Question

The first step in the system of introducing zero base budgeting is _____________.

• A. Determination of the extent/scope to which the zero base budgeting is to be introduced
• B. Determination of the objective of budgeting
• C. Preparation of budgets
• D. Identification of decision units

Answer 1

Answer: (D)

Identification of decision units

First and foremost step involved in the zero-based budgeting process is, identifying the decision unit. A decision unit can be a single activity or a cluster of activities which can be independently and meaningfully identified.