Net surplus is defined as which of the following?

Net surplus is defined as which of the following?

• A. The total expenses for the period.
• B. The amount saved for emergencies.
• C. The amount remaining after deficits are subtracted from surpluses.
• D. The amount remaining after all budget classification deficits are subtracted from those with surpluses.

Answer: (D)

Net surplus is the overall amount left after you net the positives (surpluses) against the negatives (deficits) across all budget classifications. In practice, you total up all surpluses and all deficits, and subtract the deficits from the surpluses. If the result is positive, you have a net surplus; if negative, a net deficit. The most precise description is the one that states the amount remaining after all budget classification deficits are subtracted from those with surpluses, because it emphasizes aggregating across categories and the direction of subtraction. The other options describe expenses, a savings goal, or are less explicit about aggregating across budget classifications.

Net surplus is the overall amount left after you net the positives (surpluses) against the negatives (deficits) across all budget classifications. In practice, you total up all surpluses and all deficits, and subtract the deficits from the surpluses. If the result is positive, you have a net surplus; if negative, a net deficit. The most precise description is the one that states the amount remaining after all budget classification deficits are subtracted from those with surpluses, because it emphasizes aggregating across categories and the direction of subtraction. The other options describe expenses, a savings goal, or are less explicit about aggregating across budget classifications.