Question

When Rolan county adopted its budget for the year ending June 30, year 1, $20 million was recorded for estimated revenues control. Actual revenues for the year ended June 30, Year 1, amounted to $17 million. In closing the budgetary accounts at June 30, Year 1,

a. Revenues control should be debited for $3 million
b. Estimated revenues control should be debited for $3 million
c. Revenues control should be credited for $20 million
d. Estimated revenues control should be credited for $20 million

Answer 1

Answer: d. Estimated revenues control should be credited for $20 million

Explanation: The estimated revenue control of Rolan County which amounts to $20 million will be a debit upon adoption as it an anticipatory asset. Therefore when closing the budgetary account, the estimated control revenue will be credited for the initial debited amount of $20 million since no entries are made to them when the closing budget entry is being made.