Question

Which of the following is a feature of a "zero-based budget"?

• A. It allocates funds based on historical spending patterns.
• B. It focuses solely on revenue generation and ignores expenditure.
• C. It automatically rolls over unspent funds to the next fiscal year.
• D. Every expenditure item must be justified from a "zero" base each year

Answer 1

Answer:

D. Every expenditure item must be justified from a "zero" base each year

• Zero-based budgeting requires that all expenditures be justified for each new period, regardless of whether the amounts were included in the previous budget. It's a method of budget preparation that starts from scratch.