The Following Related Entries Were Recorded in Sequence in the General

question 4

Multiple Choice

The following related entries were recorded in sequence in the general fund of a municipality: The sequence of entries indicates that:

• A) an adverse event was foreseen and a reserve of $15,000 was created; later the reserve was cancelled and a liability for the item was acknowledged.
• B) an order was placed for goods or services estimated to cost $15,000; the actual cost was $15,350 for which a liability was acknowledged upon receipt.
• C) encumbrances were anticipated but later failed to materialize and were reversed. A liability of $15,350 was incurred.
• D) the first entry was erroneous and was reversed; a liability of $15,350 was acknowledged.

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Definitions:

Dividend Imputation

A tax system where companies’ paid taxes can be attributed to shareholders, reducing their personal income tax on dividends.

Group Members

Individuals or entities that belong to a defined collection or category, often within a corporate or organizational structure.

Australian Residents

Individuals or entities residing in Australia for tax purposes, subject to Australian tax laws on their worldwide income.

Reverse Acquisitions

A transaction where a smaller company acquires control over a larger company, often resulting in the smaller entity's management taking control of the combined entity.