The journal entry to record budgeted revenues includes which of the following?

• A. A debit to Estimated Revenues
• B. A credit to Estimated Revenues
• C. A debit to Estimated Expenditures
• D. A credit to Estimated Expenditures

Answer: (A)

Budgetary accounting records the planned resources separately from actual activity, using control accounts to manage the adopted budget. The Estimated Revenues account is used to represent the amount the government expects to collect in the budget. Since this is an anticipated resource, the budget setup increases this control by a debit, with the offset going to a budgetary fund balance account that shows the portion reserved for those estimated revenues. This reflects that these resources are planned and available for appropriation, even though they have not yet been earned. A credit to Estimated Revenues would not represent the initial budgeting of resources, and entries involving Estimated Expenditures pertain to actual spending or appropriations later in the process, not the budget adoption of revenues.