Dietetic Technician Practice Test

From which part of the budget should money for a new dish machine in a retirement home kitchen be allocated?

1. Master budget

2. Operating budget

3. Capital budget

4. Cash budget

The correct answer is: Capital budget

Allocating funds for a new dish machine in a retirement home kitchen should come from the capital budget. The capital budget is specifically designated for long-term investments in physical assets like equipment, buildings, or renovations. Since purchasing a dish machine typically involves a significant expenditure and is intended to provide long-term benefits to the kitchen operations, it is classified as a capital expense. The capital budget allows organizations to plan for these larger purchases and manage spending over multiple years, ensuring that they can afford such investments without disrupting day-to-day operational expenses. In contrast, the other types of budgets—like the operating budget, which focuses on day-to-day expenses; the master budget, an overall comprehensive financial plan; and the cash budget, which deals with cash flow management—do not specifically handle significant capital expenditures.