Question

Salaries and wages that have been earned by governmental employees that have not yet been paid are recorded in the general fund as:

A. An expenditure.
B. An encumbrance.
C. An appropriation.
D. An expense.
E. An investment.

Answer 1

Salaries and wages earned but unpaid are recorded as expenditures in the general fund of governmental accounting, reflecting the accrual accounting principle.

Step-by-step explanation:

In the context of governmental accounting, salaries and wages that have been earned by governmental employees but not yet paid are recognized in the general fund as expenditures. This treatment reflects the accrual basis of accounting used by governments to match expenses with the periods in which they are incurred, even if the cash payment occurs later. Expenditures in government finance represent money spent, including transfer payments and other forms of spending on goods and services necessary for governmental operations, such as those for staffing various departments, agencies, and services.