A University That Formally Integrates the Budget in the Accounting

Multiple Choice

A university that formally integrates the budget in the accounting system and uses encumbrance accounting orders some new computers that will cost approximately $20,000.To recognize this event the university should make which of the following entries?

A) Debit Expenditures $20,000; credit Encumbrances $20,000
B) Debit Encumbrances $20,000; credit Reserve for encumbrances $20,000
C) Debit Encumbrances $20,000; credit Accounts payable $20,000
D) No entry required when the order is placed.