ACCY161_Sp11_Notes03_Comments

ACCY161_Sp11_Notes03_Comments - ACCY 161 Spring 2011 Notes...

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ACCY 161 – Spring 2011 Notes #3 Comments: Budgetary Accounting ACCY161_Notes03_Comments Page 1 of 2 Here is the section of the notes from Tuesday, September 7 th with comments: A. Record the budget The #’ s in the t-accounts represent the following transactions: (page 87/81) 1. Revenue Budget - $600 2. Appropriations Budget - $550 3. Revenue collections - $550 4. Encumbrance entry - $400 – that occurs when purchase orders are issued and is an estimated amount 5. Expenditure entry - $425 – the actual invoice is $25 higher than the related purchase order. When this happens we reverse the encumbrance for the related estimated amount – entry 5b. 6. Supplemental appropriation is made for the $25 7. Additional revenue is collected for $100 Other Notations: BB – Beginning Balances Bal – Account Balance Assets (Cash for here) = Liabilities (AP for here) + Fund Balance and Budgetary Fund Balance BB 500 = 300 BB + 200 BB #3 650 425 #5a 600 #1 #2 550 250 1 Bal Estimated Revenues 2 Appropriations Encumbrances 3 #1 600 550 #2 #4 400 400 #5b Bal 4 0 Expenditures Actual 5 Revenue Reserve for Encumbrances 6 #5a 7 425 650 #3 400 #4 #5b 8 400 Other Notes: 1. We cover closing entries in Chapter Nine 2. We cover government-wide entries in Chapter Four, these entries are for fund accounting only. 1 The $250 in the Fund Balance account becomes what the authors call the “budgetary fund balance” or the “target balance” – it is the budgeted balance for the end of the year. In the 15ed text they use the term “Budgetary Fund Balance” but not in the
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ACCY161_Sp11_Notes03_Comments - ACCY 161 Spring 2011 Notes...

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