29 Questions
What is a budget?
A plan expressed in monetary terms, covering a specific period, usually one year.
What information should a budget plan contain?
Types and amounts of proposed expenditures, purposes for which they are to be made, and proposed means of financing them.
What is the difference between budgeting in profit-seeking enterprises and governmental budgeting?
Budgeting in profit-making enterprises is usually flexible and can be changed, while governmental budgets are generally unchangeable without much effort.
Why do governments have unchangeable budgets once fixed by law?
To ensure money is used for the appropriate purpose and to avoid penalties for non-compliance.
What is the role of budgeting in governmental accounting compared to FP accounting?
Budgeting has a greater role in governmental accounting than in FP accounting.
Why is the accounting system designed to support the budget in government?
To align with the unchanging nature of government budgets and to ensure compliance with legal requirements.
What is the main characteristic of incremental budgeting?
Budget for each period is based on the budget for the previous period, adjusting for expected changes.
Why is incremental budgeting considered unlikely to result in the optimum allocation of resources?
It tends to perpetuate inefficient and unnecessary practices, leading to unnecessary expenditure built into the budget.
What is the main idea behind Zero-Based Budgeting (ZBB)?
Each program must justify its existence every year, starting from zero.
How does ZBB differ from incremental budgeting in terms of justifying programs?
ZBB requires programs to justify their existence every year, while incremental budgeting assumes continuity from the previous year.
What does ZBB focus on when evaluating programs and services?
ZBB focuses on evaluating different ways of carrying out programs and choosing the best approach.
Why is ZBB considered a method of continually evaluating programs?
ZBB requires each program to be justified annually, ensuring ongoing assessment of its necessity.
What are the major sources of non-tax revenues in Ethiopia?
Charges and fees, investment revenue, miscellaneous revenue
What is the second major item in the revenue budget of Ethiopia?
External assistance
How are recurrent expenditures in Ethiopia primarily financed?
By taxation, broadly from domestic revenue sources
What does the capital budget in Ethiopia cover?
Acquisition of newly produced assets in the economy
What is the annual period over which budgets are prepared called?
Budget cycle
Who approves the annual budget in Ethiopia?
The Council of Peoples Representatives
What is the first step in the typical budget cycle as described in the text?
Preparation of the macro-economic and fiscal framework
What is the final step in the typical budget cycle as outlined in the text?
Allotment
Which stage involves the allocation of the expenditure budget between Federal and Regional governments?
Allocation of expenditure budget between Federal and Regional governments
What is the role of MOFED in the budget process?
Budget review by MOFED
When is the budget finally submitted to the Council of Peoples‟ Representatives?
Submission of the budget to the Council of Peoples‟ Representatives
What is the main focus of performance budgeting?
The relation between input and output of each organizational unit
Describe the emphasis of Planning-Programming-Budgeting (PPB) approach.
Broad policy goals, strategies, and objectives
What does the government budget in Ethiopia represent?
A plan/forecast of expenditures and revenues for a specified period
When does the fiscal year in Ethiopia start and end?
From July 7 of one year to July 6 of the next year
How does PPB evaluate different ways of meeting goals and objectives?
By analyzing costs and benefits
Give an example of how PPB looks at government programs.
Ministry of Health and Ministry of Education's AIDS programs
Learn about the performance budgeting approach which relates resource inputs to the efficient production of outputs, and the Planning-Programming-Budgeting (PPB) approach which focuses on broad policy goals and long-range plans.
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