A review of Park City's books shows the following information: I. $2,500 of outstanding vouchers payable
II. $3,000 of outstanding purchase order amounts
Which of these amounts would you expect to see in the general fund's encumbrances account?
A) $2,500
B) $3,000
C) $5,500
D) $500

Question

Quizplus · Accepted Answer

Encumbrances in governmental accounting are amounts committed for spending but not yet expended. They typically relate to purchase orders or contracts not yet fulfilled. Therefore, the $3,000 of outstanding purchase order amounts would be recorded in the general fund's encumbrances account, not the vouchers payable, which represent actual liabilities.

A Review of Park City's Books Shows the Following Information