Test Chapter 7_Budgeting

Question 1

The budget which shows the money to be spent to build and equip a new hospital is known as the ______ budget.

Answer 1

Capital

Question 2

A significant characteristic of the program budget is that it lends itself to review and analysis. Why?

Answer 2

The budget includes measurable objectives.

Question 3

The advantages of program budgeting over line item and performance budgeting is:
I. Tight administrative control
II. Forces the administrator to think through his total operation’
III. Measurable objectives
IV. Simplicity of development
V. Closer estimates of future costs

Answer 3

II, III, V

Question 4

Of the following considerations, the one which is LEAST important in preparing a department budget request is the

Answer 4

amounts in previous budget requests

Question 5

The type of budget which provides the MOST flexibility in the use of appropriate funds is the ____ budget.

Answer 5

program

Question 6

A WEAKNESS of many budgetary systems today is that they

Answer 6

are subjectively determined by those most directly involved

Question 7

Standards on which budgets are developed should be based PRIMARILY on

Answer 7

analytical studies

Question 8

The income, cost, and expense goals making up a budget are aimed at achieving a predetermined objective but do not necessarily measure the lowest possible costs. This is PRIMARILY because

Answer 8

the level of expenditures provided for in a budget by budget committees is frequently an arbitrary rather than a scientifically determined amount

Question 9

You, as a unit head, have been asked to submit budget estimates of staff, equipment, and supplies in terms of programs for your unit for the coming fiscal year. In addition to their use in planning, such unit budget estimates can be BEST used to

Answer 9

reveal excessive costs in operations

Question 10

Which of the following is the BEST reason for budgeting a new calculating machine for an office?

Answer 10

The machine would save time and money.

Question 11

As an aspect of the managerial function, a budget is BEST described as a

Answer 11

type of management plan expressed in quantitative terms

Question 12

Which of the following is generally accepted as the MAJOR immediate advantage of installing a system of program budgeting?

Answer 12

encourages managers to relate their decisions to the agency’s long-term goals

Question 13

Of the following, the BEST means for assuring necessary responsiveness of a budgetary program to changing conditions is by

Answer 13

reviewing and revising the budget at regular intervals so that it retains its character as a current document

Question 14

According to expert thought in the area of budgeting, participation in the preparation of a government agency’s budget should GENERALLY involve

Answer 14

all levels of the organization

Question 15

Of the following, the MOST useful guide to analysis of budget estimates for the coming fiscal year is a comparison with

Answer 15

appropriations as amended for the current fiscal year

Question 16

Line managers often request more funds for their units than are actually required to attain their current objectives . Which one of the following is the MOST important reason for such inflated budget requests? The

Answer 16

expectation that budget examiners will exercise their prerogative of budget cutting

Question 17

Integrating budgeting with program planning and evaluation in a city agency is GENRALLY considered to be

Answer 17

DESIRABLE; budgeting facilitates the choice-making process by evaluating the financial implications of agency programs and forcing cost comparisons among them

Question 18

In government budgeting, the problem of relating financial transactions to the fiscal year in which they are budgeted is BEST met by

Answer 18

entering expenditures

Question 19

If the agency’s bookkeeping system records income when it is received and expenditures when the money is paid out, this system is USUALLY known as a _____ system.

Answer 19

cash

Question 20

An audit, as the term applies to budget execution, is MOST NEARLY a

Answer 20

check on the legality of expenditures and is based on the appropriations act

Question 21

In government budgeting, there is a procedure known as ALLOTMENT. Of the following statements which relate to allotment, select the one that is MOST generally considered to be correct. Allotment

Answer 21

is designed to prevent waste

Question 22

In government budgeting, the establishment of the schedules of allotments is MOST generally the responsibility of the

Answer 22

budget unit only

Question 23

Of the following statements relating to preparation of an organization’s budget request, which is the MOST generally valid precaution?

Answer 23

Give specific instructions on the format of budget requests and required supporting data.

Question 24

Based on the above budget, which is the MOST valid statement?

Answer 24

Environmental Safety, Air Pollution Protection, and Water Pollution Protection could all be considered program elements.

Question 25

Which of the following is NOT an advantage of a program budget over a line-item budget? A program budget

Answer 25

gives us more control over expenditures than a line-item budget

Question 26

Of the following statements which relate to the budget process in a well-organized government, select the one that is MOST NEARLY correct.

Answer 26

The budget cycle is the step-by-step process which is repeated each and every fiscal year.

Question 27

If a manager were asked what PPBS stands for, he would be right if he said

Answer 27

planning programming and budgeting system

Question 28

The sample budget shown is a simplified example of a ______budget.

Answer 28

performance

Question 29

The budget shown in the sample differs CHIEFLY from line-item and program budgets in that it includes

Answer 29

levels of service

Question 30

Performance budgeting focuses PRIMARYB attention upon which one of the following? The

Answer 30

general character and relative importance of the work to be done or the service to be rendered