DAV
Question : Which one of the following occurs when current expenses exceed the amount of income received through standard operations?
Option 1: Budget variance
Option 2: Budgetary slack
Option 3: Budget deficit
Option 4: Budget surplus
Correct Answer: Budget deficit
Solution : The correct answer is Budget deficit.
When current expenses surpass the income generated through standard operations, it leads to a "Budget deficit." In this financial scenario, the organisation or entity is spending more than it is earning, creating a deficit that may need to be addressed through alternative funding sources or adjustments in financial planning.
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