You work as the Finance Manager for a company.The company uses Microsoft Dynamics 365 Finance for its accounting system.
A budget was configured at the start of the year for several large projects.
During the budget cycle, the company decides to start a new project.
You need to reallocate funds from the existing budget to the new project.
Which of the following budget codes should you use for the reallocation of the budget funds?
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A. B. C. D. E.A.
To reallocate funds from an existing budget to a new project in Microsoft Dynamics 365 Finance, the budget code that should be used is "Revision."
Explanation of Budget Codes:
Transfer: It is used to move funds between different funds, departments, or cost centers, but not within the same budget. This budget code is not applicable in this scenario as we are not moving funds between different departments or cost centers.
Revision: It is used to change the amount or quantity of an existing budget line item. This budget code allows you to increase or decrease the budget amount for the existing project and allocate the freed-up funds to the new project. Hence, this budget code is suitable for the scenario described in the question.
Encumbrance: It is used to reserve funds for a specific purchase or project. This budget code is not appropriate for this scenario as it is used to reserve funds for a particular purpose and not to reallocate funds from one project to another.
Original Budget: It represents the original budget that was created at the beginning of the fiscal year. This budget code is not applicable in this scenario as we need to modify the existing budget for the project.
Carry-forward budget: It is used to carry over the unspent budget from the previous fiscal year to the current fiscal year. This budget code is not relevant in this scenario as we are not dealing with unspent funds from the previous year.
In conclusion, the budget code that should be used to reallocate funds from the existing budget to the new project in Microsoft Dynamics 365 Finance is "Revision."