What is a budget surplus?

A budget surplus occurs when total revenue exceeds total expenditure. This means that the income generated, such as tax revenues or other forms of revenue for a government or an organization, is greater than the costs associated with expenditures over a specific period. A surplus suggests a favorable financial position, allowing the surplus funds to be used for various purposes, such as paying down debt, saving for future needs, or funding new initiatives.

The other options describe different financial scenarios. A negative balance when spending exceeds revenue would indicate a budget deficit, which is the opposite of a surplus. An equal balance of revenue and expenditure would result in a balanced budget, where neither a surplus nor a deficit exists. A situation where the government borrows money typically refers to financing a deficit rather than indicating a surplus.