What is surplus defined?

A surplus is the amount by which actual revenues exceed budgeted revenues, or actual expenditures are less than budgeted expenditures. In accounting terms, a surplus is recorded as a credit balance in a company's financial statements. It indicates a positive financial outcome, as there is money left over after all expenses have been paid. This surplus can be used for various purposes, such as paying down debt, investing in new projects, or returning funds to shareholders. Surpluses can also be created by government entities or non-profit organizations, where they can be used to fund programs or services, or held in reserve for future use. However, it is important to note that a surplus is not always a long-term trend, and can fluctuate based on changes in revenue or expenses.