Question : The process of preparing a budget that covers multiple years is known as:
Option 1: Long-term budgeting
Option 2: Multi-year budgeting
Option 3: Biennial budgeting
Option 4: None of the above
Correct Answer: Multi-year budgeting
Solution : The correct answer is (b) Multi-year budgeting.
Multi-year budgeting is the process of preparing a budget that covers multiple years, typically beyond the traditional annual budgeting cycle. This approach allows governments and organizations to plan and allocate resources for a longer period, often spanning three to five years or more. Multi-year budgeting helps improve long-term planning, provides stability and predictability, and allows for better assessment of the financial implications of policies and projects over an extended period.
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