During January 2020 General Fund supplies ordered in the previous fiscal year and encumbered at an estimated amount of $2,000 were received at an actual cost of $2,200. The entry to record this transaction will require a debit to:
A) Expenditures-2020 in the amount of $2,200.
B) Expenditures-2019 in the amount of $200.
C) Expenditures-2020 in the amount of $200.
D) Expenditures-2019 in the amount of $2,200.

Question

Quizplus · Accepted Answer

The supplies were encumbered in the previous fiscal year and the estimated amount was $2,000. Therefore, in the previous fiscal year, an entry was made to record the encumbrance by crediting the encumbrances account and debiting the expenditures account with an estimated amount of $2,000.

In the current fiscal year when the supplies were received, the actual cost was $2,200. As the supplies were already encumbered and recorded in the previous fiscal year, the entry in the current fiscal year will only record the actual cost of the supplies received, which is $2,200.

Therefore, the entry to record this transaction will require a debit to Expenditures-2020 in the amount of $200 (actual cost of supplies received - estimated cost encumbered).

During January 2020 General Fund Supplies Ordered in the Previous