communication
capability and brand performance. Journal of Advertising, 44(1), pp.37-46.
Rahimi, R. and Kozak, M., (2017) Impact of customer relationship management on customer
satisfaction: The case of a budget hotel chain. Journal of Travel & Tourism Marketing, 34(1),
pp.40-51.
Ren, L., Qiu, H., Wang, P. and Lin, P.M., (2016) Exploring customer experience with budget
hotels: Dimensionality and satisfaction. International Journal of Hospitality
Management, 52, pp.13-23.
Rose, S., (2016) Australia loosens grip on third spot in world super rankings. Investment
Magazine, (133), p.24.
Rosner, B., Hendrickson, S. and Willett, W., (2015) Optimal allocation of resources in a
biomarker setting. Statistics in medicine, 34(2), pp.297-306.

MANAGING FINANCES AND BUDGETS 26
Shkurkin, D.V., Sogacheva, O.V., Logvencheva, E.S. and Khramova, M.N., (2016)
Modernization of the sphere of tourist and hospitality industry of the south of Russia as a
growth factor of socio-economic stability of the region. International Journal of Economics
and Financial Issues, 6(1S), pp.101-106.
Stea, V. and Andresen, J., (2017) The Fixed Budget: Outdated or Underrated?: How Swedish
Privately Owned Companies Perceive The Fixed Budget And How It Is Used New York:
Springer
Subramanian, N., Gunasekaran, A. and Gao, Y., (2016) Innovative service satisfaction and
customer promotion behaviour in the Chinese budget hotel: an empirical study. International
Journal of Production Economics, 171, pp.201-210.
Wang, J. and Huang, X., (2017) August. Routing school bus for better student learning.
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