Below are some budgeting techniques which are used rarely (or more often) by government agencies and corporations. Which answer is true? a. Flexible budgeting is rarely used by corporations and often used by government agencies b. Zero-based budgeting is rarely used by corporations and often used by government agencies c. Budget lapsing is often used by corporations and often used by government agencies d. Encumbrance accounting is often used by corporations and rarely used by government agencies

Answer: B

Explanation:

A business creates a budget when it wants to match its actual future performance to an ideal scenario that incorporates its best estimates of sales, expenses, asset replacements, cash flows, and other factors. There are a number of alternative budgeting models available. The following list summarizes the key aspects and disadvantages of each type of budgeting model. A zero-base budget involves determining what outcomes management wants, and developing a package of expenditures that will support each outcome. By combining the various outcome-expenditure packages, a budget is derived that should result in a specific set of outcomes for the entire business. This approach is most useful in service-level entities, such as governments, where the provision of services is paramount. However, it also takes a considerable amount of time to develop, in comparison to the static budget.