Which of the following statement(s)is/are true about zero- based budgeting ? (Select the correct answer from the options below the statements) (1) It is costly to implement (2) It encourages every cost element to be justified (3) It encourages a questioning approach All of the above (1) only (1) and (2) None of the above

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Which of the following statement(s)is/are true about zero- based budgeting ? (Select the correct answer from the options below the statements) (1) It is costly to implement (2) It encourages every cost element to be justified (3) It encourages a questioning approach All of the above (1) only (1) and (2) None of the above

Answer 1

All of the above

Answer 2

## Step 1: Each option and the related statement are verified against the proven facts about zerobased budgeting. ## Step 2: Statement (1) - "It is costly to implement"Zerobased budgeting is notoriously intense on resources to plan since every expenditure needs to be justified, so this can lead to higher costs. Hence, the statement is true.## Step 3: Statement (2) - "It encourages every cost element to be justified"Zerobased budgeting indeed encourages every expenditure element to be validated every time the budget is set, starting from a "zero base". Therefore, the statement is correct.## Step 4: Statement (3) - "It encourages a questioning approach"Zerobased budgeting definitely promotes scrutiny of every budgeted cost as each expense requires justification before approval, thus nurturing a questioning approach. Accordingly, this statement is also true.

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