On January 1, 2019, a City Adopted a Budget Wherein

Multiple Choice

On January 1, 2019, a city adopted a budget wherein estimated revenues were $30,000 greater than the appropriations. Because of a slowdown in the economy, it became apparent in June that there would be a shortfall of $25,000 in sales tax collections. The city amended its budget to take account of the reduction in estimated sales tax collections. What journal entry should the city make in June?

A) Debit Revenues-sales tax and credit Estimated revenues-sales tax for $25,000
B) Debit Appropriations and credit Estimated revenues-sales tax for $25,000
C) Debit Estimated revenues-sales tax and credit Revenues-sales tax for $25,000
D) Debit Budgetary fund balance and credit Estimated revenues-sales tax for $25,000