Multiple choice

Directions: Choose the correct option for the given question.

The process of budget making after re-evaluating every item of expenditure in every financial year is known as

  1. Performance Budgeting

  2. Deficit Budgeting

  3. Zero Based Budgeting

  4. Fresh Budgeting
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Zero Based Budgeting (ZBB) is the process where every item of expenditure is re-evaluated from scratch (zero base) each financial year. Unlike traditional budgeting that adjusts previous allocations, ZBB requires managers to justify all expenditures as if starting anew, ensuring resources are allocated efficiently based on current priorities rather than historical patterns.

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