When the Budget of a Government Is Recorded and Appropriations

question 73

Multiple Choice

When the budget of a government is recorded and Appropriations exceeds Estimated Revenues, the Budgetary Fund Balance account is:

• A) Credited at the beginning of the year and debited at the end of the year.
• B) Credited at the beginning of the year and no entry is made at the end of the year.
• C) Debited at the beginning of the year and no entry is made at the end of the year.
• D) Debited at the beginning of the year and credited at the end of the year.

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Definitions:

Actual Overhead

Represents the real costs associated with manufacturing overhead, including expenses such as rent, utilities, and equipment maintenance incurred during production.

Overhead Costs

The indirect costs associated with running a business that cannot be linked to a specific product or service.

Direct Materials

Raw materials that can be directly traced to a finished product and are a part of the manufacturing process.

Price Variance

The difference between the actual cost of a good or service and its expected cost, often used in budgeting and financial analysis.