Budgetary Accounting and Encumbrances

Free CPA BAR (Business Analysis & Reporting) lesson in State and Local Governments. 19 min read, ~2,779 words.

Only appropriated (legal) budgets are recorded in the general ledger; flexible and performance budgets are internal planning tools that never hit the accounts. Budgetary entries use contra accounts: Estimated Revenues (debit), Appropriations (credit), and Budgetary Fund Balance to plug the difference. Budget amendments are recorded as separate entries that adjust...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• III.C8

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