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The City of Island Grove uses encumbrance accounting and its fiscal year ends on June 30. On May 6, a purchase order was approved and issued for supplies in the amount of $6,000. Island Grove received these supplies on June 2, and the $6,000 invoice was approved for payment. What General Fund journal entry should Island Grove make on May 6, to record the approved purchase order?
Debt Worthy
A term indicating an individual or organization's capability and reliability in repaying borrowed money, often assessed by creditworthiness.
Expansion Capital
Refers to the funds provided to mature companies looking to expand operations, enter new markets, or acquire assets without changing control of the business.
Long-Term Borrowings
Loans or debt obligations with repayment schedules extending beyond one year, used to finance more permanent or significant investments.
Working Capital
The measure of a company's short-term financial health and operational efficiency, calculated as current assets minus current liabilities.
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