A county adjusts charges for services downward by 100,000 and increases public safety expenditures by 150,000. What is the effect on Budgetary Fund Balance?

• A. Credited $250,000
• B. Debited $50,000
• C. Debited $500,000
• D. Debited $250,000

Answer: (D)

In governmental budgeting, the Budgetary Fund Balance reflects the portion of the budget that remains available based on the adopted budget, and it moves with estimated revenues and appropriations. Decreases to estimated revenues reduce Budgetary Fund Balance, while increases in appropriations (expenditures) also reduce it.

Here, downgrading charges for services by 100,000 reduces estimated revenues by that amount, which lowers Budgetary Fund Balance by 100,000. Simultaneously, increasing public safety expenditures by 150,000 raises the planned uses of funds, which also reduces Budgetary Fund Balance by 150,000. Net effect: Budgetary Fund Balance decreases by 250,000, recorded as a debit.