At year-end,budgetary authority expires and the balances of Expenditures and Encumbrances accounts are closed to

Question

Quizplus · Accepted Answer

Budgetary authority expires at the end of the fiscal year, and any unspent funds from the Appropriations accounts are no longer available for spending. Therefore, any remaining balances in the Expenditures and Encumbrances accounts should be closed and transferred to the Fund Balance account to reflect the true financial position of the government entity. The Fund Balance account represents the residual net assets of the government, which can be used for future expenditures or transferred to other funds as appropriate. Choices B, C, and D are not the best options because Net Assets represents the residual equity of a private sector entity, and Other Financing Uses or Sources are typically used for non-operating transactions or debt-related activities, which do not reflect the actual use of budgetary resources.

At Year-End,budgetary Authority Expires and the Balances of Expenditures and Encumbrances