When the amount of income on a budget is greater than the amount actually spent on expenses, the person has a?

When the amount of income on a budget is greater than the amount actually spent on expenses, the person has a?

• A. Deficit
• B. Balanced budget
• C. Surplus
• D. Shortfall

Answer: (C)

When income exceeds expenses in a budget, the individual experiences a surplus. This indicates that after all necessary expenses are accounted for, there is extra money remaining. A surplus can provide an opportunity for saving, investing, or spending on discretionary items, contributing to financial stability and growth. Understanding the concept of a surplus is key in personal financial literacy, as it emphasizes the importance of managing one’s finances in a way that allows for savings and financial security. In contrast, a deficit occurs when expenses outweigh income, a balanced budget means income equals expenses, and a shortfall refers to a situation where not enough funds are available to cover expenses.

When income exceeds expenses in a budget, the individual experiences a surplus. This indicates that after all necessary expenses are accounted for, there is extra money remaining. A surplus can provide an opportunity for saving, investing, or spending on discretionary items, contributing to financial stability and growth.

Understanding the concept of a surplus is key in personal financial literacy, as it emphasizes the importance of managing one’s finances in a way that allows for savings and financial security. In contrast, a deficit occurs when expenses outweigh income, a balanced budget means income equals expenses, and a shortfall refers to a situation where not enough funds are available to cover expenses.