[JT]

Is “fund balance reserve for encumbrances” the same as “encumbrances outstanding” the same as “reserved encumbrances”?

I have no idea why they name it differently. Its named differently everywhere and its only confusing me more!.

I’m trying to understand how to record PO’s when they’re issued.

I think its:

Debit Encumbrances

Credit “Fund Balance reserved for encumbrances/encumbrances outstanding/reserved encumbrances”

REG-80-1X
BEC-80-1X
FAR-73-1X
FAR-75-2X
AUD-September 2016

[Spartans92]

Dab, Encumbrances are simply money you put aside or a reminder that you have outstanding bills (like a post-it or note to self). When you issue a Purchase order you would then DR: Encumbrances CR: Budgetary Control.
Outstanding encumbrances is pretty much what you reserve for your bills. Which needs to be closed out at the end of the period then you would reverse the JE (Same amount). Basically the purpose of encumbrances is to make sure you aren't overspending and staying on budget. Hope that helps.

BEC- PASS

[JT]

it does.

Thank you

REG-80-1X
BEC-80-1X
FAR-73-1X
FAR-75-2X
AUD-September 2016

[Author]

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