Choice "B" is correct. When property taxes are levied, the following journal entry is made:
| Debit (Dr) | Credit (Cr) |
|---|
| Property taxes receivable | $ XXX | |
| Allowance for uncollectible property taxes | | $ XXX |
| Revenues | | XXX |
Thus, revenue control account is increased when property taxes are levied.Choice "a" is incorrect. When the encumbrance account is decreased, the following internal entry is made:
| Debit (Dr) | Credit (Cr) |
|---|
| Budgetary Control | $ XXX | |
| Encumbrances | | $ XXX |
Thus, revenue control account is not affected.Choice "c" is incorrect. When appropriations are recorded, the following entry is made:
| Debit (Dr) | Credit (Cr) |
|---|
| Fund balance | $ XXX | |
| Appropriations | | $ XXX |
This is part of the budget entry, revenue control account is not affected.Choice "d" is incorrect. When the budget is recorded, the following entry is made:
| Debit (Dr) | Credit (Cr) |
|---|
| Estimated revenues | $ XXX | |
| Appropriations | | $ XXX |
| Fund balance | | XXX |
This is part of the budget entry, revenue control account is not affected.
