Question

2. In its fund financial statements, the city would recognize the receipt of a new computer (to be used for general administrative purposes) that it had ordered the previous year as an a. Encumbrance b. Expense c. Expenditure d. Asset

Answer 1

Answer:

D

Explanation:

assets are items that have monetary value and are owned by a business.

Answer 2

Answer:

Expenditure

Explanation:

Expenditure is the payment for goods and services with cash or on credit.

Expenditure is defined as finds that are spent in purchasing and increasing the firm's assets. Expense on the other hand is money spent during normal operations of a business in its bid to generate revenue.

The purchase of the new computer is an expenditure which increases the fixed asset of the business.

There should be an evidence for expenditure spent for example a receipt that can be used by the accountant to record the transaction.