The City of Southern Pines reported the following at year-end, prior to closing entries: Revenues, $11,000,000; Expenditures, $10,100,000; Other Financing Uses, $500,000; Other Financing Sources, $300,000; Encumbrances, $600,000. As a result of all closing entries, the effect on Fund Balance Unreserved would be:

Question

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The net effect on the Fund Balance Unreserved is calculated as Revenues ($11,000,000) minus Expenditures ($10,100,000) plus Other Financing Sources ($300,000) minus Other Financing Uses ($500,000), resulting in a $700,000 increase. Encumbrances do not affect the Fund Balance Unreserved at year-end.

The City of Southern Pines Reported the Following at Year-End