At what point would the General Fund account "Budgetary Fund Balance -- Reserve for Encumbrances" be debited?

Question

Quizplus · Accepted Answer

The General Fund account "Budgetary Fund Balance -- Reserve for Encumbrances" is debited when an authorized liability is incurred, meaning when the government receives the order. This represents the amount of funds set aside for outstanding purchase orders or contracts that have been authorized but not yet paid. Choice A is incorrect because simply ordering an item does not represent an incurred liability. Choice C is incorrect because cash payment to the vendor represents an actual outflow of funds which would reduce the "Budgetary Fund Balance -- Reserve for Encumbrances" account. Choice D is close, but not entirely correct, as the debiting of the account depends solely on the incurrence of the liability and not whether there are authorized appropriations.

At What Point Would the General Fund Account "Budgetary Fund