Question

At the beginning of the year, the Cortlandt City Council adopts a budget calling for estimated revenues of $480,000 and appropriations of $470,000. When the City prepares its journal entry to record the budget: Group of answer choices The Budgetary fund balance account must be credited Revenues for the year will be less than expenditures The Budgetary fund balance account must be debited Expenditures for the year will be less than revenues

Answer 1

Answer: The Budgetary fund balance account must be credited.

Explanation:

When recording Revenue and Appropriations together, the Revenue is debited and the Appropriations are credited. The Budgetary Fund is credited when Revenue is higher than Appropriations and designated usually as "Unassigned".

In this scenario, the amount going to the Budgetary Fund will be $10,000 which is the difference between Revenue and Appropriations.