Encumbrances for $900,000 in Purchase Orders Are Outstanding at the Beginning

Multiple Choice

Encumbrances for $900,000 in purchase orders are outstanding at the beginning of 2020. Encumbrances for $800,000 in purchase orders are outstanding at the end of 2020. Which statement is true concerning a comparison of legal budgetary and GAAP budgetary expenditures for 2020?

A) Legal budgetary basis expenditures are $800,000 higher.
B) GAAP budgetary basis expenditures are $100,000 higher.
C) Legal budgetary basis expenditures are $100,000 higher.
D) GAAP budgetary basis expenditures are $900,000 higher.