The entry to re-establish encumbrances related to purchase orders from the prior year would include:

Question

Quizplus · Accepted Answer

To re-establish encumbrances related to purchase orders from the prior year, the corresponding encumbrances control account should be debited. This will balance the debit entries made when the purchase orders were originally encumbered. There is no need to credit Fund Balance - Reserved for Encumbrances as this account is only used to record encumbrances for the current fiscal year, not prior years. Fund Balance - Unreserved is not affected by re-establishing prior year encumbrances. Therefore, the correct entry would be a debit to Encumbrances Control.

The Entry to Re-Establish Encumbrances Related to Purchase Orders from the Prior