Choice "D" is correct. The issuance of purchase orders or the signing of contracts represents a commitment to expend resources. Such a commitment is recorded as an encumbrance and a credit to budgetary control. The entry to record the issuance of the purchase orders and contracts is:

Choice "c" is incorrect. Vouchers payable is credited when expenditures are incurred not when purchase orders are issued. Issuance of a purchase order results in an encumbrance.Choice "b" is incorrect. Expenditures are recorded for the amount incurred when goods are received. The appropriation of funds represents a planned and generally authorized expenditure, not an expenditure itself.Choice "a" is incorrect. Appropriations are recorded when the budget is formally integrated into the accounting system. New City would have recorded a $1,000,000 appropriation and would not have made any charge to appropriations at the time the purchase order is let. Governments record and reverse budgets, activity, and encumbrances (BAE).