During the Previous Year, Bane County Closed Its Encumbrances Account

question 14

Multiple Choice

During the previous year, Bane County closed its Encumbrances account.At the end of the previous year there was $5,000 of 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:

Mantle-Derived Magmas

Magmas that originate from the partial melting of the Earth's mantle, often rich in magnesium and iron.

Continental Crust

The layer of igneous, sedimentary, and metamorphic rocks which form the continents and the shallow seas close to them, distinguished by its lower density compared to oceanic crust.

Decompression Melting

The process by which melt is generated within the Earth when a body of rock is held at approximately the same temperature but the pressure is reduced.

Mantle-Derived Magmas

Magmas that originate from melting processes within the Earth's mantle, often associated with tectonic activity and volcanic eruptions.