What budget type allocates funds into several categories for daily operations?

The operating budget is the correct answer because it specifically focuses on the day-to-day operations of an organization, allowing for the allocation of funds into various categories necessary for running those operations effectively. This budget includes expenses such as salaries, utilities, supplies, maintenance, and other ongoing costs that are essential for the functioning of the organization on a regular basis.

The operating budget typically breaks down funding into specific areas or categories that detail where resources will be utilized, providing a clear, comprehensive plan for all routine expenditures over a set period, typically a fiscal year. This kind of budgeting is crucial for ensuring that a department can meet its operational needs while maintaining financial health.

Other budget types, such as the capital budget, focus on long-term investments and expenditures for major projects or infrastructure, while the incremental budget primarily adjusts previous budgets based on past expenditures without deep examination of individual line items. The annual budget refers to any budget that covers a single fiscal year but does not specifically imply the focus on daily operations that the operating budget does.