A budget item lasting more than one year is typically part of which budget type?

• A. Performance
• B. Capital
• C. Line-item
• D. Program

Answer: (B)

A budget item that spans more than one year is best handled in a capital budget. Capital budgets are used for long-term assets and improvements that provide benefits over multiple years, such as vehicles, buildings, major equipment, or infrastructure projects. These items require planning, multi-year funding, and are often financed and depreciated over time, which is why they sit in the capital category rather than in operating, line-item, or program budgets. The other budget types focus more on annual expenses, organizational programs, or outcomes rather than long-lived assets, so they don’t fit the nature of multi-year items as well as capital budgets.