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Unformatted text preview: 3-1 IN CLASS EXERCISE 3-8. a.Apparently, Lincoln City uses a 10-digit account number structure having three segments. Presumably, the first segment is the fund code, with 01 representing the General Fund. As the heading implies, the second segment (divided into two sub-segments) is the organizational unit, with 08-00 assigned to the Parks and Recreation Department. The zeros in the second sub-segment can be replaced with numbers representing activities within the department, such as parks, aquatic recreation, athletic facilities, administration, and so forth. The third segment represents the object of expenditure. This segment can be further subdivided to provide greater expenditure detail, such as 7120 for building materials, 7130 for maintenance supplies, and 7140 for office supplies. This account structure appears to meet the GASB’s expenditure classification requirements. b. Encumbrance control procedures are generally used only for purchases of goods and services for which there is delay between placing the order or contract and receipt of the goods or services. Recurring expenditure requirements such as payroll and utilities are fairly predictable, so encumbrance procedures are generally not necessary to adequately control these expenditures. Conferences and training are usually not “ordered” in advance in the sense of a purchase order or contract for future service. Even if conference registrations or airline reservations are made in advance, those are usually paid at the time of the registration or reservation and thus are actual, not estimated, expenditures. are actual, not estimated, expenditures....
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This note was uploaded on 02/23/2010 for the course ACCT 34231 taught by Professor Navaroli during the Spring '10 term at CSU San Bernardino.
- Spring '10