When computers are ordered by the mayor's office, the purchase order should be recorded in the General Fund as a debit to:
A) Encumbrances.
B) Equipment.
C) Expenditures.
D) Appropriations.

Question

Quizplus · Accepted Answer

When a purchase order for computers is made, it represents a commitment to spend funds from the General Fund. Therefore, it should be recorded as a debit to encumbrances, which represents the outstanding commitments for goods and services that have not yet been received. Once the computers are received and paid for, the encumbrances are relieved and the appropriate debit is made to expenditures or equipment, depending on the nature of the purchase. Appropriations, on the other hand, refer to the amount of money set aside in the budget for a particular purpose and are not affected by the actual purchase order.

When Computers Are Ordered by the Mayor's Office, the Purchase