The City of Island Grove Uses Encumbrance Accounting and Its

question 7

Multiple Choice

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 or entries should Island Grove make on June 2, upon receipt of the supplies and approval of the invoice?

• A) Choice A.
• B) Choice B.
• C) Choice C.
• D) Choice D.

Differentiate between contracts that must be in writing under the statute of frauds and those that do not.

Identify exceptions to the statute of frauds, including the main purpose or leading object rule.

Recognize the significance of written evidence in proving contractual obligations.

Understand the role and requirements of the parol evidence rule in contract interpretation.

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Definitions:

Total Dividends

The sum of all dividend payments made to shareholders for a particular period, typically a fiscal year.

Retained Earnings

Earnings accumulated by a company thus far, minus any shareholder dividends or distributions already issued.

Share Price

The current price at which a single share of a company can be bought or sold in the market.

Market Risk

The possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets.