When the budget of a government is recorded and Appropriations exceeds Estimated Revenues, the Budgetary Fund Balance account is:
A) Credited at the beginning of the year and debited at the end of the year.
B) Credited at the beginning of the year and no entry is made at the end of the year.
C) Debited at the beginning of the year and no entry is made at the end of the year.
D) Debited at the beginning of the year and credited at the end of the year.

Question

Quizplus · Accepted Answer

When Appropriations exceed Estimated Revenues, it results in a deficit. Therefore, the Budgetary Fund Balance account is debited at the beginning of the year to reflect the deficit. At the end of the year, if the deficit remains, the Budgetary Fund Balance account is credited to reflect the remaining deficit. This is because the Budgetary Fund Balance account represents the government's available resources, and a deficit represents a decrease in those resources.

When the Budget of a Government Is Recorded and Appropriations