Account For Budgetary Entries Practice Test

A state government receives a restricted motor fuel tax that is legally required to be used for street maintenance, and it adopts a legally adopted budget for that activity. Under GASB guidance, which fund would most appropriately account for the budgetary entry and related revenues and expenditures for this restricted resource?

A local government’s General Fund had a legally adopted annual budget under GASB guidance with estimated revenues of $12,000,000, appropriations of $12,300,000, and a planned use of beginning fund balance of $300,000. Midyear, the city council approves a budget amendment due to a revenue shortfall that reduces estimated revenues by $500,000 and reduces appropriations by $200,000 (the remainder will be covered by additional planned use of fund balance). What journal entry should be recorded in the General Fund to reflect the budget amendment?