C is corrent. “Reserved for Encumbrances” is a budgetary account. When goods or services are ordered (purchase order approved), appropriations are encumbered, or restricted from use, in the amount of the estimated purchase cost. The following entry is made which increases reserved for encumbrances:
A is incorrect. Reserved for Encumbrances is increased when a purchase order is approved.
A is incorrect. Reserved for Encumbrances is increased when a purchase order is approved.
D is incorrect. Reserved for Encumbrances is increased when a purchase order is approved.
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