Certified Building Official Management Practice Exam

In a budget, what are the two types of accounts?

1. Operating funds and capital funds

2. Revenue sources and expenditure types

3. Estimated revenues and appropriations

4. Fixed assets and liabilities

The correct answer is: Estimated revenues and appropriations

In the context of budgeting, the two types of accounts typically recognized are estimated revenues and appropriations. Estimated revenues refer to the funds that are anticipated to be received during a specific period, essentially projecting various income streams based on previous data and expectations of future performance. This can include sources like taxes, grants, or fees for services. Appropriations, on the other hand, are the specific amounts of money that are allocated for particular expenditures or projects within the budget. This designation ensures that the funds are set aside and can only be used for those designated purposes, helping in maintaining control over the spending of available resources. By utilizing these two types of accounts—estimated revenues to anticipate incoming funds and appropriations to allocate those funds—organizations can create a balanced and effective budget that aligns with their anticipated operations and financial commitments.