A Federal Agency That Uses Commitment Accounting Makes a Commitment

question 17

Multiple Choice

A federal agency that uses commitment accounting makes a commitment for supplies in the amount of $40,000.When it places the purchase order,however,the cost of the supplies is only $38,000.How is the $2,000 difference accounted for in the budgetary accounts?

• A)No budgetary entry is needed at this point in the budgetary accounting cycle.
• B)Commitments is debited for $40,000,Allotments - realized resources is credited for $2,000,and Undelivered orders - obligations,unpaid is credited for $40,000.
• C)Commitments is debited for $38,000 and Undelivered orders - unpaid is credited for $38,000.
• D)Allotments - realized resources is debited for $2,000 and Commitments is credited for $2,000.

Understand the concept and implications of unconscionability in contractual agreements.

Comprehend the principles governing the formation and breach of contracts, including the consequences of repudiation and tender.

Grasp the specifics of the United Nations Convention for the International Sale of Goods (CISG) on contract performance, breach, and remedies.

Understand the role and function of letters of credit in international trade transactions.

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