The City of Brownsville had a balance in the Budgetary Fund Balance -- Reserve for Encumbrances account at the end of 2014 in the amount of $90,000. During 2015,all purchase orders related to the $90,000 were filled,and the invoice amount was $91,200. Which of the following would be true regarding the Statement of Revenues,Expenditures,and Changes in Fund Balances for 2015? (assume encumbrances do not lapse)

Question

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The amount shown for Expenditures would include the total amount of $91,200, which is the amount of the invoices for all purchase orders related to the encumbrances. The Budgetary Fund Balance -- Reserve for Encumbrances account is used to set aside monies for goods or services that have not yet been received or paid for, but have been ordered and committed to be purchased. Once the goods or services are received or paid for, the encumbrances are liquidated and the expenditures are recorded. Therefore, the full amount of the invoices related to the encumbrances must be included in the Expenditures section of the Statement of Revenues, Expenditures, and Changes in Fund Balances for 2015.

The City of Brownsville Had a Balance in the Budgetary