B is corrent. Per GASB Codification Section 1600, the measurement focus of governmental fund accounting is on expenditures rather than expenses. Expenditures are defined as decreases in fund financial resources from activities other than interfund transactions. Salaries and wages are recorded by a debit to Expenditures control and a credit to Vouchers Payable.
A is incorrect because there is no operating fund.
C is incorrect because an expense account is not used.
D is incorrect because encumbrances are not required for regular periodic expenditures such as salaries and wages.
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