Employees of the City of Calderwood are paid from the General Fund. These employees are paid for amounts earned over a two-week period. The amount due the employees is disbursed one week later. The last payroll period in December ended December 27, 20X2. The fiscal year ended December 31, 20X2. The employees were paid January 3, 20X3. The salaries earned for the last payroll period of 20X2 should be reported as expenditures of

Question

Quizplus · Accepted Answer

The salaries earned for the last payroll period of 20X2, despite being paid in 20X3, should be reported as expenditures of 20X2 because they were earned within that fiscal year. This follows the accrual basis of accounting, where expenses are recognized when they are incurred, not necessarily when they are paid.

Employees of the City of Calderwood Are Paid from the General