Examination Practice Questions And

Illinois Public Budget Analyst Certification Examination Practice Questions And Correct Answers (Verified Answers) Plus Rationales 2026 Q&A | Instant Download Pdf

• What is the primary purpose of a public budget in governmental

entities?

• To maximize profits
• To reduce all government expenses
• To plan, allocate, and control public resources
• To compete with private companies

Answer: C

Rationale: Public budgets exist to plan resource use, allocate funds

strategically, and maintain fiscal control.

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• Which budgeting method bases allocations on last year’s expenditures?
• Zero-based budgeting
• Program budgeting
• Incremental budgeting
• Performance budgeting

Rationale: Incremental budgeting updates the previous year’s budget with

increases or decreases.

3. Zero-based budgeting requires agencies to:

• Automatically receive the same funds as last year
• Justify all expenditures from the ground up
• Spend all funds before the fiscal year ends
• Follow performance targets only

Rationale: Zero-based budgeting requires justification starting from a

“zero” baseline.

• Which fund is typically used for day-to-day operating expenses?
• Capital projects fund
• Debt service fund
• General fund
• Enterprise fund 2 / 4

Rationale: The general fund finances routine operations and basic

government services.

5. A capital budget generally includes:

• Employee salaries
• Long-term investments in infrastructure
• Travel allowances
• Small-dollar administrative expenses

Rationale: Capital budgets focus on long-term assets and infrastructure

investments.

• Which financial document forecasts revenues and expenditures for

multiple years?

• Cash flow statement
• Multi-year financial plan
• Trial balance
• Position control report

Rationale: Multi-year plans project future capacity and obligations beyond

one fiscal year.

• In governmental budgeting, an appropriation is: 3 / 4

• Money spent
• Legal authorization to spend funds
• Money collected
• An internal memo

Rationale: Appropriations legally allow government entities to spend

designated funds.

8. A budget variance occurs when:

• Revenues exceed expenditures
• Actual results differ from budgeted amounts
• The budget is approved
• No funds are used

Rationale: Variances measure the difference between planned and actual

financial performance.

9. Performance budgeting focuses primarily on:

• Historical expenses
• Outputs and outcomes of programs
• Political priorities only
• Profit generation

Rationale: Performance budgeting ties funding to measurable program

results.

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