When each new budget is based on the amounts contained in the budget from the preceding year, a company is using ____ budgeting.
A) zero-base
B) traditional
C) Cash
D) capital
E) production

Question

Quizplus · Accepted Answer

Traditional budgeting is based on the prior year's budget and is also known as incremental budgeting. It is a common method used by most companies to create new budgets. In traditional budgeting, the budget is formed by taking the prior year's budget and adjusting it to account for expected increases or decreases in expenses or revenue.

When Each New Budget Is Based on the Amounts Contained