Question

Marsh Lake County operates a solid waste landfill, accounted for in a governmental fund. The county has determined that this year's portion of the total closure and postclosure costs for the landfill is $600,000. How should the county record this cost?

A. Debit Landfill Expenditure $600,000; Credit Liability for Landfill Costs $600,000

B. Debit Landfill Expenditure $600,000; Credit Liability for Landfill Costs $600,000 and include $600,000 as an addition on the schedule of changes in long-term obligations.

C. No entry in the fund; include $600,000 on the schedule of changes in long-term obligations.

Answer 1

Marsh Lake County should record this year's portion of the closure and postclosure costs for the landfill by debiting Landfill Expenditure and crediting Liability for Landfill Costs for $600,000, and include this amount on the schedule of changes in long-term obligations.

Step-by-step explanation:

When Marsh Lake County determines its portion of the total closure and postclosure costs for the landfill, it should record the cost as follows: Debit Landfill Expenditure $600,000; Credit Liability for Landfill Costs $600,000. Additionally, it should include $600,000 as an addition on the schedule of changes in long-term obligations.


This recognizes the current year’s financial burden for the future closure and postclosure of the landfill while adhering to governmental accounting standards that require such costs be recorded as a liability and expenditure.