The Entry to Re-Establish Encumbrances Related to Purchase Orders from the Prior

question 59

Multiple Choice

The entry to re-establish encumbrances related to purchase orders from the prior year would include:

• A) A debit to Budgetary Fund Balance - Reserved for Encumbrances.
• B) A debit to Encumbrances Control.
• C) A credit to Accounts Payable
• D) None of the above.

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Definitions:

Fixed Costs

Expenses that do not vary with production volume or service levels, such as rent, salaries, and insurance premiums.

Price Sensitivity

The degree to which the demand for a product or service is affected by changes in its price.

Unconditional Warranty

A guarantee provided on a product that offers coverage or repair without any conditions or limitations.

Break-even Quantity

is the volume of sales a business must achieve to cover all its costs, without making a profit or a loss.