Question : What is a budget cycle?

 

Option 1: The period of time over which a budget is planned, executed, and evaluated

 

Option 2: The period of time over which a budget is planned and executed

Option 3: The period of time over which a budget is evaluated

 

Option 4: The period of time over which a budget is planned and evaluated

Correct Answer: The period of time over which a budget is planned, executed, and evaluated

Solution : The correct answer is (a) The period of time over which a budget is planned, executed, and evaluated

A budget cycle refers to the period of time over which a budget is planned, executed, and evaluated. It encompasses the various stages involved in the budgeting process, from the initial planning and formulation of the budget to its implementation and eventual assessment of performance.

The budget cycle typically involves several key steps. It begins with the preparation and planning phase, where the budget is drafted based on the government's or organization's goals, priorities, and available resources. This phase may involve consultations, analysis of economic factors, revenue forecasting, and setting expenditure priorities.

After the budget is formulated, it moves into the execution or implementation phase. During this period, the budget is put into action, and the allocated funds are disbursed to various departments, programs, or projects according to the approved budgetary provisions. This phase involves financial management, monitoring of spending, and ensuring compliance with budgetary guidelines.

Finally, the budget cycle includes the evaluation and assessment phase. This stage involves reviewing and analyzing the performance and outcomes of the budget, assessing whether the goals and targets were met, and identifying areas for improvement. The evaluation may consider financial performance, program effectiveness, and overall fiscal health.