In a Capital Projects Fund, When a Contract Is Signed

question 27

Multiple Choice

In a Capital Projects Fund, when a contract is signed with a contractor to construct a fixed asset, the amount of the contract is:

• A)​debited to Expenditures.
• B)​credited to Contracts Payable.
• C)​debited to Encumbrances.
• D)​credited to Other Financing Sources.

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Definitions:

Derivative Securities

Financial instruments whose value is derived from the value of other, underlying assets.

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Exchange Rate

The price of one country's currency in terms of another country's currency.