Carolina City Places an Order for a Specific Item of Equipment

question 14

Multiple Choice

Carolina City places an order for a specific item of equipment and encumbers $6,000 for that item. The equipment arrives with an invoice for $5,700. Which of the following entries should the city make upon receipt of the equipment?

• A) A debit to expenditures for $5,700, a debit to accounts payable for $300, and a Credit to encumbrances for $6,000.
• B) A debit to expenditures for $5,700, a debit to reserve for encumbrances for $6,000, a Credit to accounts payable for $5,700, and a Credit to encumbrances for $6,000.
• C) A debit to expenditures for $5,700, a debit to reserve for encumbrances for $300, and a Credit to accounts payable for $6,000.
• D) A debit to expenditures for $300, a debit to reserve for encumbrances for $5,700, and a Credit to encumbrances for $6,000.

---

Definitions:

Sebaceous Gland

A type of skin gland that produces sebum, an oily substance that helps to keep the skin and hair moisturized.

Sweat Gland

Small tubular structures of the skin that produce sweat, a fluid composed of water, minerals, and waste products.

Adhesion Belt

A cell structure composed of cadherin proteins that encircles a cell, promoting cell-cell adhesion and tissue integrity.

Intercalated Disks

Specialized cell-cell junctions in cardiac muscle that facilitate the synchronized contraction of the heart by allowing the rapid passage of ions and electrical impulses.