Question

Zero-based budgeting (ZBB) means-

• A. A tool of marketing cost
• B. A tool for financial analysis
• C. each year, budgeting starts from a starch.
• D. a certain percentage of sales
• E. Both 1 & 2

Answer 1

The correct option is C each year, budgeting starts from a starch.

Zero-based budgeting (ZBB) is a way of budgeting in which the budget is prepared in alignment with the organization's strategies and goals. In ZBB, the exercise starts from zero base (i.e.) all the elements of budgeting must be justified for every period of budgeting. It is basically made from scratch.