In zero-based budgeting, what is required for each line item?

In zero-based budgeting, what is required for each line item?

• A. The amount allocated must be justified.
• B. Line items must be increased to match prior year.
• C. Line items are automatically approved.
• D. Line items are determined by a fixed template.

Answer: (A)

Zero-based budgeting requires that every line item be justified from a zero base. For each expense, you must explain why it is needed, what benefits it delivers, and why that amount is appropriate, considering alternatives and constraints. This prevents simply carrying over last year’s figures and ensures resources are aligned with current goals. It is not about increasing to match prior year, automatic approvals, or following a fixed template.

Zero-based budgeting requires that every line item be justified from a zero base. For each expense, you must explain why it is needed, what benefits it delivers, and why that amount is appropriate, considering alternatives and constraints. This prevents simply carrying over last year’s figures and ensures resources are aligned with current goals. It is not about increasing to match prior year, automatic approvals, or following a fixed template.