Which of the Following Observations Concerning Encumbrances Is NOT True

question 23

Multiple Choice

Which of the following observations concerning encumbrances is NOT true?

• A) Their purpose is to ensure that the expenditures within a period do not exceed the budgeted appropriations.
• B) They provide a control system and safeguard for governmental unit administrators.
• C) They are a unique element of governmental accounting.
• D) They are recognized only at the time disbursements are made.

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Definitions:

Adjustments Columns

Sections within financial statements or ledgers where adjustments are recorded to ensure they accurately reflect the financial position at period-end.

Trial Balance Columns

Sections in a trial balance where debit and credit account balances are listed side by side to ensure they are equal.

Adjusted Trial Balance Columns

This refers to the columns in a trial balance that have been adjusted for entries made in the general journal at the end of an accounting period before the preparation of financial statements.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue; also known as the bottom line.