Question

the school district adopts a budget calling for total revenues of $390 million and total expenditures of $390 million. after recording the estimated revenues and appropriations, the impact to the fund balance will be: a debit of $390m a credit of $ 400 a net credit of $10m a net debit of $0m

Answer 1

When a school district has a balanced budget with equal revenues and expenditures, the fund balance impact is a net debit of $0 million. For the national government scenario, after running deficits and surpluses, the estimated government debt would be $95 billion.

Step-by-step explanation:

The student's question pertains to the impact on the fund balance when a school district adopts a budget with equal total revenues and expenditures. If the total revenues and total expenditures are both $390 million, it means that the budget is balanced. In such a case, there would be neither a surplus nor a deficit, and thus the impact on the fund balance would be a net debit of $0 million, as the budget is perfectly balanced with no excess or shortfall.

Regarding the numerical problem related to the government budget, if the government runs a budget deficit of $10 billion each year for ten years, this adds up to $100 billion of debt. Then, with a surplus of $1 billion for five years, the debt is reduced by $5 billion. Therefore, by the end of the subsequent five years, the government debt would be $95 billion. The continuation of a balanced budget for another ten years means no additional debt is accumulated. Consequently, the government debt remains at $95 billion.