At the end of the 2017 fiscal year the General Fund had $500 in encumbrances that remained opened into fiscal year 2018. In 2018 the encumbered goods were received at an invoiced cost of $520. How much would be recorded as the 2018 expenditure?

$20 will be recorded as the 2018 expenditure.

Explanation:

In this case, $500 is the remaining in the General Fund for 2017 fiscal year in encumbrances that remained opened into fiscal year 2018.

In 2018, since encumbered goods were received at an invoiced cost of $520, $20 will be recorded as the 2018 expenditure after deducting the carry-forward of 2017 encumbered fund balances of 2017.

First balances carry-forwarded are utilized and then the funds allocated to the General fund for the current fiscal i.e 2018 is utilized. Hence the actual amount that would be recorded as the 2018 expenditure will be $520 - $500 carry forward from 2017 = $20.

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