In the Excel spreadsheet approach in Appendix 10B in the text, each variance has its own clearing account that appears on the right-hand side of the "=" sign. This enables us to record all favorable variances as increases to their respective clearing accounts and all unfavorable variances as decreases to their accounts.

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This is true as the clearing accounts are used to accumulate the variances and show the net impact on the overall budget. Favorable variances are recorded as increases to these accounts and unfavorable variances are recorded as decreases to the accounts.

In the Excel Spreadsheet Approach in Appendix 10B in the Text