A budget built from the ground up each year rather than by simply adding a percentage increase to last year's numbers is called:
A) a static budget.
B) a flexible budget.
C) a zero-based budget.
D) a master budget.

Question

Quizplus · Accepted Answer

A budget built from the ground up each year rather than by simply adding a percentage increase to last year's numbers is called a zero-based budget. This approach requires every expense and activity to be justified and evaluated based on its needs and costs. This can lead to better decision-making and cost management compared to using a static or master budget, which may not account for changing circumstances or new opportunities. Flexible budgets may adjust based on changes in activity levels but still rely on previous spending patterns, whereas zero-based budgets prioritize a fresh analysis of each expense.

A Budget Built from the Ground Up Each Year Rather