EDUC 648 QUIZ 6: SCHOOL-BASED FINANCE AND
BUDGET ISSUES | QUESTIONS AND ANSWERS | 2026
UPDATE | VERIFIED 100% CORRECT
# EDUC 648: SCHOOL-BASED FINANCE AND BUDGET ISSUES
### PRACTICE EXAM (2026 UPDATE)
**Instructions:** Choose the best answer for each multiple-
choice question. Each question is followed by a detailed rationale
explaining the correct choice.
---
### SECTION I: MULTIPLE CHOICE QUESTIONS
**1. A school principal is developing the annual site-based
budget. The district has mandated a 5% reduction in discretionary
spending. Which of the following budget strategies would be the
MOST equitable and least harmful to student outcomes?**
- A) Eliminating all elective courses (e.g., art, music, and physical
education).
- B) Implementing a hiring freeze for all classified staff positions.
- C) Conducting a zero-based budgeting review to identify and cut
low-impact programs.
, - D) Increasing class sizes across all grade levels to save on teacher
salaries.
---
**Correct Answer: C**
**Rationale:** Zero-based budgeting requires principals to justify
every expense from the ground up, rather than basing the new
budget on the previous year's figures. This allows the principal to
identify specific programs or resources that have shown low
impact on student achievement data and cut those specifically.
Options A and D are regressive and harm the whole student body
or the arts. Option B (hiring freeze) may save money but often
impacts critical support staff (paraprofessionals, custodians) and
does not specifically target low-impact areas, potentially harming
operations.
---
**2. In the context of school-based finance, "Encumbrance
Accounting" is crucial for a principal because it:**
- A) Allows the school to transfer funds from the general fund to
the capital projects fund without board approval.
BUDGET ISSUES | QUESTIONS AND ANSWERS | 2026
UPDATE | VERIFIED 100% CORRECT
# EDUC 648: SCHOOL-BASED FINANCE AND BUDGET ISSUES
### PRACTICE EXAM (2026 UPDATE)
**Instructions:** Choose the best answer for each multiple-
choice question. Each question is followed by a detailed rationale
explaining the correct choice.
---
### SECTION I: MULTIPLE CHOICE QUESTIONS
**1. A school principal is developing the annual site-based
budget. The district has mandated a 5% reduction in discretionary
spending. Which of the following budget strategies would be the
MOST equitable and least harmful to student outcomes?**
- A) Eliminating all elective courses (e.g., art, music, and physical
education).
- B) Implementing a hiring freeze for all classified staff positions.
- C) Conducting a zero-based budgeting review to identify and cut
low-impact programs.
, - D) Increasing class sizes across all grade levels to save on teacher
salaries.
---
**Correct Answer: C**
**Rationale:** Zero-based budgeting requires principals to justify
every expense from the ground up, rather than basing the new
budget on the previous year's figures. This allows the principal to
identify specific programs or resources that have shown low
impact on student achievement data and cut those specifically.
Options A and D are regressive and harm the whole student body
or the arts. Option B (hiring freeze) may save money but often
impacts critical support staff (paraprofessionals, custodians) and
does not specifically target low-impact areas, potentially harming
operations.
---
**2. In the context of school-based finance, "Encumbrance
Accounting" is crucial for a principal because it:**
- A) Allows the school to transfer funds from the general fund to
the capital projects fund without board approval.
