A federal agency recorded the receipt of supplies at an actual cost of $57,000. At the time the purchase orders were issued it was estimated the supplies would cost $56,000. How would this transaction be recorded in the proprietary track accounts?

Question

Quizplus · Accepted Answer

Under the proprietary track, the transaction would be recorded in both the balance sheet and income statement.

- Debit Operating Materials and Supplies $57,000: This is an increase in assets (supplies) acquired at actual cost. 
- Debit Unexpended Appropriations $57,000: This is the recorded budget authority, which is an increase in liabilities under the balance sheet.  
- Credit Accounts Payable $57,000: This is the reduction of the payable amount owed to the supplier. 
- Credit Appropriations Used $57,000: This is the recorded expense when the supplies are received, which is an increase in the income statement.

Therefore, option D correctly and comprehensively records this transaction under the proprietary track.

A Federal Agency Recorded the Receipt of Supplies at an Actual