Encumbrances Outstanding at Year-End in the General Fund Should Be

question 46

Multiple Choice

Encumbrances outstanding at year-end in the General Fund should be reported as a

• A)Fund balance designation in the General Fund.
• B)Liability in the General Fund.
• C)Reservation of fund balance in the General Fund.
• D)Liability in the governmental activities column on the government-wide statement of net assets.

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Definitions:

Natural Monopoly

A market situation where a single firm can provide a good or service at a lower cost than any potential competitor, often due to economies of scale.

Defining Characteristic

A feature that allows the clear identification or differentiation of an item or concept from others.

Associated Cost

Costs that are directly linked with a specific activity, process, or project.

Implicit Costs

The opportunity costs that arise from using assets, resources, or funds in a certain way rather than in the next best alternative.