Recording ExpendituresBecause the emphasis in government funds is on measuring changes in current financial resources, neither expenses
Question:
Recording ExpendituresBecause the emphasis in government funds is on measuring changes in current financial resources, neither expenses nor capital assets are recorded in fund-based financial statements. These items are simply expenditures. An Expenditure account is debited and Vouchers (or Accounts) Payable is credited for cash (credit) purchases.
Example: A fire department spends $100,000 on salaries and $300,000 on a new truck.
Entry?
b)Inventory accounting for funds may be handled using either the Purchases Method or the Consumption Method. Under the Purchases Method, inventory items are treated as expenditures when purchased, without regard to when the inventory is consumed. The Fund Balance -- nonspendable account is used to reflect any inventory left at year-end.
Example: A city purchases $75,000 of supplies during the year but only uses $71,000, leaving $4,000 at year-end.
Entries: ??
