Assume a federal agency receives supplies that had been previously ordered that will be used to support a federal program. The journal entries at the agency level to record this event will include:

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When goods or services are received and approved for payment, the journal entry in the agency accounts would be a debit to an asset account and operating expenses, as appropriate and a credit to Accounts payable. Then a debit to Accounts payable and credit to Fund Balance with Treasury.

Assume a Federal Agency Receives Supplies That Had Been Previously