A Government Department Uses an Encumbrance System to Keep Tabs

question 18

Multiple Choice

A government department uses an encumbrance system to keep tabs on spending. On July 1, 2013, a department employee issued a purchase order for cleaning supplies estimated to cost $500. The supplies were delivered promptly, and invoiced at $450. What would be the journal entry to record the Purchase Order?

• A) No entry is required.

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Definitions:

Fraudulent

Involves deceitful conduct designed to manipulate another person or entity, typically for personal gain.

Law

A system of rules that are created and enforced through social or governmental institutions to regulate behavior.

Tort Of Deceit

A legal wrong involving intentional misrepresentation or falsehood that causes harm to another.

Equitable Remedy

A legal remedy, usually issued by a court, which provides a solution deemed fair and just in situations where monetary damages are not sufficient.