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Author Question: A city accounts for its capital acquisitions using encumbrances. When the city enters into a ... (Read 109 times)

dakota nelson

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on: Jul 5, 2018
A city accounts for its capital acquisitions using encumbrances. When the city enters into a contract to acquire equipment, what journal entry should it make?
 
  a. debit expenditures - capital outlay; credit vouchers payable
  b. debit encumbrances; credit budgetary fund balance reserved for encumbrances
  c. debit equipment; credit vouchers payable
  d. debit encumbrances; credit appropriations - equipment

Question 2

The entry to close the appropriate insurance account at the end of the accounting period is
 a. debit Income Summary; credit Prepaid Insurance
  b. debit Prepaid Insurance; credit Income Summary
  c. debit Insurance Expense; credit Income Summary
  d. debit Income Summary; credit Insurance Expense


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ErinKing

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Reply #1 on: Jul 5, 2018
Answer to Question 1

b

Answer to Question 2

d


dakota nelson

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Reply 2 on: Jul 5, 2018
YES! Correct, THANKS for helping me on my review

xoxo123

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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