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    Question

    In Zero-Based Budgeting (ZBB), the budget for each

    activity is:
    A Based on previous year’s allocation Correct Answer Incorrect Answer
    B Adjusted for inflation Correct Answer Incorrect Answer
    C Justified from scratch, without reference to past budgets Correct Answer Incorrect Answer
    D Allocated based on senior management preference Correct Answer Incorrect Answer

    Solution

    ZBB requires that every expense be justified anew, without assuming continuity of past budgets. It ensures optimum resource allocation. Mr. A has the following incomes during the year: • Income from Salary: ₹4,00,000 • Income from House Property (net after deductions): ₹1,00,000 • Profit from Business: ₹2,00,000 • Income from Capital Gains: ₹50,000 • Income from Other Sources: ₹25,000

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