Final answer:
The statement in the question is false. Issuance of purchase orders or contracts requires an encumbrance entry in the General Fund to reflect the commitment of funds for pending transactions as per governmental accounting practices.
Step-by-step explanation:
The statement that when an activity accounted for by the General Fund results in the issuance of purchase orders or contracts for goods or services a record must be kept, but no journal entries in the General Fund are necessary, is false. The General Fund is used to account for all financial resources except those required to be accounted for in another fund. Therefore, when a purchase order or contract is issued, it represents an encumbrance on the fund, and an encumbrance entry should be made. This entry typically involves recording the encumbrance and a related reservation of fund balance, which serves as a commitment on a portion of the General Fund's resources for pending transactions.
Universal generalizations about government budgeting practices indicate that no money shall be drawn from any treasury without appropriate legal appropriations. This implies a need for governmental units to maintain a full account of their commitments as they reflect pending expenditures.