Adult-Gerontology Clinical Nurse Specialist (CNS) Practice Exam

What is the first step in the budgeting process?

1. Expense budget statistics

2. Budget revenue

3. Budget

4. Capital budget

The correct answer is: Expense budget statistics

The first step in the budgeting process typically involves analyzing and estimating expense budget statistics. This foundational step is crucial because it provides a detailed understanding of anticipated costs across different departments or areas within an organization. By examining past expenditures and projecting future needs, healthcare facilities and organizations can develop a realistic framework for allocating resources effectively. This initial assessment helps to establish the baseline for budgetary considerations, ensuring that spending aligns with organizational goals while taking into account historical spending patterns and emerging trends. It sets the stage for subsequent steps, such as estimating revenues and defining overall budget goals, making it an essential step in financial planning. While other components of budgeting, like revenue budgeting or capital budgets, are important, they often build upon the insights gained from analyzing expense budgets.