_____ The Board of Commissioners of Vane City adopted its budget for the year ending 7/31/06, comprising estimated revenues of $30,000,000 and appropriations of $29,000,000. What entry should be made for budgeted appropriations?

Question

Quizplus · Accepted Answer

When a government entity like the Board of Commissioners of Vane City adopts its budget, it makes entries in its accounting records to reflect the budgeted amounts for revenues and expenditures. The budgeted appropriations represent the legal authority granted by the governing body to incur liabilities and make expenditures. Appropriations are typically credited because they represent an increase in the amount of funds that the government has authorized to spend.
Therefore, the entry to record the budgeted appropriations in the general ledger of Vane City would be:
Debit: Budgetary Control
Credit: Appropriations $29,000,000
This entry increases the Appropriations account, which is a contra-equity account, reflecting the amount that can be legally expended during the fiscal year. There is no actual expenditure or liability at this point, so no entry is made to an Expenditures or Payable account. The Budgetary Control account is debited to balance the entry and is used to track the status of the budget throughout the fiscal year.

_____ the Board of Commissioners of Vane City Adopted Its