ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In its simplest form, a budget plans for and compares income and expenses over a specified time period. Budgets require you to subtract expenses from income. If you have money left, you have a surplus.

Detailed explanation-2: -The simplest and most accurate way to determine your income and expenses is to keep all of your receipts, bills, invoices and collections and enter them into a ledger as they occur. At the end of each month, perform a reconciliation using your bank and credit statements to double-check your ledger numbers.

Detailed explanation-3: -Income Budget represents the revenue you are projected to receive over the course of the fiscal year, and it is compared to your Income Actuals to track progress. The income budget also serves as the source to support your expenditure budget.

Detailed explanation-4: -A budget is a plan that shows you how you can spend your money every month. Making a budget can help you make sure you do not run out of money each month. A budget also will help you save money for your goals or for emergencies.

Detailed explanation-5: -When expenses exceed income, three alternatives are recommended: increase income, reduce expenses, or a combination of the two. To understand where your money is going and to identify ways to cut back, consider tracking your expenses for a month or two.