Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures is an example of a restricted fund balance.

Name: Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures is an example of a restricted fund balance.
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Question

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Encumbrances are used to record commitments of the government to purchase capital assets, goods or services. Encumbrances and Budgetary Fund Balance - Reserve for Encumbrances are budgetary accounts and do not appear in the financial statements.

Outstanding Encumbrance of $80,000 for the Purchase of Furniture