American Institute of Certified Planners (AICP) Practice Exam

What type of budget would cover routine maintenance expenses?

1. Capital budget

2. Operating budget

3. Project budget

4. Revenue budget

The correct answer is: Operating budget

The operating budget is designed to cover the day-to-day expenses of an organization, which includes routine maintenance costs. This budget encompasses all the expenses necessary to maintain the operations of a project or organization, such as utilities, salaries, and regular maintenance of facilities and equipment. In contrast, a capital budget focuses on long-term investments, such as the purchase of land, buildings, or major infrastructure projects. It typically does not handle ongoing operational costs. The project budget is usually aligned with specific projects, detailing costs associated with project completion, rather than everyday operational expenses. The revenue budget estimates the incoming funds, which does not directly relate to the expenses required for routine maintenance. The operating budget specifically accounts for the necessary expenditures that keep an organization functioning smoothly on a daily basis, making it the appropriate choice for covering routine maintenance expenses.