Vista Village places an order for supplies and records an encumbrance. When the supplies are received, which of the following accounts is (are) debited?

Question

Quizplus · Accepted Answer

The "budgetary fund balance reserved for encumbrances" is, in effect, a placeholder for the liability that will be incurred and is reversed by a debit. When the supplies are received, the entry to record expenditures is a debit.

Vista Village Places an Order for Supplies and Records an Encumbrance