Certified Meeting Professional (CMP) Practice Exam

Which of the following is a step in developing a budget?

1. Identify categories of revenue and expenses

2. Select the event venue

3. Choose the date of the event

4. Sign contracts with vendors

The correct answer is: Identify categories of revenue and expenses

Identifying categories of revenue and expenses is a fundamental step in developing a budget because it lays the groundwork for financial planning. By categorizing expected income sources—such as ticket sales, sponsorships, and grants—and anticipated expenses, like venue rental, catering, and marketing, meeting planners can create a structured financial framework. This structured approach allows for accurate forecasting and ensures that planners can track financial performance against budgeted amounts throughout the event lifecycle. Choosing the event venue, selecting the date, and signing contracts with vendors are essential logistical considerations, but they typically come after the initial budget framework is established. Having a clear understanding of expected revenues and expenditures will inform these choices, guiding planners in making decisions that align with their financial constraints and goals.