Exam 3: Issues of Budgeting and Control

A governmental entity has formally integrated the budget into its accounting records.At year-end the ledger account "Revenues from property taxes" has a debit balance.Which of the following is the best explanation for the debit balance?

The accounting cycle for most governments is two to three years, consistent with the terms of elected officials.

State and local governments must prepare their GAAP budgetary comparisons on the modified accrual basis of accounting.

Capital budgets focus on plans for the acquisition and construction of fixed assets.

The City of Lakeview adopts its budget on a basis of accounting that permits outstanding purchase commitments to be charged against the budget in the year that the goods are ordered instead of in the year they are received.During the year the City ordered and received $4,000 of supplies of which $3,000 had been paid and $1,000 was unpaid and had $500 of outstanding purchase commitments for supplies at year-end.In the Statement of Budget to Actual, the expenditures for supplies would be: