Governmental and Nonprofit Accounting (11th Edition)
11th Edition
ISBN: 9780133799569
Author: Robert J. Freeman, Craig D. Shoulders, Dwayne N. McSwain, Robert B. Scott
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 1.5E
Which of the following statements is true?
- a. Encumbrances are equivalent to expenditures, and encumbrances outstanding at the end of a year should be reported as liabilities.
- b. No expenditure can be reported without first being encumbered.
- c. Encumbrances are recorded at the estimated cost of goods ordered or services contracted for. The subsequent amount recognized as expenditures upon receipt of the goods or services must equal the encumbered amount.
- d. Encumbrances are recorded at the estimated cost of goods ordered or services contracted for. The subsequent amount recognized as expenditures upon receipt of the goods or services equals the actual cost.
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(a) Explain the difference between:
Capital expenditure and revenue expenditure, giving an example of each.
(b) Explain the difference between the receivables collection period and the payables payment period. Why is it generally preferable for the receivables collection period to be shorter than the payables payment period?
When an expenditure is made and it is treated as an expense but should have been capitalized, the resulting impact in the year of the expenditure would be:
A.
Assets would be overstated, net income would be understated.
B.
Both the assets and net income would not be affected.
C.
Assets would be understated, net income would be understated.
D.
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a. how much should TRUE recognize as gain or loss on extinguishment?
b. how much should TRUE recognize as interest expense for the year ended, December 31, 2021?
Chapter 3 Solutions
Governmental and Nonprofit Accounting (11th Edition)
Ch. 3 - Governmental budgeting and budgetary control are...Ch. 3 - Distinguish between the following types of...Ch. 3 - Prob. 3QCh. 3 - What are budgetary control points? How do they...Ch. 3 - Prob. 5QCh. 3 - Why might a local government not prepare and adopt...Ch. 3 - Revenue estimates and appropriations enacted are...Ch. 3 - In business accounting, a single general ledger...Ch. 3 - Illustrations 3-2 and 3-3 show Revenues Subsidiary...Ch. 3 - An interim budgetary comparison statement for a...
Ch. 3 - Prob. 11QCh. 3 - An annual budgetary comparison schedule for a...Ch. 3 - General budgets are most common for which of the...Ch. 3 - Special budgets are best defined as budgets a....Ch. 3 - Prob. 1.3ECh. 3 - Which of the following statements is false? a....Ch. 3 - Which of the following statements is true? a....Ch. 3 - Appropriation requests for the General Fund are...Ch. 3 - Which of the following statements would be true...Ch. 3 - Prob. 2.3ECh. 3 - Which of the following GAAP requirements for...Ch. 3 - Prob. 2.5ECh. 3 - Prob. 3.1ECh. 3 - Which of the following items does a government...Ch. 3 - The budget data presented in a school district...Ch. 3 - Allotments are best defined as a. legislative...Ch. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - (Budgetary EntriesGeneral Ledger) The city of...Ch. 3 - (General LedgerSubsidiary Ledgers Relationship,...Ch. 3 - (General Ledger Entries) Record the following...Ch. 3 - (Encumbrances) Record the following transactions...Ch. 3 - (Operating Budget Preparation) The finance...Ch. 3 - (Budgetary and Other EntriesGeneral and Subsidiary...Ch. 3 - Prob. 3PCh. 3 - (Budgetary Comparison StatementBudgetary Basis...Ch. 3 - (a) Prepare general ledger and subsidiary ledger...Ch. 3 - Using the information from C3-2 and assuming that...
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