Question

According to the text, what is one of the most widely used budgeting approaches?

a) Zero-based budgeting
b) Incremental budgeting
c) Activity-based budgeting
d) Flexible budgeting

Answer 1

Incremental budgeting is a widely used approach where the previous period's budget is adjusted for the current period, allowing for a more efficient budgeting process.

Step-by-step explanation:

One of the most widely used budgeting approaches is incremental budgeting. This method involves adjusting the previous period's budget to account for changes in costs and revenues for the current period. Instead of starting from zero each time, as in zero-based budgeting, incremental budgeting allows for a more straightforward and time-efficient process. Entities tend to adjust their budgets based on incremental changes rather than re-evaluating all financial details from scratch.