Disable ads (and more) with a membership for a one time $2.99 payment
When closing budgetary accounts at year-end, what action should be taken with the appropriations control account balance?
It should appear as a contra account
It should be credited
It should remain open
It should be debited
The correct answer is: It should be debited
At year-end, closing budgetary accounts involves resetting the balances to prepare for the new fiscal period. The appropriations control account represents the amount of budgeted appropriations available for expenditure. To close this account, the balance needs to be debited, which effectively reduces the appropriations control account to zero. This action reflects the conclusion of the current year's appropriations and allows for the establishment of new budget appropriations in the upcoming year. Closing the appropriations control account by debiting is a standard practice in governmental accounting, where budgetary accounts are used to monitor expenditures and ensure they do not exceed appropriated amounts. By debiting the appropriations control account, the budgetary controls are properly reset, ensuring that the new budget can start with a clean slate. This closing entry helps maintain the integrity and accuracy of the budget process for the subsequent period.