Your customer has enabled encumbrance accounting. You have a control budget with the advisory level set at
control. For November 2015, your budget for a given combination is $5,000 USD. You have an approved
requisition of $900 USD and you have an approved purchase order of $2,500 USD. An adjustment
encumbrance journal is created in the General Ledger for the obligation type for $1,600 USD. You then
cancelled the approved PO line of $400 USD. For November 2015, you created a new invoice by matching to
the PO for $2,100 USD.
Which two statements are true?
A.
Purchase order encumbrance will be released for $2,100 USD.
B.
As there are cancellations for $400 USD, the system will partially reserve the funds in November 2015 and
fully reserve it in December 2015.
C.
As you are matching to a purchase order, the system will allow the user to create an invoice with the
reservation status of Reserved.
D.
Encumbrance entries are created only for nonmatched invoices, so the system will not create any
encumbrance accounting entries.
E.
The system always consumes budget of future periods if the limit for the current period is expired, so
December 2015 budget will be considered for reservation.
A C
One of the two answers is D since in AP encumbrance is created for unmatched invoice only. The other answers are not clear and hence not able to choose the remaining one answer though B comes closer to the correct answer. When you do partial cancellation of PO, it will reverse the PO encumbrance partially.