Albee Township's fiscal year ends on June 30. Albee uses encumbrance accounting. On April 5, year 1, an approved $1,000 purchase order was issued for supplies. Albee received these supplies on May 2, year 1, and the $1,000 invoice was approved for payment. What journal entry should Albee make on April 5, year 1, to record the approved purchase order?

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Business

Adrien Prince

9 June, 08:07

Albee Township's fiscal year ends on June 30. Albee uses encumbrance accounting. On April 5, year 1, an approved $1,000 purchase order was issued for supplies. Albee received these supplies on May 2, year 1, and the $1,000 invoice was approved for payment. What journal entry should Albee make on April 5, year 1, to record the approved purchase order?

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Leila Ball · Answer 1

Encumbrances $1000

Reserved for encumbraces $1000

Explanation:

Encumbrance is in the debit because is the money that we have destined for the purchase and since we have to get the money from our funds Reserved for encumbrances is in the credit.