The Expenditures control account of a government is debited when:
A) The supplies budget is recorded.
B) Supplies are ordered.
C) Supplies previously encumbered are received.
D) The invoice for supplies is paid.

Question

Quizplus · Accepted Answer

The Expenditures control account is debited when supplies previously encumbered are received. Encumbrances are created when a government sets aside funds for a particular purpose, such as purchasing supplies, but has not yet received the goods or services. The Expenditures control account is debited to recognize the actual expenditures incurred when the supplies are received and the encumbrance is lifted. Choice A is incorrect because recording the supplies budget would not directly impact the Expenditures control account. Choice B is incorrect because ordering supplies creates an encumbrance, but it does not result in an actual expenditure, so it would not be recorded in the Expenditures control account. Choice D is incorrect because paying the invoice for supplies would result in a credit to accounts payable and a debit to cash, but it would not directly impact the Expenditures control account.

The Expenditures Control Account of a Government Is Debited When