What is a net surplus?

What is a net surplus?

• A. The amount remaining after deficits are subtracted from surpluses.
• B. The total income minus total expenses.
• C. The cash balance at month's end.
• D. The debt outstanding.

Answer: (B)

Net surplus shows how much money is left after all income has been used to cover expenses. It’s the positive difference you get when you subtract total expenses from total income, and it indicates how much you could save or invest rather than spend. The best choice reflects this exact relationship: income minus expenses equals the surplus that remains. This concept is different from a simple cash balance at month’s end, which is just a snapshot of available cash that can be affected by timing, and from debt outstanding, which is what you owe rather than what you’ve earned minus what you’ve spent.

Net surplus shows how much money is left after all income has been used to cover expenses. It’s the positive difference you get when you subtract total expenses from total income, and it indicates how much you could save or invest rather than spend. The best choice reflects this exact relationship: income minus expenses equals the surplus that remains. This concept is different from a simple cash balance at month’s end, which is just a snapshot of available cash that can be affected by timing, and from debt outstanding, which is what you owe rather than what you’ve earned minus what you’ve spent.