Zero Based Budgeting (ZBB): Learning Objective of the article: Define and explain the term “zero based budgeting” and “incremental budgeting” in managerial accounting. Explain the importance and use of zero based budgeting in business. What are advantages and disadvantages of zero based budgeting? Contents:
Explanation of Zero Based Budgeting (ZBB) Method
Explanation of Zero Based Budgeting (ZBB) Method is used for preparing cash flow budgets and operating plans which every year must start from scratch with no pre-authorized funds.