Adult-Gerontology Clinical Nurse Specialist (CNS) Practice Exam

Which of the following statements about a capital budget is least accurate?

1. The capital budget provides for depreciation.

2. A capital budget is the same as an operating budget.

3. A capital budget projects the planned costs of major purchases.

4. Capital budgets also deal with maintenance and renovations, remodeling, and improvements.

The correct answer is: A capital budget is the same as an operating budget.

The statement regarding the capital budget being the same as an operating budget is least accurate because these two types of budgets serve different purposes within an organization. A capital budget specifically focuses on long-term investments and projects that involve significant capital expenditures, such as purchasing new equipment, building infrastructure, or upgrading facilities. It lays out the planned costs associated with these major purchases, typically over multiple years, as well as considerations for maintenance, renovations, and improvements related to those investments. In contrast, an operating budget encompasses the day-to-day expenses necessary for running the organization, including salaries, utilities, and routine operational costs. While both budgets are essential for financial planning, they address different time horizons and financial strategies, reinforcing that they are not interchangeable.