When Encumbrances Are Recognized at the Time Purchase Orders Are

question 55

Essay

When encumbrances are recognized at the time purchase orders are issued,indicate whether each of the following accounts of the General Fund should be debited (D),credited (C),or is not affected (N).
_____ 1.Encumbrances
_____ 2.Encumbrances Outstanding
_____ 3.Expenditures
_____ 4.Vouchers payable
_____ 5.Purchases

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Definitions:

Owned

Having possession or legal right over something.

Installment Method

A method used in taxation allowing the recognition of income over a period of years when payment from a sale of property is received in installments.

Section 179 Deduction

A tax deduction that allows businesses to deduct the full purchase price of qualifying assets financed during the tax year.

Contract Price

The total monetary amount agreed upon by the parties involved in a contract for the exchange of goods, services, or property.