A city's General Fund general ledger includes accounts called Estimated Revenues, Appropriations, and Encumbrances. This indicates that the city

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The presence of accounts called Estimated Revenues and Appropriations indicates that the city has formally integrated its budget into its accounts by using a budget-to-actual reporting system. The Encumbrances account shows that the city is tracking outstanding commitments against the appropriations. This is a common practice in government accounting, which is based on an accrual basis of accounting. The presence of encumbrances does not indicate that the city is erroneously reporting them as expenditures.

A City's General Fund General Ledger Includes Accounts Called Estimated