ENTRIES MADE PRIOR TO CLOSING

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Cathleen Harmon
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1 ENTRIES MADE PRIOR TO CLOSING There are a few entries that should be done before the end of the fiscal year that will make the closing process a little smoother. Included are some examples for your reference. We will be going over a fund check form. This form can be used on a monthly or quarterly basis to assist you with the clearing of suspense accounts. Illustrated are some common problems and how to make the corrections. 4.1 June 2014

2 PREPAID EXPENSE Account Payments made in advance of the receipt and use of services. STEP 1 Reverse (or adjust) any prior year closing entries using the TRNADJ screen. Insurance premiums paid in the Prior Fiscal Year for the Current Fiscal Year of $1,500 The accrual entry in the Prior Fiscal Year was: Res Goal Func Obj DR Prepaid Expense xxxx ,500 CR Insurance xxxx xxxx xxxx ,500 The reversing entry in the Current Fiscal Year is: Res Goal Func Obj DR Insurance xxxx xxxx xxxx ,500 CR Prepaid Expense xxxx ,500 STEP 2 Establish Current Fiscal Year accrual. This will be done after June 30. Use the FYTRN screen with 06/30/XX (Current Fiscal Year) date. Insurance premiums paid in the Current Fiscal Year for the Subsequent Fiscal Year of $2,000 Res Goal Func Obj DR Prepaid Expense xxxx ,000 CR Insurance xxxx xxxx xxxx , June 2014

3 UNEARNED REVENUE Object 9650 Revenue which has been received, but is unearned, as of June 30. Complete the FORM CAT to determine amount of unearned revenue. GASB 65 STEP 1 The use of the term Deferred should be limited to items reported as deferred outflows of resources or deferred inflow of resources. Thus when discussing activity in 9650 we will use the term unearned. Reverse any remaining prior year closing entries. This reversal must be posted with a journal entry (TRNADJ in FIS) before June 30. Please remember to use the correct resource numbers when reversing the prior year s closing entries. Example Title I revenues exceeded expenditures on Form CAT for the Prior Fiscal Year causing the unearned revenue to be recognized in the Current Fiscal Year. The unearned revenue entry in the Prior Fiscal Year was: Res Obj DR All Other Federal Revenue $3,000 CR Unearned Revenue $3,000 The reversing entry in the Current Fiscal Year is: Res Obj DR Unearned Revenue $3,000 CR All Other Federal Revenue $3,000 STEP 2 Example Establish the Current Fiscal Year closing entry. Use a journal (FYTRN in FIS) with a June 30 date (Current Fiscal Year) to post this entry. Title I revenues exceeded expenditures on Form CAT for the Current Fiscal Year so excess revenue must be deferred to the Subsequent Fiscal Year. Res Obj DR All Other Federal Revenue $3,500 CR Unearned Revenue $3, June 2014

4 ESTABLISHING DUE TO/DUE FROM ACCOUNTS Step 1 Make sure that all expenditures are accounted for in the proper fund. If one fund owes another fund at year-end, establish a due to/due from account. (See Sample 1) Object DUE FROM - (Asset) amount due from another district fund. Object DUE TO - (Liability) amount due to another district fund. The Due To (9611) in one district fund must equal the Due From (9311) in another district fund or the district general ledger will be out of balance. A tip when establishing Due To/Due From's is to use sub-accounts. Step 2 EC requires that prior fiscal year due to/due from accounts must be repaid the same fiscal year, or in the following fiscal year if the transfer takes place within the final 120 calendar days of a fiscal year. Account numbers 9311/9611 rolling over into the beginning balances for the subsequent fiscal year will change to 9312/9612. Process an auditor s transfer to clear the current fiscal year 9312/9612 s. (See Sample 2) Object DUE FROM - (Asset) amount due from another district fund - PY. Object DUE TO - (Liability) amount due to another district fund - PY. 4.4 June 2014

5 ATTENTION San Diego County Office of Education ACCOUNTING SECTION JOURNAL ENTRY Sample 1 (Posting Document) XYZ School L DOCUMENT # J DATE XX DISTRICT NUMBER 02 I N ACCOUNT NUMBER E DEBIT CREDIT REFERENCE FUND-SUB RESRCE-SUB GOAL FUNC-SUB OBJ-SUB SCH LOC COST PJ-YR XXXX , CAFE REIMB/JUNE XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX XXXX-XXX XXXX XXXX XXXX-XXX XXXX XXXX , TO REIMB G/F JUNE XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX , XXXX-XXX XXXX XXXX XXXX-XXX XXXX XXXX XXXX , PLEASE NOTE: DO NOT EXCEED 18 LINES PER PAGE. EXPLANATION: ESTABLISH "DUE TO/DUE FROM" FOR FOOD SERVICES JUNE 20XX REIMBURSEMENT COUNTY OFFICE USE ONLY Prepared By: Date: Input date: Approved By: WHITE - SDCOE Form Financial Acctg. CANARY - SDCOE San Diego County Office of Educ Carbonless Form PINK - School 4.5 June 2014

