A government accounts for inventory on the consumption basis. Why do some accountants believe that it should offset the year-end inventory balance with a fund balance—nonspendable when no comparable fund balance is required for cash, taxes receivable, or most other assets?
Answer to relevant QuestionsA government accounts for inventory on the purchases basis. Why must it off set its year-end inventory balance with an addition to fund balance?A government’s unassigned fund balance in the general fund at year-end should be indicative of the amount that the government has available for appropriation in future years. Explain and provide an example to support your ...In a recent year Ives Township acquired six police cars at a total cost of $200,000. The vehicles are expected to have a useful life of four years.1. Prepare the journal entries that the township would make in its general ...The following is an excerpt from a note to the ﬁnancial statements of the city of Dallas (dates changed):The city prepares its annual appropriated general fund, debt service fund, and proprietary operating funds budgets on ...Which of the following do you think a city should classify as “special” items:a. The settlement of an age discrimination lawsuitb. The sale, at a sizable gain, of city-owned land to a private developerc. The unreimbursed ...
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