The general fund of Loveland ordered a new fire truck on November 12,20X8,for $150,000.The order was appropriately encumbered on this date.Loveland received the fire truck on January 15,20X9,and issued a voucher to the manufacturer for $148,600.Loveland uses the calendar year for reporting,and outstanding encumbrances at December 31,20X8,are lapsing.On January 15,20X9,the general fund of Loveland should debit:

Question

Quizplus · Accepted Answer

The fire truck was received and a voucher was issued, which means the expenditure has been incurred. Thus, the general fund of Loveland should debit Expenditures for $148,600. Option A is incorrect as Fund Balance-assigned for Encumbrances is used to track encumbered funds, and the encumbrance has already been lapsed. Option C is incorrect as all transactions should be recorded in the year in which they occur. Option D is incorrect as the encumbrance has already been lapsed, and the journal entry should be for the actual expenditure.

The General Fund of Loveland Ordered a New Fire Truck