Interim Budgetary Comparison Statement

An interim budgetary comparison statement for a governmental fund is found in Illustration 3-8.

(a) Should this statement be prepared on the unit's budgetary basis or on the GAAP basis? Why?

(b) Why are interim budgetary comparison statements important to effective management control and legislative oversight?

City council Goods and services approves the fiscal City departments are received and year budget for the issue purchase orders invoices are presented General Fund for goods and for payment services Journal Entries - Budgetary Accounts Estimated Revenues .... Dr Encumbrances Control .... Dr Budgetary Fund Balance- Estimated Other Budgetary Fund Balance- Reserve for Encumbrances... Dr Financing Sources .... Dr Reserve for Encumbrances... Cr Encumbrances Control ...... Cr Appropriations ........... Cr Estimated Other To establish the encumbrance To reverse the encumbrance Financing Uses ... Cr Budgetary Fund Balance... Cr Record the budget Journal Entries - Financial Statement Accounts Expenditures (Current) ... Dr No entry No entry Accounts Payable ........ Cr To record the liability