What is a budgetary account in governmental accounting?

A budgetary account in governmental accounting is specifically designed to track budgetary transactions. This means it accounts for the planned revenues and expenditures and allows governmental entities to monitor their financial performance against approved budgets. This tracking is essential for ensuring that the organization adheres to its financial plan and manages public funds effectively.

In governmental accounting, these accounts help in controlling spending and improving accountability. By maintaining separate budgetary accounts, governments can assess variances between budgeted and actual amounts, giving them insight into financial management and helping to facilitate decision-making processes.

Budgetary accounts typically don't just concern actual revenues or reconcile differences in forecasts; rather, they focus on the comprehensive record-keeping of both expected revenues and expenditures as per the authorized budget. This function is crucial for governmental units, as they must operate within the parameters set by public policies and approved budgets.