Page 143 - DCOM206_COST_ACCOUNTING_II

Cost Accounting – II

Notes 7.6 Keywords

Budget: A budget is a predetermined statement of management policy during a given period
which provides a standard for comparison with the results actually achieved.

Budgeting: The entire process of preparing the budgets is known as budgeting.
PPBS: Planning-Programming-Budgeting System
Zero-Based Budgeting: In budgeting technique, when the whole budget, from the beginning, is
based on zero it is called the ‘Zero-based budgeting’.

7.7 Review Questions

1. What is meant by zero-based budgeting?
2. Discuss the brief history of zero-based budgeting.

3. What are the different steps involved in ZBB and how is it useful to the business?
4. Explain the limitations of zero-based budgeting.
5. How does ZBB overcome the weaknesses of the conventional budgeting?
6. What are the differences between zero-based budgeting and traditional budgeting?
7. Enumerate the advantages of zero-based budgeting.

Answers: Self Assessment

1. Cost accountants 2. Planning-Programming-Budgeting
System (PPBS)
3. True 4. True

5. False 6. True
7. False 8. True
9. True 10. False
11. False 12. True

7.8 Further Readings

Books Bhar. K.B. (2008) Cost Accounting, Methods & Problem, Academic Publishers.

th
Lal, Jawahar & Srivastava, Seema (2009) Cost Accounting, 4 Edition, Tata McGraw-
Hill Education.
Nigam, Lal B.M. & Jain I. C. (2001) Cost Accounting: An Introduction, PHI Learning
Pvt. Ltd.
Thakur. S.K, (2009). Cost Accounting: Theory and Practice, Excel Books.

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