AP Badge #14 - Fiscal Year End-AP Badge #14 PowerPoint

AP Badge #14 PowerPoint

Pdf Summary

This document explains how Washington school district Accounts Payable staff handle year-end closing under the modified accrual basis of accounting.<br /><br />Key points:<br />- Washington school districts use a fiscal year from September 1 to August 31.<br />- Expenditures must be recorded in the fiscal year in which goods or services are received, even if payment happens later.<br />- Cash-basis districts generally do not use year-end accruals or prepaid items.<br /><br />It covers two major year-end topics:<br /><br />1. Prepaid items<br />- Used when a district pays in advance for goods or services that will benefit a future fiscal year.<br />- Examples include supplies purchased in summer for the next school year and multi-year services like insurance or software licenses.<br />- Prepaid items are recorded as asset account 430 when paid, then expensed in the year used.<br />- Modified accrual districts may use prepaid accounting; cash-basis districts may not.<br />- Districts must track and reconcile prepaid balances after year end.<br /><br />2. Expenditure accruals<br />- Used when goods or services were received before August 31 but the invoice arrives later.<br />- These expenditures must be accrued back into the prior fiscal year.<br />- If no invoice exists yet, districts may accrue based on estimates, especially for construction or retainage.<br />- Journal entries recorded by estimate must be reversed in the new fiscal year to avoid double-counting.<br />- Retainage held by the district must also be accrued.<br /><br />The document also explains:<br />- The October 25 deadline for submitting final financial reports.<br />- The need to review open purchase orders, receiving reports, construction-in-progress, and missing invoices.<br />- How to handle purchase orders at year end: close, reissue, or roll them forward depending on contract type and duration.<br /><br />Overall, the badge training teaches AP staff how to correctly assign costs to the proper fiscal year, manage prepaid expenses, accrue unpaid obligations, and clean up purchase orders during year-end closing.

Keywords

Washington school districts

year-end closing

modified accrual accounting

accounts payable

fiscal year

prepaid items

expenditure accruals

retainage

purchase orders

financial reports