What Is the Appropriate Accounting for the Signing of a Contract

question 69

Multiple Choice

What is the appropriate accounting for the signing of a contract to build a new water treatment facility by an Enterprise Fund?

• A) Debit Encumbrances.
• B) Credit Budgetary Fund Balance - Reserve for encumbrances.
• C) No entry is required.
• D) Both A & B.

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Definitions:

Primary Methods

Fundamental techniques or approaches used in a field of study or area of investigation.

Organizational Change

The process through which a company or organization alters its structure, strategies, operational methods, technologies, or organizational culture to effect change.

Cognitively Rigid

An individual's difficulty in adjusting their thinking or beliefs in response to new information, often leading to inflexible or unadaptive behavior.

Seeking Routine

The pursuit of regular, predictable patterns of behavior in one’s daily life to enhance stability and reduce uncertainty.