Choice "C" is correct. Governmental funds use modified accrual accounting. Under modified accrual accounting, the issuing of a purchase order (commitment to purchase) is recorded for internal bookkeeping as:

Choice "d" is incorrect. The issue of a purchase order will not impact appropriations. Appropriation accounts are adjusted upon the adoption or amendment of the budget and are closed at the end of the year.Choice "b" is incorrect. The issue of a purchase order will not impact expenditures. Expenditure accounts are adjusted when obligations are incurred or paid and when accounts are closed at the end of a fiscal period.Choice "a" is incorrect. The issuance of a purchase order results in an encumbrance transaction in governmental funds. In addition, fixed assets are not recorded in governmental funds.