Salaries and Wages That Have Been Earned by Governmental Employees

question 56

Multiple Choice

Salaries and wages that have been earned by governmental employees that have not yet been paid are recorded in the general fund as:

• A) An expenditure.
• B) An encumbrance.
• C) An appropriation.
• D) An expense.
• E) An investment.

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Definitions:

Cost of Debt

The effective rate that a company pays on its borrowed funds from loans or bonds.

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its stock, usually estimated using models like the Capital Asset Pricing Model (CAPM).

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, and typically pays dividends before common stock.

Common Stock

Shares of ownership in a corporation that entitle the shareholder to vote at shareholder meetings and receive dividends.