Page 99 - Forest Hill FY21 Annual Budget

Fore�Hill

GlossaiJ

The City of Forest Hill Adopted Budget contains specialized and technical tenninology that is unique to
public finance and budgeting. To help both City departments and the general citizenry understand the
tenninology used during the budget process, this glossary is included in the adopted and published budget
document as a reference.

Accrual Accounting: A basis of accounting in which revenues are recognized in the period in which they
are earned and become measurable, and expenses are recognized in the period incurred instead of when cash
is actually received or spent. For example, in accrual accounting, revenue that was earned between June 1
and September 30, but for which payment was not received until October I through November 30, is
recorded as being received on September 30 rather than October I through November 30.

Appropriation: A legal authorization made by the City Council that permits the City to make expenditures
and to incur obligations for specific purposes. An appropriation is usually limited in amount and the time in
which it may be expended.

Appropriation Ordinance: The official enactment by the City Council to establish legal authority for City
officials to obligate and expend resources.

Assessed Valuation: A value that is established for real or personal property for use as a basis for levying
property taxes.

Audit: A comprehensive examination of how an organization's resources were actually utilized, concluding
in a written repot1 of the findings. A financial audit is a review of the accounting system and financial
infonnation to detennine how government funds were spent and whether expenditures were in compliance
with the legislative body's appropriations. A perfonnance audit consists of a review of how well the
organization met its stated goals.

Balanced Budget: A budget in which planned expenditures can be met by current income from taxation
and other central government receipts

Bond: An interest-bearing ce11ificate of debt; a w1itten contract by an issuer to pay to the lender a fixed
principal amount on a stated future date and a series of interest payments on the principal amount until it is
paid.

Budget: A financial plan for a specified period of time (i.e. a fiscal year) that includes all planned
expenditures for various municipal services and the proposed means of financing them.

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