Question

Which of the following accounts would not be closed at the end of each fiscal year?

• Fund balance.

• Estimated revenues.

• Interfund transfers out.

• Expenditures.

Answer 1

Answer: Fund Balance

At the end of the company's fiscal year, all the temporary accounts are closed because these accounts accumulate balance for a single fiscal year .Most common temporary accounts are revenue, expenses, gains, losses - essentially those appearing in the income statement.

On the other hand, all the permanent accounts are not closed at the end of the fiscal year as these accounts accumulate balances on an ongoing basis through many fiscal years. Most common types of such accounts are those appearing in the balance sheet like asset, liability and equity accounts.

Since fund balance account is of permanent nature, therefore it will not be closed at the end of the company's fiscal year.