Which of the Following Entries Would Be Used to Record

question 3

Multiple Choice

Which of the following entries would be used to record the purchase of water by the General Fund?

• A) DR- Expense; CR- Due to Enterprise Fund
• B) DR- Expenditure; CR- Due to Enterprise Fund
• C) DR- Transfer Out; CR- Cash
• D) DR- Due to Enterprise Fund; CR- Cash

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Definitions:

Equity in Subsidiary Earnings

The share of earnings attributed to the parent company from its ownership interest in a subsidiary.

Equity Method

An accounting method used to record investments in associate companies where the investor has significant influence but not full control, typically 20%-50% ownership. The investor's share of the investee's net income or loss is reflected in the investor's financial statements.

Net Income

A company's profit after deducting expenses and taxes from revenue.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.