Question

A new computer, which had been estimated to cost $28,000, was received for an activity of a special revenue fund. The actual cost of the computer was $29,400. To record this in the special revenue fund, Group of answer choices

Answer 1

C. Expenditures should be debited for $29,400.

Step-by-step explanation:

Expenditures are the amount of money used by individuals, businesses, organizations and so on in attaining new inputs, improve old ones or reduce liabilities. It is simply the payments with cash or credit when acquiring goods and services. It is sometimes called consumption or spending. In this scenario, the expenditure is the actual cost of buying the computer which was $29400. Therefore, on entry, regardless of the estimated costs, expenditures should be debited for $29400