What is the journal entry to record a budget deficit?
Under budgetary accounting (governmental funds only), the individual funds will always record their “estimated revenues” — always debited (the $850,000). This will always be credited with appropriation control which represents the total amount that the government has set aside to spend (the $1,000,000).
Therefore, the budget control is going to represent the difference between the governmental unit’s cash inflow (estimated revenue) and its cash outflow (appropriations). If they expect to generate more revenue than they set aside to spend, it will be debited, and if they set aside to spend more than they expect to bring in it will be credited.
In a budget deficit, the entity expects to spend more than they will bring in, so there is a debit to budgetary control for $150,000.
Make sure you understand the journal entry for a budget surplus!
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You might also be interested in... What are derived tax revenues in budgetary accounting?
Derived tax revenues will result from an assessment imposed by governments based on exchange transactions (e.g. personal income tax, sales tax etc.) The primary characteristics of derived tax revenues consist of: 1) The assessing government will impose the provision of resources on the provider. 2) The government’s assessment is on an exchange transaction.
What is the difference between a surplus and a deficit in budgetary accounting?
In budgetary accounting, a surplus will exist if estimated revenues exceed the amount of formally approved expenditures. A deficit will exist if estimated revenues are less than the amount of formally approved expenditures. The visual below shows how you can easily calculate a surplus or deficit!
In budgetary accounting, what are the two methods that can be used to record expenditures?
Expenditures are considered to be a governmental funds allocation of its funding dollars on expenses. The expenditure will be recorded when the voucher payable is recorded (full accrual). The modified accrual basis of accounting will not delay the expenditures until the cash payment is made. The two allowable methods are the purchase method and consumption...
What are derived tax revenues in budgetary accounting?
Derived tax revenues will result from an assessment imposed by governments based on exchange transactions (e.g. personal income tax, sales tax etc.) The primary characteristics of derived tax revenues consist of: 1) The assessing government will impose the provision of resources on the provider. 2) The government’s assessment is on an exchange transaction.
What is the difference between a surplus and a deficit in budgetary accounting?
In budgetary accounting, a surplus will exist if estimated revenues exceed the amount of formally approved expenditures. A deficit will exist if estimated revenues are less than the amount of formally approved expenditures. The visual below shows how you can easily calculate a surplus or deficit!
In budgetary accounting, what are the two methods that can be used to record expenditures?
Expenditures are considered to be a governmental funds allocation of its funding dollars on expenses. The expenditure will be recorded when the voucher payable is recorded (full accrual). The modified accrual basis of accounting will not delay the expenditures until the cash payment is made. The two allowable methods are the purchase method and consumption...