6 Sample 2 COUNTY OFFICE USE ONLY ATTENTION San Diego County Office of Education Auditor Date: ACCOUNTING SECTION Entered: Date: (Posting Document) REQUISITION ON COUNTY AUDITOR Office of Educ. Date: PAGE 1 of 1 FOR INTERFUND CASH TRANSFER Reference: A00 COUNTY AUDITOR USE ONLY FUND NO ACCOUNT NUMBER DIST. DISTRICT OR DEBIT CREDIT 9110 CASH NO. FUND NAME ORACLE # (No Post FA) Fund-Sub Resrce-Sub Goal Func-Sub Objt-Sub Sch Loc Cst PjYr 02 XYZ 5XXXX 31, , XXXX NOTE: ACCOUNT NUMBERS 9311/9611 ARE USED FOR CLOSING ENTRIES DURING THE CURRENT FISCAL YEAR. BEGINNING BALANCE ACCOUNT NUMBERS FOR THE SUBSEQUENT FISCAL YEAR ARE 9312/9612 RESPECTIVELY. COUNTY AUDITOR USE ONLY FUND NO ACCOUNT NUMBER DIST. DISTRICT OR DEBIT 9110 CASH CREDIT NO. FUND NAME ORACLE # (No Post FA) Fund-Sub Resrce-Sub Goal Func-Sub Objt-Sub Sch Loc Cst PjYr 02 XYZ 5XXXX 31, , XXXX EXPLANATION: REF: FD FR FD Examined, Approved, and Allowed PHONE NUMBER: CLEAR PRIOR YEAR "DUE TO/DUE FROM". REIMBURSE GENERAL FUND FOR CAFETERIS FUND EXPENSES. Date: 7/13/XX BY: BOARD APPROVAL DATE: July 10, 20XX. Deputy Superintendent of Schools Requisition Authorized By: Deputy Auditor and Controller Form 290d - Financial Acctg San Diego County Office of Education 4.6 June 2014

7 Fund Check XYZ Funds in Use * 03-00, 06-00, 14-00, 25-19, Watch for Sub-codes. *Check DDACCT **Check GLTRBL ***Check REVINQ and EXPINQ On-Line ** ** ** ** ** ** ** *** *** Normal Balance Dr Cr Dr Cr Dr/Cr Cr Dr Dr/Cr Dr/Cr Dr/Cr Date Init Fund / / Comments , , , , , , Collection Advice (INCREC) posted incorrectly. posted Collection Advice (INCREC) to Fund as $127 instead of $172 DR 9140 $127 CR $127 FA posted Deposit Permit (DPOSIT) to Fund DR 9110 $172 CR $127 CR $45 Use TRNADJ to correct entry. (See sample #1 on next page). 2. Accruals must balance (net to zero). (See sample #2 on next page). 3. Suspense items must be cleared. (See sample #3 on next page). 4.7 June 2014

8 FUND CHECK CORRECTIONS 1. Use TRNADJ screen to correct collection advice posting: Account DR CR Fund Res Obj Revenue Suspense xxxx 8681 Developer Fees To balance accruals, adjust 9202/9511; never change 9201 or 9510: Account DR CR Fund Res Goal Func Obj xxxx 8XXX Revenue 1, xxxx 9202 A/R - Collections 1, xxxx 9511 C/L - Payments xxxx xxxx xxxx 4XXX Books & Supplies xxxx xxxx xxxx 5XXX Svcs/Oper. Exp Use TRNADJ screen to clear cafeteria suspense and balance accrual: Account DR CR Fund Res Obj Revenue Suspense 7, xxxx 9202 A/R-Collections 7, June 2014

9 Fund Check Funds in Use * Watch for Sub-codes. *Check DDACCT **Check GLTRBL ***Check REVINQ AND EXPINQ On-Line** ** ** ** ** ** ** *** *** Date Init Fund / / Comments 4.9 June 2014

