Question

Identify which trait below about incremental budgeting is FALSE

Answer 1

Answer:

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Answer 2

Correct question:

Identify which trait below about incremental budgeting is FALSE.

1. Inputs or activities are determined by the budgeted outputs
2. It takes previous years' budget and add or subtract a certain percentage from it to make the new year's budget
3. It can carry over mistakes or slack budgets from previous years
4. It is the most commonly used method of budgeting

The false statement is Inputs or activities are determined by the budgeted outputs.

• The concept behind incremental budgeting is that the easiest way to create a new budget is to just make minor adjustments to the one that is already in place. In other words, incremental budgeting involves starting with the present budget and adding or subtracting incremental assumptions to arrive at new budget numbers.
• In terms of budgeting techniques, incremental budgeting is frequently regarded as the most conservative strategy.
• The simplest method of budgeting is incremental budgeting. It doesn't need complicated computations because it projects the future budget using the budget for the present period.
• The budgeting method also simply calls for a small number of assumptions.
• Finally, the method's ease of use enables the management of the organisation to shorten the budgeting process.

The false statement is Inputs or activities are determined by the budgeted outputs.

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