FY2018 Recommended Budget

GLOSSARY OF TERMS

Account – A separate financial reporting unit for budgeting, management, or accounting purposes. All budgetary transactions, whether revenue or expenditure, are recorded in accounts. Accounts Payable – A short term liability account reflecting amounts owed to private persons or organizations for goods and services received by the Town. Accounts Receivable – An asset account reflecting amounts due from private persons or organizations for goods and services furnished by the Town. Accrual Basis – The recording of the financial effects on an entity of cash transactions in the periods in which they occur rather than the periods in which the cash is received. Ad Valorem Taxes – Commonly referred to as property taxes, are levied on the value of real, certain personal, and public utility property according to the property’s valuation and tax rate. Adopted Budget – The budget approved by the Town Board of Commissioners and enacted through a budget ordinance adopted on or before June 30 of each year. Appropriated Fund Balance - The amount of fund balance budgeted as revenue to offset expenses that exceed current revenue. Appropriation – This the legal authorization granted by the Town Council to expend or obligate funds for specific purposes. An appropriation usually is limited in the amount and time that it may be expended. The Council appropriates annually, at the beginning of each fiscal year, by department, based upon the adopted Budget. Additional appropriations may be approved by the Council during the fiscal year by amending the Budget and appropriating the funds for expenditure.

Assessed Value – The value of real estate or personal property as determined by the Wake County Tax Assessor as a basis for levying property taxes. Asset – A probable future economic benefit obtained or controlled by the Town as a result of past transactions or events. Audit – An examination, usually by an official or private accounting firm retained by the Town Council that reports on the accuracy of the annual financial report. Authorized Positions - Employee positions that are authorized in the adopted budget to be filled during the fiscal year. Balanced Budget – Occurs when planned expenditures equal anticipated revenues. In North Carolina, it is a requirement that the budget submitted to the Town Council be balanced. Basis of Accounting & Basis of Budgeting – The system under which revenues, expenditures, expenses, and transfers – and the related assets and liabilities – are recognized in accounts and reported in financial statements. It specifically relates to the timing of the measurements made. Bond – a written promise to pay a designated sum of money (the principal) at a specific date in the future, along with periodic interest at a specified rate. The payment on bonds is identified as Debt Service. Bonds are generally used to obtain long-term financing for capital improvements. Bond Rating – A grade indicating a governmental unit’s investment qualities. Generally speaking, the higher the bond rating, the more favorable the interest rate and the lower the cost of financing of capital projects funded by

bonds. A high rating is indicative of the government’s strong financial position.

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