When equipment that is used by the General Fund is received how should it be recorded?
What basis of accounting does the General Fund use?Modified accrual basis accounting is used for all governmental funds (general, federal special revenue, other special revenue, general debt service, debt service, and capital projects).
When Should General Fund expenditures be recognized?Thus, General Fund expenditures should be recognized when goods or services have been acquired, and either cash has been paid or a fund liability has been incurred.
Do you record inventory when ordered or received?If you use a perpetual inventory system, where you update your stock records constantly, you record the shipment at once; with a periodic inventory, you record it at the end of the accounting period. Either way, you don't record the purchase as an account payable until you receive the merchandise invoice.
Where does equipment go on a statement of financial position?When equipment is purchased, it is not initially reported on the income statement. Instead, it is reported on the balance sheet as an increase in the fixed assets line item.
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