Question

An often used approach to budgeting that simply derives the subsequent year's budget from the current year's budget is called:

A. Planning-programming-budgeting.
B. Incremental budgeting.
C. Zero-based budgeting.
D. Performance budgeting.

Answer 1

Incremental budgeting is the method where the subsequent year's budget is based on the current year's figures, with minor adjustments.

Step-by-step explanation:

The budgeting approach that derives the subsequent year's budget from the current year's budget, by making adjustments for known changes without starting from zero each time, is called incremental budgeting . This method typically involves small adjustments to the previous year's budget, rather than a comprehensive analysis of all expenditures. Incremental budgeting is contrasted with zero-based budgeting, where all expenses must be justified and approved for each new period, and with performance budgeting, which ties the budget to specific performance outcomes.