D is corrent because expenditures are the actual costs of acquiring goods and services.
A is incorrect because per GASB Codification Section 1700, encumbrances are recorded to record purchase orders and contracts; the final amount is not determined until the expenditure is recorded.
B is incorrect because the budget is the first estimate of future expenditures. Per GASB Codification Section 1700, budgets represent estimates.
C is incorrect because appropriations are the formalization of the budget, which is based on estimates per GASB Codification Section 1700. Appropriations represent maximum expenditure authority created by budget integration.
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