The Khoo Music Society, a Not-For-Profit Organization, Is Purchasing Musical

question 5

Multiple Choice

The Khoo Music Society, a not-for-profit organization, is purchasing musical instruments to donate to some local schools. Khoo ordered the instruments on August 1, 20X1, and requested the following delivery schedule: $\begin{array}{|l|c|c|}\hline\text { September } 15,20 \mathrm{X} 1 & \text { woodwinds } & (\$ 3,000) \\\hline \text { October } 15,20 \mathrm{X} 1 & \text { strings } & (\$ 5,000) \\\hline \text { October } 31,20\mathrm{X} 1 & \text { brass } & (\$ 6,000) \\\hline \text { November } 15,20\mathrm{X} 1 & \text { drums } & (\$ 6,000) \\\hline\end{array}$ Khoo uses an encumbrance system and has properly recorded the necessary journal entry at August 1, 20X1. At November 15, 20X1, which of the following accounts should be debited and which statement will be affected?

• A)Estimated commitments/statement of operations
• B)Encumbrances-instruments/statement of operations
• C)Estimated commitments/statement of financial position
• D)Encumbrances-instruments/statement of financial position

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Definitions:

Operations

The activities involved in the day-to-day functions of a business related to producing and delivering its products or services.

Housekeeping Department

A division within a business, often within the hospitality industry, responsible for maintaining cleanliness, orderliness, and standards of hygiene.

Operating Departments

Sections or units within an organization directly involved in its core business activities, responsible for producing its goods or services.

Labor-hours

The total number of hours worked by all employees during a specific period, used as a measure in various calculations and operational decisions.