Several Years Ago, Grant County Was Sued by a Former

question 20

Multiple Choice

Several years ago, Grant County was sued by a former county employee for wrongful discharge. Although it was to be contested by the county, at the time of the lawsuit the attorneys believed that the county was likely to lose and the estimated amount of the ultimate judgment would be $100,000. This year, the case was finally settled with a judgment against the county of $150,000, which was paid. Assuming that the county maintains its books and records in a manner to facilitate the preparation of its government-wide financial statements, the entry in the current year should be

• A) Debit Expenditures $150,000; Credit Cash $150,000.
• B) Debit Expenses $150,000; Credit Cash $150,000.
• C) Debit Expenditures $50,000 and Claims payable $100,000; Credit Cash $150,000.
• D) Debit Expenses $50,000 and Claims payable $100,000; Credit Cash $150,000.

Analyze the effects of omitted adjusting entries on the balance sheet.

Prepare and understand the purpose of adjusting journal entries for prepaid expenses.

Journalize adjusting entries for unearned revenues.

Record and understand adjusting entries for accrued revenues and expenses.

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Definitions:

0 ≤ P ≤ 1

A mathematical expression indicating that the value of P (probability) ranges from 0 to 1, inclusive.

Outcome

An outcome is the result or consequence of an action, experiment, or event, often used in the context of probabilities and statistical experiments.

Classical Approach

A methodological approach in statistics that relies on theoretical probability distributions and assumptions for hypothesis testing and estimation.

Assigning Probabilities

The process of determining the likelihood of various outcomes in an experiment or situation.