Grant Writing Budget and Financial Planning 3

Question 1

Under the Uniform Guidance (2 CFR 200), which of the following costs is generally considered UNALLOWABLE for federal grants?

Accepted Answer

Alcoholic beverages purchased for a project celebration

Answer

Alcoholic beverages are explicitly listed as unallowable costs under the Uniform Guidance and may not be charged to federal awards.

Question 2

Which financial document provides a snapshot of an organization's assets, liabilities, and net assets at a specific point in time?

Accepted Answer

Statement of financial position (balance sheet)

Answer

The statement of financial position (balance sheet) shows what an organization owns (assets), owes (liabilities), and the difference (net assets) at a single date.

Question 3

A grant applicant calculates fringe benefits at 28% of salaries. If a project director earns $60,000 and is budgeted at 50% effort, what is the correct fringe benefit amount to include?

Accepted Answer

$8,400

Answer

50% effort on $60,000 salary = $30,000; fringe at 28% of $30,000 = $8,400.

Question 4

What is the primary risk of underestimating project costs in a grant budget?

Accepted Answer

The organization may need to use unrestricted funds to cover project shortfalls

Answer

If actual costs exceed the awarded budget, the grantee organization typically must cover the gap with its own unrestricted funds, creating financial strain.

Question 5

Which principle requires that costs charged to a grant must benefit the project they are charged to?

Accepted Answer

Allocability

Answer

Allocability means a cost is assignable to a grant in proportion to the benefit the grant receives—costs must be directly connected to project activities.

Grant Writing Practice Test

Grant Writing Practice Test

Grant Writing Budget and Financial Planning 3