Financial Management for Public,
Health, & Not-for-Profit
Organizations, Ch 1-3 Questions
And Answers
Operating budget - Correct Answer ✔✔ - You want to show the Monthly pattern of revenues, support
and expenses resulting in either a surplus or deficit on an accrual basis
Flexible budget - Correct Answer ✔✔ - You want to prepare a budget at three different sensitivity levels
of pricing to see what surplus.loss Might look like at each of those different price levels
Cash budget - Correct Answer ✔✔ - You are interested in deterMining the cash inflows, cash outflows,
and ending balance of cash for each Month
PerforMance budget - Correct Answer ✔✔ - You want to track the organization's perforMance on
several key Metrics that do NOT directly relate to financial perforMance
Zero-based budget - Correct Answer ✔✔ - In order to reduce expenditures and Maintain budgetary
efficiency, you create a budget where all of the last period's line iteMs are set to zero and justifications
(ie: decision packages) Must be Made to fund each of the line iteMs with the desired aMounts
Capital budget - Correct Answer ✔✔ - You prepare this kind of budget in order to deterMine whether to
invest in a long-lived asset which will benefit the organization over a nuMber of years
Special (ad-hoc) budget - Correct Answer ✔✔ - Because it was not part of the Operating Budget, you
prepare this budget when an unforeseen opportunity or probleM arises and requires financial analysis
IncreMental budgeting - Correct Answer ✔✔ - This budgeting technique looks at the revenues and
expenditures in last year's line iteMs and adjusts theM up or down for things like inflation
Health, & Not-for-Profit
Organizations, Ch 1-3 Questions
And Answers
Operating budget - Correct Answer ✔✔ - You want to show the Monthly pattern of revenues, support
and expenses resulting in either a surplus or deficit on an accrual basis
Flexible budget - Correct Answer ✔✔ - You want to prepare a budget at three different sensitivity levels
of pricing to see what surplus.loss Might look like at each of those different price levels
Cash budget - Correct Answer ✔✔ - You are interested in deterMining the cash inflows, cash outflows,
and ending balance of cash for each Month
PerforMance budget - Correct Answer ✔✔ - You want to track the organization's perforMance on
several key Metrics that do NOT directly relate to financial perforMance
Zero-based budget - Correct Answer ✔✔ - In order to reduce expenditures and Maintain budgetary
efficiency, you create a budget where all of the last period's line iteMs are set to zero and justifications
(ie: decision packages) Must be Made to fund each of the line iteMs with the desired aMounts
Capital budget - Correct Answer ✔✔ - You prepare this kind of budget in order to deterMine whether to
invest in a long-lived asset which will benefit the organization over a nuMber of years
Special (ad-hoc) budget - Correct Answer ✔✔ - Because it was not part of the Operating Budget, you
prepare this budget when an unforeseen opportunity or probleM arises and requires financial analysis
IncreMental budgeting - Correct Answer ✔✔ - This budgeting technique looks at the revenues and
expenditures in last year's line iteMs and adjusts theM up or down for things like inflation
