Which one of these categories would most likely be found in the operating budget of a day care center?
A. Tables and chairs for classroom
B.Desks and chairs for the office
C. Deposits for utility services
D. Loan payments
I chose the letter C. Can someone check my answer.
I don't know about deposits for utility services. If "deposits" mean payments for recurring utility costs, then yes. But my experience is that deposits are not recurring, deposits are fees required when changing or initiating services, so normally would not be an operating expense, but associated with a capital renovation or building cost.
Thus, Loan payments to pay off loans for the land, equipment, or building could be easily part of the operating budget, even though many folks budget those in an a capital recovery line item, outside of the operating budget.
So maybe you are right, maybe wrong. The C and D wording is not clear to me.
Thanks
To determine which category would most likely be found in the operating budget of a day care center, let's analyze each option:
A. Tables and chairs for classroom: This expense is more closely related to the capital budget, which deals with long-term investments or purchases that contribute to the organization's infrastructure.
B. Desks and chairs for the office: Similarly, this expense is also more aligned with the capital budget. Office furniture is typically considered a long-term investment.
C. Deposits for utility services: This option is a potential operating budget expense. Utility services, such as electricity, water, and gas, are recurring costs that fall within the day-to-day operations of a day care center.
D. Loan payments: Loan payments are typically part of the capital budget, as they involve the repayment of borrowed funds used for long-term investments, such as building renovations or purchasing property.
Based on the above analysis, it seems that the best option is indeed C. Deposits for utility services. This expense is likely to be found in the operating budget of a day care center.