Budgetary Accounting & Encumbrances

Question 1

Which types of government accounts are budgeted

Answer 1

The general fund is budgeted

The special revenue funds are budgeted

Question 2

First step in the budgetary process

Answer 2

Estimated revenues. Has a debit balance. Beginning of the budget process and is simply the amount of estimated revenue.

Question 3

Second step in the budgetary process:

Answer 3

Appropriations- estimate how much of that revenue will be spent, and this has a credit balance. So you have estimated revenues and then the estimated amount of that revenue that will be spent.

Question 4

Third step of budgetary process

Answer 4

Estimated other financing sources account, and this is a debit balance which includes expected inflows that are not categorized as revenues.

Question 5

Fourth step of budgetary process

Answer 5

Estimated other financing uses account which has a credit balance. This estimates other outflows of funds that wouldn’t be classified as expenditures such as transfers to other funds.

Question 6

What’s leftover after all the previous steps

Answer 6

Budgetary fund balance. This account doesn’t have a normal credit or debit balance, it is debited or credited to make the budgetary entry balance.

These steps are to setup the budget, there are normally no changes to this during the year unless the governing body meets and amends the budget or if revenues are much different than predicted.

Question 7

Entry to close the budget

Answer 7

Appropriations xxx

Estimated revenues xxx