Temporary accounts (revenues, expenditures, and transfers) are closed at the end of the fiscal year to prepare the books for the next fiscal period. Tax revenues are a temporary account and are closed at year-end by transferring balances to fund balance accounts.
In contrast:
Taxes receivable (A) is a balance sheet (permanent) account.
Supplies inventory (C) is an asset.
Unassigned fund balance (D) is an equity account.
Relevant References:
GASB Codification Section 2200 – Fund Accounting and Closing Procedures
GFOA Accounting and Financial Reporting Manual
GAAP Fundamentals
Answer: B. tax revenues
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