faisy
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Joined: 08 May 2010
Location: Australia
Online Status: Offline
Posts: 23
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| Posted: 18 Jul 2012 at 21:47 | IP Logged
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can anyone please help.
Q. During its fiscal yr ended june30 yr1. Cliff City
issued purchase orders totaling $500k, which were
properly charged to encumbrances at that time. Cliff City
appropriations do not lapse. Cliff Received goods and
related invoices at the encumered amounts totaling $4500k
before yr end. The remaining foods of $500k were not
received until after year-end. Cliff paid $4200k of the
invoices received during the year. What amount of Cliff's
encumrances were ourtstaning at June30 Yr.1.
a. 0
b. $300k
c. $500k (correct Answer)
d. $800k
Shouldn't it be zero, because at year end we reverse
everything with the same amount.
Mean to say, at year end
Dr. Reserve for Encumbrances $500
Cr Encumbrances ; ; $500
The Rule is
Book BAE & Close BAE with the same amount.
Can anyone help me that why isn't 0 and why it is $500.
thanks
Faisy
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Faisy
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Topic: Govt. Modified Accrual accounting
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