The City of Lakeview adopts its budget on a basis of accounting that permits outstanding purchase commitments
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Question:
The City of Lakeview adopts its budget on a basis of accounting that permits outstanding purchase commitments to be charged against the budget in the year that the goods are received instead of in the year they are ordered. During the year the city ordered and received $4,000 of supplies (of which $3,000 had been paid and $1,000 was unpaid) and had $500 of outstanding purchase commitments for supplies at year-end.
In the budget-to-actual comparison, the expenditures for supplies would be:
A. $3,000
B. $3,500
C. $4,000
D. $4,500
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118983270
7th edition
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
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