The general fund of Athens ordered computer equipment on December 1,20X8,for $32,000.The order was appropriately encumbered on this date.Athens received the computer equipment on January 25,20X9,and issued a voucher to pay the vendor $32,400.Athens uses the calendar year for reporting,and all outstanding encumbrances lapse at year-end.Athens' governing board honors all outstanding encumbrances by including them in the following year's appropriations.On January 25,20X9,the general fund of Athens should debit:
A)Encumbrances for $32,000.
B)Fund Balance-assigned for Encumbrances for $32,400.
C)Expenditures-20X8 for $32,400.
D)Expenditures for $32,400.

Question

Quizplus · Accepted Answer

The general fund of Athens should debit Expenditures for $32,400 on January 25,20X9 because the computer equipment has been received and the voucher has been issued to pay the vendor. This represents the actual expense incurred by Athens during the year. Encumbrances were appropriately recorded on December 1,20X8, but they expire at year-end without any effect on the financial statements. Fund Balance-assigned for Encumbrances is not applicable to this transaction.

The General Fund of Athens Ordered Computer Equipment on December