At year-end,a city's expenditures exceed its revenues.When the accounts are closed,which of the following entries will be made to record this fact?

Question

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When a city's expenditures exceed its revenues, it results in a deficit. According to accounting principles, deficits decrease the fund balance. Therefore, a debit entry is made to the fund balance account to reflect the deficit. Options A, C, and D are incorrect, as they do not reflect the decrease in fund balance that a deficit creates.

At Year-End,a City's Expenditures Exceed Its Revenues