Final answer:
The statement is true; knowledge of the appropriations affected by encumbrance documents is essential to ensure legal and fiscal accountability when accounting for goods or services received from prior fiscal year commitments.
Step-by-step explanation:
To properly account for the receipt of goods or services ordered in a prior fiscal year, it is necessary to know which appropriations were affected when the encumbrance documents were issued. The statement in question is true. Understanding the affected appropriations is crucial because it ensures that the spending is aligned with the legal authorizations detailed in the budget, as required by law. This accountability preserves the integrity of the fiscal process and upholds the constitutional guidelines regarding public funds.
Furthermore, the budget plays a pivotal role in defining policy goals and priorities, with receipts and expenditures clearly outlined. With expenditures tied to specific appropriations, any spending must be reconciled with available revenues, particularly for state budgets, where a balanced budget is often required. In the context of federal spending, while the executive branch proposes a budget, it is Congress that has the power to approve, modify, and appropriate funds, which are then executed by the government agencies.