During the Previous Year, Bane County Closed Its Encumbrances Account

question 24

Multiple Choice

During the previous year, Bane County closed its Encumbrances account.At the end of the previous year there were $5,000 in outstanding purchase commitments.To restore these commitments to the accounts, which of the following entries would be required?

• A)Debit Reserve for encumbrances $5,000; Credit Encumbrances $5,000.
• B)Debit Encumbrances $5,000; Credit Reserve for encumbrances $5,000.
• C)Debit Encumbrances $5,000; Credit Fund balance $5,000
• D)Debit Fund balance $5,000; Credit Reserve for encumbrances $5,000.

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Definitions:

Horizontal Lines

Lines that run parallel to the horizon or ground level, often used in art and design to suggest stability or calm.

Vertical Lines

Lines that run up and down, perpendicular to the horizon, often used in art and design to convey strength, stability, and height.

Retinal Image

The image formed on the retina of the eye as a result of light reflecting off an object and entering the eye.

Gestalt Principles

Psychological theories that propose objects are viewed holistically, emphasizing the importance of context and perception in recognizing patterns.