Human Resources Certification Institute (HRCI) Practice Exam

Zero-based budgets require each department to justify its entire budget, regardless of whether the total budget is higher or lower than the previous year. This differs from incremental budgets (option A), which only adjust for changes from the previous year. Bottom-up budgets (option B) involve each department creating its own budget and then combining them at the executive level, while top-down budgets (option D) involve creating a budget from the top down, typically with limited input from lower level departments. Therefore, zero-based budgets specifically start from scratch each year, making it the correct answer.