ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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once
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twice
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every months
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every quarters
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Detailed explanation-1: -Traditional budgeting is a method that depends on the same year’s spending to do the budgeting for the current year. The only benefit of going for this sort of budgeting is simplicity. If a company follows this type of budgeting, it doesn’t need to rethink every item on the list.
Detailed explanation-2: -Budget periods are usually 12 months long but may be shorter or longer, if appropriate. Sometimes referred to as the Budget Year.
Detailed explanation-3: -Zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period. The process of zero-based budgeting starts from a “zero base, ” and every function within an organization is analyzed for its needs and costs.
Detailed explanation-4: -ZBB is an operating, planning and budgeting process which requires each manager to justify his entire budget request in detail from scratch (hence : zero-base) and shifts the burden of proof to each manager to justify why he should spend at all.