Entrepreneurship and Small Business (ESB) Certification Practice Exam

Which of the following is NOT a purpose of an operating budget?

1. Planning financial goals

2. Managing daily operations

3. Increasing employee bonuses

4. Tracking income and expenses

The correct answer is: Increasing employee bonuses

The primary purposes of an operating budget revolve around guiding financial management and operational efficiency within a business. An operating budget serves as a detailed plan that helps organizations outline their financial goals, manage day-to-day operations effectively, and track income and expenses throughout the fiscal period. When considering the purpose of increasing employee bonuses, this function typically falls outside the primary aims of an operating budget. While the budget may indirectly influence the ability to offer bonuses through its financial performance monitoring components, the operating budget itself is not designed specifically for that purpose. Bonuses may be a result of achieving certain financial metrics, but they are not a fundamental aim of the operating budget. Understanding this distinction is essential, as it highlights that budgets are primarily tools for planning and managing resources rather than for directly influencing compensation structures. This correct choice clarifies the focus of an operating budget on broader operational and financial management goals.