A public school district formally adopted a budget with estimated revenues of $800 and approved expenditures of $780. Which of the following is the appropriate entry to record the budget?
A) Debit Estimated revenues $800; Credit Appropriations $780; Credit Fund balance $20.
B) Debit Appropriations $780; Debit Fund balance $20; Credit Estimated revenues $800.
C) Debit Encumbrances $780; Debit Fund balance $20; Credit Estimated revenues $800.
D) Memorandum entry only.

Question

Quizplus · Accepted Answer

The correct entry to record the budget in governmental accounting involves debiting (increasing) Estimated Revenues for the amount expected to be received ($800) and crediting (increasing) Appropriations for the amount of expenditures approved ($780). The difference between estimated revenues and appropriations, if revenues are higher, is credited to the Fund Balance ($20), indicating an increase in the fund's net position or available resources.

A Public School District Formally Adopted a Budget with Estimated