Scenario - Katrina Aldridge
The yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is preparing for that audit and is also preparing her budget for the coming year.
-In planning and budgeting for the next 12 months, Katrina is participating in a budgeting process in which lower-level manager's budget their department's resource needs and pass them up to top management for approval. This budget process is an example of:
A) zero-based budgeting.
B) bottom-up budgeting.
C) top-down budgeting.
D) balance sheet budgeting.
E) none of these.

Question

Scenario - Katrina Aldridge 
The yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is preparing for that audit and is also preparing her budget for the coming year.
-In planning and budgeting for the next 12 months, Katrina is participating in a budgeting process in which lower-level manager's budget their department's resource needs and pass them up to top management for approval. This budget process is an example of:
A) zero-based budgeting.
B) bottom-up budgeting.
C) top-down budgeting.
D) balance sheet budgeting.
E) none of these.

Quizplus · Accepted Answer

The budgeting process where lower-level managers prepare their department's budgets and pass them up to top management for approval is called bottom-up budgeting. This process involves input from those closest to the daily operations and allows for more accurate and realistic budgeting. Zero-based budgeting involves starting from scratch and justifying every expense, top-down budgeting involves senior management dictating the budget without input from lower-level managers, and balance sheet budgeting is a method of budgeting that focuses on the company's financial statements.