10 CLEARING APPORTIONMENT SUSPENSE Total of Apportionment Auditor Transfer posted by Financial Accounting to suspense through 06/30: Example 1 Posted to Suspense from Feb to June Fund Res Obj DR CR Suspense (PY) $ 51, Cash $ 51,558 The district completes the following Journal Entries to clear the Apportionment suspense and set up year-end accruals: To adjust within a fund, use TRNADJ in FIS or a JE in PeopleSoft. To move cash between funds 03 & 06 in FIS, use DISTCT. Create an Auditor's Transfer when moving between funds other than 03 & 06. Example 2 Clear Suspense - use current date but no later than 6/30 Fund Res Obj DR CR State Aid (PY) $ 51, Suspense (PY) $ 51,558 Example 3 Accrue Liability - use 6/30 in FIS or period 998 in PeopleSoft Fund Res Obj DR CR State Aid (PY) $ 48, Current Liabilities - (PY) $ 48,442 Example 4 Post PY to Suspense Fund Res Obj DR CR Suspense (PY) $ 48, Cash $ 48, June 2014

11 County School CY Advance Principal Apportionment Exhibit C Local Educational Agencies Type Adjusted School Total Revenue Limit Net State Aid ( ) Adjusted Local Control Funding Formula Categorical State Aid - ( /8015) Total Principal Apportionment Education Protection Account (EPA) Entitlement as of Advance ( ) A-2 A-15 B-1 37 XXXXX XXXXXXX XYZ UNIFIE $ 3,000,000 $ 1,000,000 $ 4,000,000 $ 1,500,000 County School Local Educational Agencies Type CY First Principal Apportionment Exhibit C Adjusted School Total Revenue Limit Net State Aid ( ) Adjusted Local Control Funding Formula Categorical State Aid - ( /8015) Recomputations and Adjustments Total Principal Apportionment Education Protection Account (EPA) Entitlement as of Advance ( ) A-2 A-16 A-27 A-17 A XXXXX XXXXXXX XYZ UNIFIE $ 3,500,000 $ 1,000,000 $ (100,000) $ 4,400,000 $ 1,400,000 CY First Principal Prior Year Recomputations and Adjustments CDS LEA Fiscal Year Program Amount XX XXXXX XXXXXXX XYZ PY School Total Revenue Limit $ (100,000) County School Local Educational Agencies Type CY Second Principal Apportionment Exhibit C Adjusted School Total Revenue Limit Net State Aid ( ) Adjusted Local Control Funding Formula Categorical State Aid - ( /8015) Recomputations and Adjustments Total Principal Apportionment Education Protection Account (EPA) Entitlement as of Advance ( ) A-2 A XXXXX XXXXXXX XYZ UNIFIE $ 4,000,000 $ 1,250,000 $ (100,000) $ 5,150,000 $ 1,350, June 2014

12 Advanced Apportionment Advance 5% 5% 9.00% 9% 9% 9% 9.00% Total XYZ Apportionment July August September October November December January Received State Aid $ 4,000,000 $ 200,000 $ 200,000 $ 360,000 $ 360,000 $ 360,000 $ 360,000 $ 360,000 $ 2,200,000 Gate Suspense * Prior Year Suspense * AT CASH $ 4,000,000 $ 200,000 $ 200,000 $ 360,000 $ 360,000 $ 360,000 $ 360,000 $ 360,000 $ 2,200, % % 57.79% 0.00% 0.00% P-1 Apportionment P-1 1/5 ** 1/5 ** 57.79% X 1/5 ** 0% X 1/5 ** Thru XYZ Apportionment February March April May June State Aid $ 4,500,000 $ 460,000 $ 460,000 $ 265,835 $ - $ 3,385,835 Prior Year Suspense * (100,000) (20,000) (20,000) (11,558) - (51,558) Example 1 & 2 AT CASH $ 4,400,000 $ 440,000 $ 440,000 $ 254,277 $ - $ 3,334,277 P-2 Apportionment & Deferrals P % 157.8% XYZ Apportionment July Deferred July P-2 Totals State Aid $ 5,250,000 $ 654,165 $ 1,210,000 $ - $ 5,250,000 Prior Year Suspense * (100,000) (28,442) (20,000) - (100,000) Example 3 & 4 AT CASH $ 5,150,000 $ 625,723 $ 1,190,000 $ - $ 5,150,000 * Financial Accounting will post Prior Year Recomputations and Adjustments to suspense. ** 1/5 recertified apportionment less receipts in Advanced *** The July payment also includes any difference between the P-1 & P June 2014

ENTRIES MADE PRIOR TO CLOSING

ENTRIES MADE PRIOR TO CLOSING There are a few entries that should be done before the end of the fiscal year that will make the closing process a little smoother. Included are some examples for your reference.