A Local Government Recorded the Payment of Bond Principal by Debiting

question 144

Multiple Choice

A local government recorded the payment of bond principal by debiting Expenditure: bond principal and crediting Cash. What is the worksheet entry when preparing the government-wide statements?

• A) Debit Bonds Payable and credit Cash
• B) Debit Cash and credit Expenditure: Bond Principal
• C) Debit Bonds Payable and credit Expenditure: Bond Principal
• D) None of the above

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Definitions:

Accounting Equation

The fundamental equation stating that Assets = Liabilities + Owner's Equity, used as the basis for double-entry bookkeeping.

Financial Statement

Formal records that outline the financial activities and condition of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Objectivity Concept

An accounting principle that requires financial and accounting information to be independent and based on measurable and verifiable data.

Unit of Measure

A standard quantity used to express a physical quantity, ensuring uniformity in the reporting of financial and operational data.