[calicpa]

I thought budgetary fund balance doesn’t have a “normal balance” so how can it increase or decrease. The solution says that A decreases it and D would increase it.

Assuming no outstanding encumbrances at year’s end, closing entries for which of the following situations would increase the unassigned fund balance at year’s end?

A. Actual revenues were less than estimated revenues.

B. Estimated revenues exceed actual appropriations.

C. Actual expenditures exceed appropriations.

D. Appropriations exceed actual expenditures.

D is Correct!

Assuming that both actual and budgetary transactions are closed to the fund balance, closing appropriations, a credit balance account, would increase the fund balance whereas closing expenditures, a debit balance account, would decrease the fund balance.

Since appropriations were greater than expenditures, the net effect would be to increase the fund balance.

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

bump

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

bump

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[Soon2BaCPA]

The budgetary accounts (i.e., estimated revenues and expenditures) don't affect the fund balance. They're just a budget.

A. Actual revenues were less than estimated revenues. – Actual revenues came in under budget.

B. Estimated revenues exceed actual appropriations. – In this case they don't tell you anything about actual revenues.

C. Actual expenditures exceed appropriations. – In this case expenditures were OVER budget.

D. Appropriations exceed actual expenditures. – In this case the entity spent LESS than they planned to and the difference is available to be spent in the upcoming year on something else (i.e., it's unassigned fund balance)

Hope that helps.

[Soon2BaCPA]

The budgetary accounts (i.e., estimated revenues and expenditures) don't affect the fund balance. They're just a budget.

A. Actual revenues were less than estimated revenues. – Actual revenues came in under budget.

B. Estimated revenues exceed actual appropriations. – In this case they don't tell you anything about actual revenues.

C. Actual expenditures exceed appropriations. – In this case expenditures were OVER budget.

D. Appropriations exceed actual expenditures. – In this case the entity spent LESS than they planned to and the difference is available to be spent in the upcoming year on something else (i.e., it's unassigned fund balance)

Hope that helps.

[calicpa]

ya it did. thanks a lot!

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

ya it did. thanks a lot!

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[Author]

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