Question

When supplies ordered for use in an activity accounted for in the General Fund of a government are received at an actual price which is less than the estimated price on the purchase order, the Encumbrance Control account is:

Answer 1

Answer: Credited for the original estimated price for the supplies.

Explanation:

The encumbrance account is a budgetary account and encumbrance refers to the funds that are restricted in an account and are typically reserved for a specific purpose.

When the supplies that are ordered for use in an activity accounted for in the General Fund of a government are received at an actual price which is less than the estimated price on the purchase order, the encumbrance control account will have to be credited using the original price that was estimated for the supplies.