Question

Ridge township's governing body adopted its general fund budget for the year ended july 31, year 1, composed of estimated revenues of $100,000 and appropriations of $80,000, ridge formally integrates its budget into the accounting records. to record the appropriations of $80,000, ridge should:
a) credit appropriations control
b) debit estimated expenditures control
c) debit appropriations control.
d) credit estimated expenditures control.

Answer 1

Answer:

a) credit appropriations control  

Explanation:

Ridge township's governing body adopted its general fund budget for the year ended July 31, year 1, composed of estimated revenues of $100,000 and appropriations of $80,000, ridge formally integrates its budget into the accounting records. to record the appropriations of $80,000, ridge should:  credit appropriations control .

In government or public sector accounting which deals with the transaction recording of government agencies, the adoption of a budget is treated thus:

Dr. Estimated Revenues

Cr. Appropriations Control

Whatever variations in amount are then credited or debited to the fund balance

Answer 2

Answer:

A) credit appropriations control

Explanation:

The Governmental Accounting Standards Board (GASB) sets rules for public entities, and its rules states that appropriations must be credited once they are authorized. The government entity should also debit estimated revenues and debit/credit any differences in fund balances.

The appropriate journal entry to record this transaction should be:

July 31, Year 1:

Dr Estimated revenues 100,000

    Cr Appropriations control 80,000

    Cr Budgetary fund balance 20,000