Previously Rose City issued bonds with a face value of $10 million to construct a new city maintenance facility.Assuming that the City maintains its books and records in a manner that facilitates the preparation of the fund financial statements, what is the appropriate entry when the City receives a progress billing from the contractor?

Question

Quizplus · Accepted Answer

When the City receives a progress billing from the contractor, it is considered an expenditure for the construction of the building. Therefore, the appropriate entry is to debit Expenditure and credit Accounts Payable. The other options are incorrect as they do not reflect the nature of the transaction.

Previously Rose City Issued Bonds with a Face Value of $10