During the previous year, Bane County closed its Encumbrances account. At the end of the previous year there was $5,000 of outstanding purchase commitments. To restore these commitments to the accounts, which of the following entries would be required?
A) Debit Reserve for encumbrances $5,000; Credit Encumbrances $5,000.
B) Debit Encumbrances $5,000; Credit Reserve for encumbrances $5,000.
C) Debit Encumbrances $5,000; Credit Fund balance $5,000
D) Debit Fund balance $5,000; Credit Reserve for encumbrances $5,000.

Question

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The Answer of During the previous year, Bane County closed its Encumbrances account. At the end of the previous year there was $5,000 of outstanding purchase commitments. To restore these commitments to the accounts, which of the following entries would be required?
A) Debit Reserve for encumbrances $5,000; Credit Encumbrances $5,000.
B) Debit Encumbrances $5,000; Credit Reserve for encumbrances $5,000.
C) Debit Encumbrances $5,000; Credit Fund balance $5,000
D) Debit Fund balance $5,000; Credit Reserve for encumbrances $5,000.

During the Previous Year, Bane County Closed Its Encumbrances Account