A Public School District Formally Adopted a Budget with Estimated

question 55

Multiple Choice

A public school district formally adopted a budget with estimated revenues of $800 and approved expenditures of $780. Which of the following is the appropriate entry to record the budget?

• A) Debit Estimated revenues $800; Credit Appropriations $780; Credit Fund balance $20.
• B) Debit Appropriations $780; Debit Fund balance $20; Credit Estimated revenues $800.
• C) Debit Encumbrances $780; Debit Fund balance $20; Credit Estimated revenues $800.
• D) Memorandum entry only.

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Definitions:

Accounting Break-even

The point at which total revenues exactly equal total expenses, and there is no profit or loss, from an accounting perspective.

Financial Break-even

The point at which total revenue equals total costs and expenses, leaving the company with no net profit or loss.

Variable Cost

Costs that move in correspondence with the quantity of products made or services sold.

Fixed Costs

Expenses that do not vary with production volume or business activity level, such as rent, salaries, and insurance premiums.