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A city ordered uniforms with an expected cost of $6,000 for policemen. This amount is encumbered.
The uniforms are received with an invoice of $5,900. The entries to record the receipt of the
uniforms should include a credit to
a) Encumbrances of $6,000.
b) Encumbrances Outstanding of $6,000.
c) Encumbrances of $5,900.
d) Appropriations of $100.

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sahinbinici

Answer:

Answer is a.

Explanation:

  • The first journal entry for encumbrances is:

Encumbrances                                 6,000

Encumbrances outstanding                          6,000

  • After the receipt of the invoice the journal entry should be:

Encumbrances outstanding            6,000

Encumbrances                                                6,000

Expenditures                                    5,900

Invoice                                                              5,900

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