DECA Hospitality Services Team Decision Making Practice Exam

How does the finance function relate to company spending?

1. It delegates responsibility for spending

2. It plans and controls spending

3. It generates revenue

4. It reduces operational costs

The correct answer is: It plans and controls spending

The finance function is critical in an organization as it plays a vital role in planning and controlling spending. This encompasses the development of budgetary frameworks that dictate how much funding is allocated to various departments and initiatives. By assessing past expenditures and forecasting future spending needs, the finance function ensures that the company operates within its financial means, maintains financial health, and meets strategic objectives. Additionally, it involves monitoring and analyzing spending patterns to make informed recommendations for adjustments, thereby aiding in efficient resource allocation. This careful planning and control help to prevent overspending or underutilization of resources, ensuring that the company's financial resources are used effectively for growth and sustainability.