Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin
FAR STUDY GROUP
 CPAnet Forum : FAR STUDY GROUP
Subject Topic: in my struggle to understand governmental (Topic Closed Topic Closed) Post ReplyPost New Topic
  
Author
Message << Prev Topic | Next Topic >>
CPA_Starter
Regular
Regular


Joined: 12 Dec 2008
Online Status: Offline
Posts: 123
Posted: 10 Jul 2009 at 20:04 | IP Logged  

taxwoman wrote:
I think the entry is:

Dr. Encumbrances $18,000
Cr. Budgetary FB - Reserved for Encumbrances $18,000

The "Budgetary Fund Balance - Reserved for Encumbrances" is a
budgetary account. Like all budgetary accounts, it is a nominal account
(not a real account) and is closed at the end of the accounting period.

If there is an amount in the "Budgetary Fund Balance - Reserved for
Encumbrances" account at the end of the accounting period, that means
goods have been ordered that haven't arrived. For example, if at
December 31, all the purchase orders have been delivered except for
$18,000 worth of goods, there will be a debit balance in "Encumbrances"
of $18,000, and a credit balance in "Budgetary Fund Balance - Reserved
for Encumbrances". The following journal entries illustrate the closing
procedure:

1. Close the budgetary accounts

Dr. Budgetary FB - Reserved for Encumbrances $18,000
Cr. Encumbrances $18,000

2. Reserve part of the REAL fund balance for the orders that will be filled
next year. This is similar to an appropriation of retained earnings for a
for-profit company.

Dr. Fund Balance - Unreserved $18,000
Cr. Fund Balance - Reserved for Encumbrances $18,000





Can u please explain me the how the valuation account works? in
securities transactions we create valuation account can u help me
understand the closing entries?

__________________
" The task ahead of you is never greater than the power behind you."
Back to Top View CPA_Starter's Profile Search for other posts by CPA_Starter
 



Sorry, you can NOT post a reply.
This topic is closed.


<< Prev Page of 2
  Post ReplyPost New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Powered by Web Wiz Forums version 7.9
Copyright ©2001-2010 Web Wiz Guide

This page was generated in 0.1094 seconds.

Copyright 1996-2016 CPAnet/MizWeb Communities All Rights Reserved
Twitter
|Facebook |CPA Exam Club | About | Contact | Newsletter | Advertise & Promote