The City of Seales has a December 31 fiscal year end. Salaries earned by the City's General Fund employees for the period December 24 through December 31 will not be paid until January 7 of the next year. When it closes its books for the year, the City of Seales' accounting personnel would:

Question

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Entry d. should be made. In the General Fund (as is true with all governmental-type funds), expenditures that should be accrued include those that once incurred, normally are paid in a timely manner and in full from current financial resources-for example, salaries, utilities, and travel. Therefore, a debit needs to be made to an expenditure account for salaries and a liability needs to be reported for the accrued salaries.

The City of Seales Has a December 31 Fiscal Year