Four New Computers,for Which the Cost Exceeded the City's Capitalization

question 44

Multiple Choice

Four new computers,for which the cost exceeded the city's capitalization threshold,were purchased for use in the city clerk's office using General Fund resources.Which of the following entries would be required to completely record this transaction?

• A) General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• B) Governmental Activities: Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• C) General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Governmental Activities:
• Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• D) General Fund: Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Governmental Activities:
• Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
• Vouchers Payable . . . . . . . . . . . . . . . . . . . . . . . . 8,000

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Definitions:

Avoidable Interest

Interest cost that a company can avoid if it does not undertake a project or an investment; typically considered in capital budgeting to assess potential savings.

Weighted Average

Weighted average is a calculation method where different values are given different levels of importance or weight, often used in inventory valuation or to average grades.

Economic Sacrifices Approach

A method in accounting that focuses on recognizing and measuring the sacrifices or costs that a company incurs in the process of generating revenue.

Input Market

The market in which firms purchase raw materials, labor, services, and other inputs necessary for the production of goods or services.