A favorable expenditures variance signifies that,during the year,
A)Unassigned fund balance increased
B)actual spending was less than budgeted spending
C)estimated revenues were less than actual revenues
D)total expenditures did not exceed total encumbrances

Question

Quizplus · Accepted Answer

A favorable expenditures variance means that actual spending for the year was less than the budgeted spending. This could be due to cost savings or less demand for services than anticipated. It does not necessarily mean that unassigned fund balance increased or that estimated revenues were less than actual revenues, although those scenarios could be possible as a result of the expenditure variance. Total expenditures exceeding total encumbrances would create an unfavorable expenditure variance.

A Favorable Expenditures Variance Signifies That,during the Year