Zero-based budgeting
A)does not adjust costs for the expected level of activity.
B)is used when no increases in budgets are allowed.
C)requires that all programs be justified and prioritised.
D)assumes that departments are entitled to at least the current level of spending.

Question

Quizplus · Accepted Answer

Zero-based budgeting requires that all programs be justified and prioritised, meaning that each program and expense must be evaluated and justified in order to be included in the budget. This approach differs from traditional budgeting methods, which assume that incremental changes can be made to the existing budget. Zero-based budgeting helps organizations identify areas where they may be overspending or where they could reallocate funds to areas that are more critical to achieving their objectives.

Zero-Based Budgeting