Zero-based budgeting requires managers to justify all funds requested, starting from zero, rather than simply basing the new budget on the previous year's budget. This means that all expenses must be justified and prioritized, resulting in a more thorough and efficient budgeting process.

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Zero-Based Budgeting

Question 31

Multiple Choice

Zero-based budgeting

A) Requires justification for any new increases in requested amounts
B) Means that managers will have less work to prepare their budget requests
C) Requires managers to justify all funds requested
D) Is used as a means of reducing the paperwork involved with the budgeting process

Correct Answer: