CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 65 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 65
Topic #: 1

Which of the following definitions best describes Zero based budgeting?

AA method of budgeting where an attempt is made to make the expenditure under each cost heading as close to zero as possible

BA method of budgeting whereby all activities are re-evaluated each time a budget is formulated

CA method of budgeting where the sum of revenues and expenditures in each budget centre must equal zero

DA method of budgeting whereby every item of expenditure does not have to be justified before its inclusion in the budget

Show Suggested Answer

Suggested Answer: B, C, F

https://www.acowtancy.com/textbook/acca-ma/d2-budget-preparation/master-budgets/notes

by Jeanice at Mar 08, 2024, 08:55 PM

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Lemuel

4 days ago

Option B seems to be the most accurate description of zero-based budgeting. It's all about re-evaluating everything from scratch each budget cycle, not just trying to minimize costs.

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Eladia

8 days ago

But doesn't Zero based budgeting focus on justifying every item of expenditure, like in option D?

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Taryn

11 days ago

I disagree, I believe it's B) A method of budgeting whereby all activities are re-evaluated each time a budget is formulated.

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Eladia

14 days ago

I think the best definition is A) A method of budgeting where an attempt is made to make the expenditure under each cost heading as close to zero as possible.

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