A city received supplies that had been previously encumbered.The supplies were encumbered for $5,000 and had an actual cost of $4,900.To recognize this event the county should make which of the following entries?
A)Debit Reserve for encumbrances $5,000 and Supplies $4,900; credit Encumbrances $5,000 and Vouchers payable $4,900.
B)Debit Encumbrances $5,000 and Supplies $4,900; credit Reserve for encumbrances $5,000 and Vouchers payable $4,900.
C)Debit Reserve for encumbrances $4,900 and Supplies $4,900; credit Encumbrances $4,900 and Vouchers payable $4,900.
D)Debit Encumbrances $4,900 and Supplies $4,900; credit Reserve for encumbrances $4,900 and Vouchers payable $4,900.

Question

Quizplus · Accepted Answer

The correct entry involves debiting the Reserve for encumbrances for the full encumbered amount ($5,000) and Supplies for the actual cost ($4,900), and crediting Encumbrances for the encumbered amount ($5,000) and Vouchers payable for the actual cost ($4,900).

A City Received Supplies That Had Been Previously Encumbered