If an agency incurs expenses that were not previously obligated, the agency should make a proprietary entry that DEBITS

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When an agency incurs expenses that were not previously obligated, it means that the expenses were not part of the agency's initial plan or budget. Therefore, the expenses can only be paid for using unexpended appropriations, which are funds that were set aside for a specific purpose but were not spent. Proprietary entries record transactions that affect the agency's internal accounts, such as its funds and appropriations. Hence, the agency should make a proprietary entry that debits its unexpended appropriations account to cover the expenses.

If an Agency Incurs Expenses That Were Not Previously Obligated