Expenditures are recognized when an asset is acquired by a governmental fund. Governmental funds focus on expenditures, while proprietary and fiduciary funds focus on expenses. Expenditures are accounted for under the modified accrual basis of accounting.
How to differentiate between expenses and expenditures?
Expenses are related to assets that have a long term life and are depreciated. They are accounted for under the accrual basis of accounting.
Expenditures are related to assets purchased by a fund, however are not depreciated. They are accounted for under the modified basis of accrual accounting.
Example:
On January 15th, the purchasing department of the Township of Adequate Disclosure purchases two automobiles for $30,000 on credit. Record the following entry.
