1. Budgeting Basics

Creating A Budget — Quiz

Test your understanding of creating a budget with 5 practice questions.

Practice Questions

Question 1

In a zero-based budget, a household has a net income of \$4800. They allocate \$2300 to fixed expenses, \1200 to variable expenses, and \$800 to savings goals. What is the amount of unallocated income that must be assigned to categories to achieve a zero balance?

Question 2

If a category in your budget was set at \$400 but actual spending is \$460, what is the budget variance and is it favorable or unfavorable?

Question 3

You need to budget for a car registration fee of \$450 that is due every 18 months. Using a sinking fund, what monthly amount should you allocate?

Question 4

Which key difference distinguishes zero-based budgeting from incremental budgeting?

Question 5

Following a pay-yourself-first strategy, if your net income is \3200 and you allocate 15\\% to an emergency fund and 20\\% to retirement, how much remains for your other expenses?