The budgeting strategy that evaluates the necessity of every item on the budget each year by starting with a zero in each budget category is called:
A)accrual budgeting.
B)cash budgeting.
C)zero-based budgeting.
D)cash flow budgeting.

Question

Quizplus · Accepted Answer

Zero-based budgeting is a technique whereby every line item of an organization's budget must be justified for a new fiscal period. It begins with a zero balance and assumes no activity. Managers only justify expenses that are essential to operations in relation to current services being provided or proposed activities. This method can help businesses reduce unnecessary spending and increase awareness of expenses.

The Budgeting Strategy That Evaluates the Necessity of Every Item