The Appropriations account of a governmental fund is credited when:

• A. The budget is recorded
• B. Expenditures occur
• C. Revenues are received
• D. Encumbrances are created

Answer: (A)

In governmental fund accounting, appropriations are a budgetary control that reflects the government's authority to spend. When the budget is adopted, the appropriation amount is recorded to show this spending authority, which is done by crediting the appropriations control account. The offsetting debit goes to the related budgetary accounts that capture the anticipated resources and constraints, thereby establishing the framework for subsequent transactions.

Expenditures happen later and reduce the available appropriations as actual spending occurs, so they affect the Expenditures account rather than increasing the appropriations balance. Revenues affect revenue accounts and the resources available, not the appropriation control. Encumbrances are commitments against appropriations and are tracked in separate encumbrance accounts; creating an encumbrance reduces the unencumbered portion of appropriations but does not involve crediting the appropriations control itself.