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Flashcards in Budgetary Accounting Deck (29):
1

Is the normal balance of estimated other financing uses account a credit or debit?

Credit

2

Is the normal balance of estimated revenues account a credit or a debit?

Debit

3

What budgetary account represents the legally mandated spending limit?

Appropriations account.

4

Is the normal balance of estimated other financing sources account a credit or a debit?

Debit

5

Is the normal balance of appropriations account a credit or a debit?

Credit

6

What is the basis of accounting in which budgetary accounting is used?

Modified Accrual Basis

7

Describe the journal entry to record a budget at beginning of year.

DR: Estimated Revenues
          CR: Appropriations

DR or CR* Budgetary Fund
*As required to balance the entry

8

Describe the journal entry to close budgetary accounts at the end of the period.

DR: Appropriations
          CR: Estimated Revenues
DR or CR* Budgetary Fund
*As required to balance the entry

9

What is the purpose of Budgetary Accounting?

  1. Planning
  2. Control

 

10

What are the different Budgetary Accounts?

  1. Appropriations
    • Authorized spending (planned expenditures)
  2. Estimated Revenues
    • Forefast of financial resource inflows from revenues
    • Ex: Taxes, lincenses, fees
  3. Estimated Other Financing Sources and Uses
    • Interfund transfers
    • Proceeds from bonds

11

What funds use Budgetary Accounting?

Funds that use Modified Accrual Basis of Accounting

12

How different is Budgetary Account

from Actual Account?

Budgetary Accounts have balances opposite those of their actual account counterparts.

13

When is a basic entry to record a budget?

Entry is made at the beginning of the year.

Estimated Revenues  XXX

    Appropriations            XXX

 

DR or CR Budgetary Fund Balance to balance the entry.

 

14

What are the two important entries 

into the Budgetary accounts?

  1. Entry to set up the budget at the beginning of the year.
  2. Entry to close the budget at the end of the year.

15

When are mid-year entries made?

Mid-year entries occur only when the legislative body convenes and authorizes additional appropriations or when actual revenues are significantly different from predictions.

16

What is the entry to close the budget?

Appropriations         XXX

    Estimated Revenues        XXX

DR or CR Budgetary Fund Balance to balance the entry.

If there have been no changes to the budget during the year, the entry to close the budgetary accounts at the end of the fiscal period simply reverses the original entry.

 

 

17

What account is used to balance entries into the Budgetary Accounts?

The Budgetary Fund Balance is a "plug" figure used to balance entries into the Budgetary accounts.

18

In mid-year, the Lawrence City Council authorized $150,000 in additional expenditures to repair damages from spring flooding.

The entry to record the additional appropriation is...

Budgetary Fund Balance     XXX

    Appropriations                      XXX

19

Which funds are required to report 

Budget Information?

  1. General Funds
  2. Special Revenue Funds

20

What are appropriations?

  • Legally authorized spending limits
  • In Budgetary accounting, use Appropriations instead of "Estimated Expenditures".

21

When Rolan County adopted its budget for the year ending June 30, 2005, $20,000,000 was recorded for Estimated Revenues Control. Actual Revenues for the year ended June 30, 2005 amounted to $17,000,000.

In closing the budgetary accounts at June 30, 2005 what entry needs to be made?

Appropriations                 $20,000

    Estimated Revenue             $20,000

When the budgetary accounts are closed at the end of the fiscal year, the estimated revenues control account will be credited for the amount for which it was debited when the budget was recorded, $20,000,000.

22

Harbor City's Appropriations Control Account at December 31, 2005 had a balance of $7,000,000.

When the budgetary accounts were closed at year-end, this $7,000,000 Appropriations Control balance should have...

Appropriations                     $7,000,000

       Estimated Revenue            $7,000,000

23

What are three common examples of 

Estimated Revenues?

  1. Property Taxes
  2. Licenses and Permits
  3. Intergovernmental Revenues

 

 

24

What are Estimated Other Financing Resources?

Normal balance is a Debit

Estimates the inflow of funds that are not properly categorized as revenues

  • Operating Transfers from other funds
  • Proceeds of bond issues
  • Etc.

 

25

26

What are Estimated Financing Uses

Normal balance is a Credit

This account estimates the outflow of funds which are not properly categorized as expenditures:

  • Operating Transfers to other funds
  • Etc.

27

On January 1, Fonk City approved the following general fund resources for the new fiscal period:

  • Property taxes$5,000,000
  • Licenses and permits400,000
  • Intergovernmental revenues150,000
  • Transfers in from other funds350,000

What amount should Fonk record as estimated revenues for the new fiscal year?

$5,500,000

  • Transfers in from other funds are classified as "Other Financing Sources" and are not revenues.
  • The other three amounts are classified as revenues and, for budget purposes, should be included in determining "estimated revenues."
  • The total is $5,550,000.

28

What account is synonymous and similar to an authorized spending limit?

The Appropriations Control account, a budgetary account, would be credited for the amount of the authorized spending limit.

29

Assuming no outstanding encumbrances at year's end, closing entries for which of the following situations would increase the unassigned fund balance at year's end?

  • Actual revenues were less than estimated revenues.
  • Estimated revenues exceed actual appropriations.
  • Actual expenditures exceed appropriations.
  • Appropriations exceed actual expenditures.

Appropriations Exceed Actual Expenditures

  • Assuming that both actual and budgetary transactions are closed to the fund balance, closing appropriations, a credit balance account, would increase the fund balance whereas closing expenditures, a debit balance account, would decrease the fund balance.
  • Since appropriations were greater than expenditures, the net effect would be to increase the fund balance.