Note: This Is a Kaplan CPA Review Question

question 75

Multiple Choice

Note: This is a Kaplan CPA Review Question
The Board of Commissioners of Vane City adopted its budget for the year ending July 31, comprising estimated revenues of $30,000,000 and appropriations of $29,000,000. Vane formally integrates its budget into the accounting records. What entry should be made for budgeted revenues?

• A) Memorandum entry only.
• B) Debit ESTIMATED REVENUES CONTROL, $30,000,000.
• C) Debit ESTIMATED REVENUES RECEIVABLE CONTROL, $30,000,000.
• D) Credit ESTIMATED REVENUES CONTROL, $30,000,000.

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Definitions:

Government's Budget Deficit

A situation where a government spends more than it earns in revenue over a specific period.

Federal Tax Revenues

Money collected by the government from taxes imposed on individuals and businesses that is used to fund public services and programs.

Deadweight Loss

The reduction in economic efficiency that happens when a good or service does not reach or cannot reach its equilibrium.

Efficient Tax System

A tax system that collects required revenue without excessive government borrowing, and does so in a way that does not impede economic growth.