Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What type of budget outlines financial resource allocation for a company?

1. Capital Budget

2. General Operating Budget

3. Project Budget

4. Expense Budget

The correct answer is: General Operating Budget

The general operating budget is designed to outline the financial resource allocation for a company's routine operations. It encompasses all the expected revenues and expenses that will occur over a specified period, typically on an annual basis. This budget serves as a comprehensive plan that guides management in making informed financial decisions regarding day-to-day operations, ensuring that funds are strategically allocated to various departments and activities necessary for the company's functioning. In contrast, the capital budget focuses on long-term investments in assets. This includes expenditures on property, equipment, or improvements that will benefit the company over several years. The project budget is specific to individual projects and is used for tracking expenses and resource allocation tied to that project. An expense budget typically details the anticipated costs within a specific category or department but doesn't cover the full scope of a company's financial operations like the general operating budget does. Each of these other budget types serves a specific function but does not provide the complete overview of financial resource allocation that the general operating budget does.