Question

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.

Answer 1

Answer is a.

Step-by-step 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