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A Capital Projects Fund Awards the Construction of a Building

Question 13

Multiple Choice

A Capital Projects Fund awards the construction of a building to a construction contractor at a contract cost of $1,000,000.What entry is prepared by the Capital Projects Fund?


A) Debit Expenditures $1,000,000,Credit Liability $1,000,000
B) Debit Building $1,000,000,Credit Expenditures $1,000,000
C) Debit Other Financing Uses $1,000,000,Credit Expenditures $1,000,000
D) Debit Encumbrances $1,000,000,Credit Reserve for Encumbrances $1,000,000

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