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    Question

    A budget that starts with the assumption that all

    departmental budgets are zero and requires justification for every expense is known as:
    A Master Budget Correct Answer Incorrect Answer
    B Flexible Budget Correct Answer Incorrect Answer
    C Incremental Budget Correct Answer Incorrect Answer
    D Zero-Based Budget (ZBB) Correct Answer Incorrect Answer

    Solution

    Zero-Based Budgeting (ZBB) is a method where each new budget period starts from a "zero base." Every function within an organization is analyzed for its needs and costs, and budgets are built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.

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