Budgetary Accounting Journal Entries
Budgetary accounting involves recording, tracking, and managing budgeted amounts versus actual amounts to ensure financial control and accountability within an organization. Here are some common journal entries related to budgetary accounting:
Scenario: Setting Up a Budget and Recording Transactions
- Establishing the Budget
- Recording Actual Revenues
- Recording Actual Expenditures
- Adjusting Budgetary Accounts
Journal Entries for Budgetary Accounting
Example 1: Establishing the Budget
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Estimated Revenues A/c | 500,000 | |
| To Budgetary Fund Balance A/c | 500,000 | |
| (Being budgeted revenues recorded) |
Appropriations A/c | 400,000 |
To Estimated Expenditures A/c | | 400,000
(Being budgeted expenditures recorded) | |
Example 2: Recording Actual Revenues
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Cash/Bank A/c | 150,000 | |
| To Revenues A/c | 150,000 | |
| (Being actual revenues received) |
Example 3: Recording Actual Expenditures
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Expenditures A/c | 120,000 | |
| To Cash/Bank A/c | 120,000 | |
| (Being actual expenditures paid) |
Example 4: Adjusting Budgetary Accounts
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Estimated Revenues A/c | 100,000 | |
| To Budgetary Fund Balance A/c | 100,000 | |
| (Being adjustment to increase estimated revenues) |
Appropriations A/c | 50,000 |
To Estimated Expenditures A/c | | 50,000
(Being adjustment to increase appropriations) | |
Detailed Examples:
Example 5: Reallocation of Budget
Assume a reallocation of ₹30,000 from one department's budget to another.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Appropriations - Dept A A/c | 30,000 | |
| To Appropriations - Dept B A/c | 30,000 | |
| (Being reallocation of budget between departments) |
Example 6: Lapsing of Appropriations
At the end of the fiscal year, any unspent appropriations may lapse.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Appropriations A/c | 20,000 | |
| To Budgetary Fund Balance A/c | 20,000 | |
| (Being lapsing of unspent appropriations) |
Additional Example:
Example 7: Budgetary Fund Balance Adjustments
Adjustments to the budgetary fund balance due to changes in budget estimates.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Budgetary Fund Balance A/c | 10,000 | |
| To Estimated Revenues A/c | 10,000 | |
| (Being decrease in estimated revenues) |
These examples illustrate how budgetary accounting journal entries can be used to manage and monitor financial activities against the set budget. The entries help maintain control over financial resources and ensure compliance with budgetary constraints.
