Certified Meeting Professional (CMP) Practice Exam

What is typically included in a chart of accounts within a budget?

1. Projected future income

2. Actual costs and revenues

3. Standard operating procedures

4. All cash and credit transactions

The correct answer is: Actual costs and revenues

A chart of accounts is a systematic listing of all account names and numbers used by an organization to organize financial transactions. Within a budget, it serves an essential role in tracking the financial performance of projects or the organization as a whole. The inclusion of actual costs and revenues is critical because it provides a clear snapshot of financial performance. This allows for effective monitoring of how closely the entity is adhering to its budgetary goals. By recording actual figures, organizations can analyze variances, which is essential for identifying areas where overspending or underspending occurs. Projected future income is valuable for forecasting but does not typically represent what is currently being accounted for within the chart of accounts. Standard operating procedures are related to the practices and guidelines for operations rather than financial accounts and transactions. All cash and credit transactions give a broader view of financial activities but do not specifically emphasize the distinction between what was budgeted versus what was actually incurred during the accounting period. Hence, while both future income and total transactions are important, they do not fulfill the primary function of reflecting actual performance as effectively as actual costs and revenues do.