A citizen sued a city because he was accidentally shot by a police officer. The city acknowledges responsibility for the accident, and based on ongoing negotiations, the city’s attorney believes the citizen’s claim will probably be settled for about $ 75,000. The accident occurred on March 14, 2013; the government’s fiscal year ends June 30, 2013; and the city’s attorney believes settlement will be reached in about January 2014. Prepare the journal entry, if any, the city should make regarding this event when it closes its General Fund books for fiscal year 2013. To support your answer, state the principle that governs the accounting for this event in the General Fund.
Answer to relevant QuestionsThe City of Nickston uses the purchases method to account for the acquisition of supplies by its General Fund. At the end of fiscal 2012, the supplies inventory was valued at $ 63,000. At the end of fiscal 2013, the supplies ...(Multiple Choice)1. Which of the following sets of accounts is the General Fund likely to have? a. Vouchers payable, Due to other funds, and Deferred revenues— property taxes b. Cash, Property taxes receivable, and Capital ...Explain the relationship between Debt Service Funds and Capital Projects Funds. Why is encumbrance accounting generally used for Capital Projects Funds?Assume you are the accounting supervisor for the City of Secret Valley, and you discover a violation the city made regarding its bond indentures. The city has four bond issues outstanding, and the bond indenture for each ...
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