What does a balanced budget indicate?

A balanced budget indicates that revenues equal expenses. This means that the total amount of money collected through income or revenues is equal to the total amount spent on expenses during a particular fiscal period. This is crucial for maintaining financial stability, as it ensures that an entity does not spend more than it earns, thus avoiding deficits, which can lead to financial distress.

In the context of budgeting, achieving a balance ensures that funds are allocated efficiently and responsibly while maintaining the sustainability of the organization's financial health. This is particularly important for entities such as governments, schools, and non-profit organizations, which often operate under strict budgetary constraints and rely on accurate revenue projections to inform their spending decisions.

The other options relate to different financial principles: debits equaling credits pertain to accounting principles, where every transaction affects at least two accounts; assets equal liabilities refer to the basic accounting equation reflecting the financial position of an entity; and the comparison of balance sheet cash to bank cash deals with cash management practices. While these concepts are important in the context of overall financial management, they do not specifically define the concept of a balanced budget.