What is the first recording step for the general fund?

The first recording step for the general fund is appropriations. This step involves the legal authorization of spending by the governing body, such as a city council or board of trustees. Appropriations set the fiscal framework for the government or nonprofit entity by specifying the amounts that can be spent for various purposes and establishing budgetary controls to ensure that expenditures do not exceed these authorized amounts.

When appropriations are recorded, they create a commitment for the government to spend funds within the specified limits, which is essential for effective financial management. Subsequently, further actions such as encumbrances (to reserve appropriated funds) and expenditures (actual outflows of funds) will follow this initial recording step. This systematic approach helps maintain accountability and ensures that resources are allocated according to the approved budget, ultimately making the appropriations process a foundational element in governmental accounting for the general fund.