Budget Classifications Quiz

Capital budgets deal with the acquisition of variable assets.

Current budgets are concerned with recurring expenditures.

A tentative budget is already an officially approved document.

A general budget is prepared for Special Revenue and Debit Service Funds.

Special budgets are prepared for funds other than General, Special Revenue, and Debit Service Funds.

Fixed budgets refer to planning for acquisitions several years in advance.

In profit-making enterprises, budgeting is usually inflexible and cannot be changed during the year.

Governmental budgets can be easily altered without facing any penalties.

A budget is a plan expressed in non-monetary terms.

Governmental budgeting has a less significant role compared to FP budgeting.

Governments rely on profit motives to guide the resources represented by their budgets.

Governmental budgets can be easily changed throughout the year.

Budgeting is the process of allocating abundant resources to unlimited demands.

The GASB recognizes the importance of the budget process in principle 10 by stating that an annual budget should be adopted by every governmental unit.

The accounting system should not provide the basis for appropriate budgetary control according to the GASB.

Budgetary comparisons should not be included in the appropriate financial statements and schedules for governmental funds according to GASB principle 10.

Budget comprises three major components: estimated revenues, estimated profits, and estimated expenditures.

The primary usefulness of budgets is controlling expenses to minimize profit in both private and government entities.

Incremental budgeting is likely to result in the optimum allocation of resources.

Zero-Based Budgeting (ZBB) assumes that all programs will continue from one year to the next.

Zero-Based Budgeting (ZBB) starts each year with a budget of zero.

Incremental budgeting provides detailed performance information for programs.

Zero-Based Budgeting (ZBB) is a low-cost budgeting approach.

Incremental budgeting considers the effectiveness of government programs in achieving goals.

Performance budgeting focuses on the relation between input and output of each program in an organization.

Planning-Programming-Budgeting (PPB) emphasizes detailed spending rather than broad policy goals.

In PPB, the government's overall program is emphasized over specific departmental programs.

The Ethiopian fiscal year starts from July 7 of this year to July 6 of the coming year.

PPB evaluates only costs of different ways of meeting goals and objectives.

Performance budgeting plans for efficient production of outcomes regardless of resource inputs.