Week 2 ACC 410

School: Kennesaw State University - Course: ACC 410 - Subject: Accounting

Chapter 3 EX. 3-2 Select the best answer. 1.Upon ordering supplies a government should a.Debit encumbrances and credit reserve for encumbrances b.Debit reserve for encumbrances and credit encumbrances c.Debit expenditures and credit encumbrances d.Debit expenditures and credit vouchers payable 2.Upon receiving supplies that had previously been encumbered a government should a.Debit reserve for encumbrances and credit encumbrances b.Debit fund balance and credit reserve for encumbrances c.Debit fund balance and credit expenditures d.Debit reserve for encumbrances and credit expenditures 3.Upon closing the books at year‐end, a government should a.Debit fund balance and credit reserve for encumbrances b.Debit encumbrances and credit reserve for encumbrances c.Debit fund balance and credit encumbrances d.Debit reserve for encumbrances and credit encumbrances

4.A government requires that all appropriations lapse at the end of a year. At the end of Year 1, that government has $100,000 of goods and services on order. At the start of Year 2, the government should a.Debit fund balance and credit encumbrances b.Debit reserve for encumbrances and credit encumbrances c.Debit encumbrances and credit reserve for encumbrances d.Debit encumbrances and credit fund balance 5.Which of the following accounts would a government be most likely to debit as part of its year‐end closing process? a.Appropriations, encumbrances, and estimated revenues b.Estimated revenues, appropriations, and reserve for encumbrances c.Revenues, appropriations, and encumbrances d.Revenues, appropriations, and fund balance 6.A government places an order for a particular item of equipment and encumbers $5,500. The item arrives accompanied by an invoice for $5,200. The entries that the government should make should include (but are not necessarily be limited to): a.A debit to expenditures for $5,200, a debit to fund balance for $300, and a credit to reserve for encumbrances for $5,500 b.A debit to expenditures for $5,200, a credit to encumbrances for $5,200, and a credit to accounts payable for $5,200 c.A debit to expenditures for $5,200, a credit to encumbrances for $5,500, and acredit to accounts payable for $5,200