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.

---

Definitions:

Standard Costing

A cost accounting system that uses pre-determined costs to value the cost of goods sold and assess the performance.

Labour Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected for the level of production achieved, often indicating productivity levels.

Variable Overhead

Costs that vary with the level of production output, such as utilities for a manufacturing plant, which increase with more production.

Labour Rate Variance

The difference between the actual cost of labor and its expected cost based on standards set for production.