What occurs when revenue exceeds expenses?

What occurs when revenue exceeds expenses?

• A. Budget deficit
• B. Budget surplus
• C. Budget allocation
• D. Budget analysis

Answer: (B)

When revenue exceeds expenses, it indicates that an organization, government, or individual is earning more than what they are spending. This situation results in a budget surplus. A budget surplus can be viewed as a positive financial outcome, as it signifies that there are extra funds available that can be used for various purposes, such as investing, saving, or funding future projects. In contrast, a budget deficit occurs when expenses surpass revenue, which might indicate financial challenges. Budget allocation refers to the process of distributing available resources among different departments or projects, while budget analysis involves assessing spending against a plan or budget to understand financial health and make adjustments as necessary. Therefore, the correct characterization of a situation where revenue exceeds expenses is indeed a budget surplus.

When revenue exceeds expenses, it indicates that an organization, government, or individual is earning more than what they are spending. This situation results in a budget surplus. A budget surplus can be viewed as a positive financial outcome, as it signifies that there are extra funds available that can be used for various purposes, such as investing, saving, or funding future projects.

In contrast, a budget deficit occurs when expenses surpass revenue, which might indicate financial challenges. Budget allocation refers to the process of distributing available resources among different departments or projects, while budget analysis involves assessing spending against a plan or budget to understand financial health and make adjustments as necessary. Therefore, the correct characterization of a situation where revenue exceeds expenses is indeed a budget surplus.