[grandia01]

The following information pertains to Pine City’s general fund for the current year:

Appropriations $6,500,000
Expenditures $5,000,000
Other financing sources $1,500,000
Other financing uses $2,000,000
Revenues $8,000,000

After Pine’s general fund accounts were closed at the end of the year, the unassigned fund balance increased by: (the correct answer is $2,500,000 – can anyone explain to me how this figure came into existence please??)

as always thank you for your time!! 🙂

[Andyred04]

Income:
Revenues $8,000,000
Other Financing Sources $1,500,000

Outflow:
Expenditures $5,000,000
Other Financing Uses $2,000,000

$9,500,000 – 7,000,000 = $2,500,000

The only thing I'm struggling to recall from way back when I studied FAR is why the unassigned fund balance wouldn't reduce due to the appropriations. However, if I do recall correctly, appropriations go away when the general fund accounts are closed. Hopefully, someone can check me on that.

FAR: 80 (Gleim, Ninja Notes, Ninja MCQs)
REG: 87 (Gleim, Ninja Notes, Ninja MCQs)
BEC: 87 (Gleim, Ninja Notes, Ninja MCQs)
AUD: 8/27/16

PA Candidate

[MINO21c]

Appropriation is the highest amount of budget allocated for expenditure, so appropriation account is closed at the end of a period.

BEC 7/12 - PASS
REG 8/17
AUD 9/8
FAR 10/15

[grandia01]

got it!! thank you Andyred04 and MINO21c for helping me out. much highly appreciated.

[Author]

Replies