Consider the following statements about zero-base budgeting.
i. The budget for virtually every activity in an organisation is initially set to the level that existed during the previous year.
ii. The budget helps identify areas of waste and redundant activities.
iii. The budget must be justified in terms of its continued usefulness.
Which statement/s is/are true?
A) i, ii and iii
B) i and ii
C) ii and iii
D) iii

Question

Quizplus · Accepted Answer

Zero-base budgeting requires that every budget item be justified from a base of zero, rather than simply adjusting previous budgets, which helps identify waste and ensures activities remain useful. Statement i is incorrect because it describes traditional budgeting, not zero-base budgeting.

Consider the Following Statements About Zero-Base Budgeting