Subject - Accounting:

Cost and Management Accounting

MCQ - 180-182

Question:

Which of the following is the best description of zero-base budgeting?

Zero-base budgeting is a technique applied in government budgeting in order to have a neutral effect on policy issues
Zero-base budgeting requires a completely clean sheet of paper every year, on which each part of the organization must justify the budget it requires
Zero-base budgeting starts with the figures of the previous period and assumes a zero rate of change
Zero-base budgeting requires a completely clean sheet of paper every year, on which each part of the organization must justify the budget it requires

Correct Answer: B

Explanation:

A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs. Budgets are then 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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355 MCQ for effective preparation of the test of Cost and Management Accounting of Accounting section.

Read the MCQ statement: Which of the following is the best description of zero-base budgeting? , keenly and apply the method you have learn through the video lessons for Cost and Management Accounting to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 180-182.

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Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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