Explanation for
Closing Budgetory accounts:
- There are
usually two type of entries into the budgetary
accounts:
- Entry to Set up the Budget in the begining of the year
- Entry to close the Budget at the end of the year
- If there have been no changes to the budget during the year,
the entry to close the budgetary accounts at the end of the fiscal
period simply reverses the original entry.
- If there have been changes to the original budget, remember
that the purpose of the entry is to close the balances i.e. making
it to zero out in the budgetory accounts.
Explanation for
Closing encumbrances accounts:
- The encumbrances account is closed to Fund balance -
Unassigned.
- The reserve for encumbrances account is a balance sheet account
and so technically not closed. But we do reclass the reserve for
encumbrance account to Fund balance-Assigned.
answered by: anonymous