Question

1. A county's general fund has $4,000,000 in purchase orders outstanding at the beginning of 2020. The orders are delivered in 2020 and the county pays the suppliers $4,000,000. Expenditures ordered, delivered and paid for in 2020 total $35,000,000. Near the end of 2020, encumbrances for $5,000,000 in purchase orders are recorded. Encumbrances are reported in fund balance—assigned. Using the legal budgetary basis, what amount does the county report for expenditures in 2020? A. $35,000,000 B. $40,000,000 C. $39,000,000 D. $44,000,000

Answer 1

C. $39,000,000

Step-by-step explanation:

In utilizing the legal budgetary basis, this will have to be reported. the scope and manner that will shape how the agency’s monies are actually spent will now be open to the decision makers. The limitations may be as a result of legal restrictions on how funds may be used, matching funds issues (which will later result in loss of revenues if the agency does not spend a certain amount), and state mandates.

ONLY the expenses made or incurred in reference to 2020, will be accounted. Since the $5,000,000 is expected to be for the next year so it's not added.

Answer 2

Answer: C

$39,000,000

Step-by-step explanation:

Using the legal budgetary basis, this should be reported. Decision makers have the scope in determining how the agency’s monies are actually spent. The limitations may result from legal restrictions on how funds may be used, matching funds issues (that will result in loss of revenues if the agency does not spend a certain amount), and state mandates.

ONLY the expenditure made in reference to 2020, will be accounted. Since the $5,000,000 is going to be for the next year so it's not added.