A City Council approves its 2020 budget. The City experienced serve drought conditions during 2020, as a result the fire department had paid excess overtime of $8,000 for fighting wildfires as of mid-year. The City's budget officer estimated that total 2020 fire department overtime expenditures would be $13,000 compared to budgeted overtime appropriations of $5,000. The budget officer suggests deferring a portion of the City police department's planned new radio purchases by $8,000.
After consulting the police department, the City Council approves budgetary revision. What journal entry would be used to record this revision?

Question

Quizplus · Accepted Answer

When a budgetary revision takes place, the budgetary appropriation for one department may be reduced to supplement the appropriation amount for another department. In some cases, estimated revenues may be reduced and department appropriations reduced or estimated fund balance reduced to maintain a balanced budget. In other cases, fund balance may be reduced to supplement the appropriation amount for a shortfall within a department. When original budgetary appropriations are recorded in a government's records, they are credited. When appropriations must be reduced in budgetary accounts, they are debited.

A City Council Approves Its 2020 Budget