A Federal Agency Recorded the Receipt of Supplies at an Actual

question 40

Multiple Choice

A federal agency recorded the receipt of supplies at an actual cost of $57,000. At the time the purchase orders were issued it was estimated the supplies would cost $56,000. How would this transaction be recorded in the budgetary track accounts?

• A) It would not be recorded in the budgetary track; it would only be recorded in the proprietary track.
• B) Debit Undelivered Orders $57,000 and credit Expended Authority $57,000.
• C) Debit Undelivered Orders $56,000, debit Allotments $1,000, and credit Expended Authority $57,000.
• D) Debit Undelivered Orders $57,000, credit Allotments $1,000, and credit Expended Authority $56,000.

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Definitions:

Marketable Securities

Financial instruments that can be easily converted into cash at a fair value in the short term.

Interest Rate Risk

Interest rate risk is the potential for investment losses due to fluctuations in interest rates, affecting the value of interest-bearing assets like bonds.

Collection Policy

The procedures used by a company to manage and collect accounts receivable, or the money owed by customers.

Aggressive Collection

Intensive efforts by a company to recover owed money from its debtors, possibly including legal actions and persistent contact.