What distinguishes appropriations from expenditures?

Appropriations are defined as legal authorizations granted by legislative bodies to allocate funds for specific purposes. This means that appropriations establish a limit on the amount of money that can be spent by a government entity within a given fiscal year or period. They serve as a legal framework that ensures funds are allocated according to the priorities set by lawmakers, and without these appropriations, spending cannot legally take place.

In contrast, expenditures represent the actual outflows of funds or payments made to acquire goods and services. While appropriations set the legal boundary for how much can be spent, expenditures are the realizations of this spending. Understanding the distinction between these two concepts is crucial for effective financial management, as appropriations dictate fiscal policy and budgetary limits, while expenditures track the actual use of resources.

Other choices focus on incorrect interpretations or broader concepts that do not accurately define what appropriations are in relation to expenditures.