When materials that were ordered for a capital projects fund for use on a construction project are received but the invoice has not yet paid,what account is debited?

Question

Quizplus · Accepted Answer

The account that would be debited in this scenario is Construction Expenditures because the materials have been received and are now considered part of the project's costs. Encumbrances would have been used to reserve funds for the purchase of these materials, but once they are received, the encumbrances are no longer needed. Appropriations are how government entities set aside funds for particular purposes, but they are not accounts that are debited or credited. Vouchers payable would be used once the invoice is paid, but it is not appropriate to debit this account until the payment has been made.

When Materials That Were Ordered for a Capital Projects Fund