Culver City Recognizes as Revenues/expenditures Those Amounts Collected/paid During the Year

question 33

Multiple Choice

Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end.The city offers a pension benefit to its employees who meet certain age and years of employment criteria.The city participates in the State Pension Plan.Per its contractual arrangement, the city's required contribution to the State Pension Plan for the fiscal year ended 6/30/15 is $5 million.Due to cash inflow shortages the city, which budgeted $5 million for pension contributions, paid only $4 million in the fiscal year ended 6/30/15.The city paid the remaining amount on September 30, 2015.Assuming the city maintains its books and records in a manner that facilitates the preparation of government-wide financial statements, how should the city record the pension contribution and any associated liability for the year ended 6/10/15?

• A)Debit Expenditures $5 million; Credit Cash $4 million and Pension contribution payable $1 million.
• B)Debit Expenses $5 million; Credit Cash $4 million and Pension contribution payable $1 million.
• C)Debit Expenditures $4 million; Credit Cash $4 million.
• D)Debit Expenses $4 million; Credit Cash $4 million.

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Definitions:

Time Savings

The reduction in the amount of time needed to complete a task or activity, often resulting from efficiency improvements or technological advancements.

Activity Duration

The length of time required to complete a specific activity or task.

Crash Duration

The shortest possible time for which an activity or project phase can be scheduled after allocating the maximum amount of resources.

Total Cost

The complete cost of producing or acquiring goods or services, including variable costs, fixed costs, and any other relevant expenses.