Final answer:
In governmental accounting, the correct entry to record salaries for employees working on a capital project in the capital projects fund is a debit to Construction Expenditures.
Step-by-step explanation:
The capital projects fund of Petit City paid salaries to city employees who worked on the construction of a capital project. The correct debit entry for recording this transaction in the capital projects fund should be to d. Construction Expenditures.
Governmental accounting, which includes the accounting for capital projects funds, follows the modified accrual basis of accounting. Under this method, expenses are recorded when liabilities are incurred. As such, the salaries paid to employees for their work on the capital project are considered part of the cost of the capital asset being constructed and therefore should be classified as construction expenditures.
Options a. Departmental expense accounts and b. Salaries and Wages Expense are more commonly used in general fund accounting for operational expenses, rather than in capital projects fund accounting. Similarly, option c. Due to General Fund would be used if the capital projects fund owed money to the general fund, which is not the case described.