What is the budgeting equation for Budgetary Accounting?

• A. Obligations = Outlays
• B. Budget Authority = Status of Resources
• C. Unused Balance = Status of Resources
• D. Resources = Status of Resources

Answer: (D)

In budgetary accounting, the balance you track is between the resources available and how those resources are currently categorized in status. Resources represent the budgetary resources available, while the Status of Resources shows where those resources currently sit—unobligated, obligated, and outlays, reflecting their availability and use. The budgeting equation Resources = Status of Resources expresses that the total resources you have must equal the total recorded in their status categories, keeping the accounting in balance.

Obligations = Outlays would imply these two spending stages are equal, which isn’t true since obligations precede and don’t always equal actual disbursements. Budget Authority = Status of Resources mixes a financing source with a status category rather than stating the balancing relationship. Unused Balance = Status of Resources narrows to just part of the status, not the whole balance represented by Resources.