A school district prepares its budget on a cash basis. It is contemplating the c

Question

A school district prepares its budget on a cash basis. It is contemplating the changes or actions that follow. For each, indicate the impact that the change would have (1) on year-ending June 30, 2017 general fund expenditures or transfers and (2) on year ending June 30, 2017, government -wide expenses (e.g., “increase expenditures by $x” or “no impact”). Provide a brief explanation of your response, indicating that you are aware of the relevant financial reporting issue. 5. The district delayed from June to July thee approval of a grant of $50,000 to a local health clinic that provides examinations to low-income students. The funds are to be paid out of resources budgeted for the fiscal year ending June 30, 2017, and are intended for use by the clinic in that same period.

Explanation / Answer

In the following question we have to find out the impact in two cases

when school follow cash basis accounting , transaction will be recoreded in the books when goes in or out.

in the given case, the district delayed from june to july the approval of a grant $50000.

since there is no cash in the school ,so transaction will not recording on year ending 30 june 2017

Case 1- on year-ending June 30, 2017 general fund expenditures or transfers increases by $50000 as The funds are to be paid out of resources budgeted for the fiscal year ending June 30, 2017, and are intended for use by the clinic in that same period.

Case 2- on year ending June 30, 2017, government -wide expenses - no impact as amount not yet paid on or before 30 june 2017.

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