Which of the following statements reflects the adopted budget with a credit to Appropriations?

• A. Debit to Estimated Revenues
• B. Debit to Expenditures
• C. Credit to Budgetary Fund Balance
• D. Credit to Appropriations

Answer: (D)

When a government adopts its budget, it records the authorization to spend by crediting the appropriations control account. This shows that the legislative body has approved spending up to a certain amount. The offsetting entry is a debit to Estimated Revenues, reflecting the expectation that resources will be available to fund those appropriations. Debiting Expenditures would imply that spending has already occurred, which isn’t the case at budget adoption. Crediting Budgetary Fund Balance isn’t the standard way to capture the act of adopting the budget; the proper reflection of the authorization is the credit to Appropriations. So, the statement describing a credit to Appropriations best matches the budget adoption entry.