Choice "D" is correct. A purchase order is a binding document and thus is recorded when issued. The journal entry made for internal accounting when a purchase order is issued is:
| Debit (Dr) | Credit (Cr) |
|---|
| Encumbrances | $ XXX | |
| Budgetary control | | $ XXX |
Choice "c" is incorrect. Appropriations control is credited when the budget is set up, not when a purchase order is issued.Choice "a" is incorrect. Vouchers payable is credited when goods are received.Choice "b" is incorrect. Encumbrance control is credited when goods are received and budgetary control is debited.
