30 Questions
What is the primary purpose of a budget in governmental accounting?
To ensure that money is used for the appropriate purpose
How does budgeting differ between profit-seeking enterprises and governments?
Government budgets are generally unchangeable once fixed by law
Why do governments rely on legal requirements to control budget usage?
To ensure that money is not used for the appropriate purpose
What are the consequences of altering or exceeding a government budget?
Severe penalties for the administrator
How does the inflexibility of government budgets impact governmental accounting practices?
Requires the accounting system to support the fixed budget
In profit-seeking enterprises, how does budgeting usually differ from governmental budgeting?
Budgeting is more flexible and can be changed easily
What is the main difference between a fixed budget and a flexible budget?
Fixed budgets are for a fixed total dollar amount, while flexible budgets fix the cost per unit of goods and services.
Which type of budget takes the previous year's budget as a base and adjusts it by adding or subtracting a percentage for the current year?
Incremental budget
What is the second major item in the revenue budget?
External assistance
Under which approach to budgeting is the assumption made that historical budget allocations reflected organizational priorities?
Incremental or object of expenditure approach
How is the recurrent budget, which covers current expenditures, primarily financed?
Through taxation
Which type of budget is more appropriate for governmental goods or services according to the text?
Fixed budget
What does the capital budget primarily cover?
Acquisition of newly produced assets
What are budgets prepared by executive and legislative bodies respectively called?
Executive and legislative budgets
Where does the government get most of its funds for the capital budget?
From external borrowing and grants
In which type of funds are flexible budgets more appropriate?
Enterprise and internal service funds
Which type of loans are used for mostly financing capital projects in Ethiopia?
External loans from multilateral and bilateral creditors
What does the annual period over which budgets are prepared called?
Budget cycle
What is the main focus of budgeting on the expenditure side?
All of the above
How are budget structures defined in the context of government finance?
As formats that organize budget data
What does the revenue budget in Ethiopia typically include?
Ordinary revenue, external assistance, and capital revenue
In the context of the revenue budget, what is 'ordinary revenue' composed of?
Both tax and non-tax revenues
Which of the following is NOT a component of tax revenue according to the text?
External assistance
What is a key feature of the classification of budget data mentioned in the text?
Revenue vs Expenditure classification only
What is the main focus of Performance budgeting?
Relating resource inputs to outputs of each organizational unit
In Planning-Programming-budgeting (PPB), what is evaluated after formulating long-range plans?
Ultimate goals and objectives
Why does PPB consider both the Ministry of Health and the Ministry of Education in its evaluation?
To ensure they have complementary programs
What is the purpose of a government budget?
To plan expenditures and revenues for a specified period
When does the fiscal year start in Ethiopia?
Hamle 1 in Ethiopian calendar
How does PPB differ from Performance budgeting?
PPB evaluates specific departmental budgets, while Performance budgeting looks at overall government programs
Explore the differences between Performance budgeting approach and Planning-Programming-budgeting (PPB). Learn about how Performance budgeting focuses on resource inputs and outputs of organizational units, while PPB emphasizes broad policy goals and long-range plans.
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