Business FinancesQuestion 314 of 1605
The PRIMARY purpose of preparing a business budget for the upcoming year is to:
a.Satisfy a CSLB licensing requirement
b.Eliminate the need to file income tax returns
c.Guarantee that no job will lose money
d.Plan expected revenue and expenses so the business can manage cash and profit
Explanation
A budget is a financial plan that projects revenue and expenses, allowing the contractor to anticipate cash needs, set goals, and compare actual results against the plan. It does not replace tax filings or guarantee profit.
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- Which of the following would be classified as a DIRECT cost on a specific project's job cost report?
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- A contractor's net profit for the year is $60,000 on total revenue of $750,000. What is the net profit margin?
- A contractor projects $1,000,000 in revenue and budgets overhead at 18% of revenue. How much should be budgeted for overhead?
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- Which financial statement specifically shows how cash moved into and out of the business during a period?
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)