When a Purchase Order Is Issued Under a Capital Projects

question 65

Multiple Choice

When a purchase order is issued under a Capital Projects fund,how should the transaction be recorded?

• A) Debit Expenditures and credit Budgetary Fund Balance -- Reserve for Encumbrances.
• B) Debit Encumbrances Control and credit Budgetary Fund Balance -- Reserve for Encumbrances.
• C) Debit Expenditures and credit Vouchers payable.
• D) Debit Encumbrances Control and credit Vouchers payable.

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Definitions:

Social Security Tax

A payroll tax paid by employees and employers to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Time Card

A record of the hours worked by an employee, used to calculate payroll and ensure compliance with labor laws.

Internal Control

Processes and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Payroll Bank Account

A designated bank account used exclusively for processing payroll transactions and managing salary disbursements.