To create a balanced budget, one must make sure to spend less than or equal to income.
<u>Explanation:</u>
A budget is about planning finance for specific period of time. The planning may include sales volumes and revenues, resource quantities, costs and expenses and cash flows. The budget helps in forecasting income and expense.
The budget is framed based on the cash flow. The budget is of three types: balanced budget, surplus budget and deficit budget.
The budget is said to be balanced budget only if the revenue equals the expenditures. So to create the balanced budget an individual must spend less than or equal to his income.
