The Village of Catlett provides electricity to its residents through an Enterprise Fund (EF).The EF's fiscal year ends June 30.Its last payroll period starts June 26 and ends July 7.For financial reporting purposes,how should the EF handle the salaries earned by its employees June 26-30?

Question

Quizplus · Accepted Answer

The EF should report salary expense and a liability for salaries earned by employees during June 26-30. Even though the last payroll period ends on July 7, the salaries earned by employees for the period of June 26-30 are considered an expense for the current fiscal year since the fiscal year ends on June 30. Therefore, the EF should report the salary expense and a liability for the salaries earned but not yet paid.

The Village of Catlett Provides Electricity to Its Residents Through