Which of the Following Is a Characteristic of Zero-Based Budgeting

question 7

Multiple Choice

Which of the following is a characteristic of zero-based budgeting?

• A)Used in the public sector where the entity is generally told what areas it shall operate in
• B)Involves the budget being built from the lowest level of management upward,starting at the 'coal face' with workers actually on the job
• C)The budget for virtually every activity is set initially to nil,then to receive a budget allocation the manager must justify each activity in terms of its ability to meet the objectives of the business
• D)The budget is developed from a ranking of employees,determined by their relative contribution to the business objectives.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for products or services delivered on credit.

Net Income

The total profit of a company after all revenues, cost of sales, operating expenses, and taxes have been subtracted from its total revenue.

Operating Activities

Activities that relate to the primary operations of a company, such as selling goods and services, which are reflected in the cash flow statement.

Depreciation Expense

The methodical distribution of a tangible asset's cost throughout its usable life.