Which of the following will require a credit to Fund Balance-Unassigned of a governmental fund when operating statement accounts are closed at the end of the year, assuming there are no other financing sources or uses?
A) Revenues are less than expenditures.
B) Revenues are more than expenditures.
C) Revenues are more than expenditures and encumbrances.
D) Revenues are less than expenditures and encumbrances.

Question

Quizplus · Accepted Answer

When revenues exceed expenditures, the difference is added to the fund balance as an increase, hence requiring a credit to Fund Balance-Unassigned. This reflects the positive financial position of the fund at the end of the year.

Which of the Following Will Require a Credit to Fund