The Following Related Entries Were Recorded in Sequence in the General

Multiple Choice

The following related entries were recorded in sequence in the general fund of a municipality: The sequence of entries indicates that:

A) an adverse event was foreseen and a reserve of $15,000 was created; later the reserve was cancelled and a liability for the item was acknowledged.
B) an order was placed for goods or services estimated to cost $15,000; the actual cost was $15,350 for which a liability was acknowledged upon receipt.
C) encumbrances were anticipated but later failed to materialize and were reversed. A liability of $15,350 was incurred.
D) the first entry was erroneous and was reversed; a liability of $15,350 was acknowledged.