Which statement about funding limit and project budget is correct?

• A. The project budget is the total authorized amount; funding limit is the maximum amount that can be allocated from funding sources at a given time.
• B. The funding limit is the total approved amount; the project budget is the sum of all funding.
• C. The project budget is the monthly expense; funding limit is the annual.
• D. The funding limit is the total project cost; budget is the income.

Answer: (A)

The question tests the difference between what the project can ultimately spend (the budget) and what funding can be drawn at any moment (the funding limit). The project budget represents the total authorized amount to be spent across all project activities. The funding limit is the maximum cash that can be allocated from funding sources at a given time, which may be released in stages as work progresses.

So the correct statement matches this: the project budget is the total authorized amount, while the funding limit is the maximum amount that can be allocated from funding sources at a given time. For example, a project might have a total budget of 1,000,000, but only 600,000 may be available to draw at the start, with additional funds released as milestones are met.

The other options mix up these definitions or use unrelated time frames or terms, which doesn’t fit how budgets and funding limits operate in project funding.