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What is a budget?
A financial plan showing expected income and spending.
What two main elements make up a budget?
Income and Expenditure
Give one benefit of budgeting.
Helps avoid overspending.
Who uses budgets?
Individuals, households, and governments.
What does net cash mean?
Difference between income and expenditure.
If income €2,500, expenditure €2,000 → net cash = ?.
€500 surplus
If expenditure > income, what does this show?
A deficit.
Define opening cash.
Money at start of the period.
Define closing cash.
Money left at the end of the period.
Formula for closing cash?
Opening Cash + Net Cash
If opening cash €100 and net cash €50 → closing cash = ?
€150
What is a budget deficit?
When expenditure is greater than income.
What is a budget surplus?
When income is greater than expenditure.
Name the three types of expenditure in a budget.
Fixed, Irregular, Discretionary.
What can a household do to fix a deficit?
Reduce spending or increase income.
