Jefferson County bought a new backhoe using General Fund cash.When the asset was acquired, what was the appropriate entry that was made in the General Fund, assuming that the entity maintains its books and records in a manner to facilitate the preparation of fund financial statements?

Question

Quizplus · Accepted Answer

In governmental accounting, expenditures are debited when assets are acquired using cash from the General Fund. Cash is credited because it is the source of the acquisition. Therefore, the appropriate entry when Jefferson County bought a new backhoe using General Fund cash is to debit Expenditure and credit Cash. The other choices are incorrect because Equipment and Investment in fixed assets are balance sheet accounts that reflect the assets held by a governmental entity, not the expenditure incurred when assets are acquired.

Jefferson County Bought a New Backhoe Using General Fund Cash