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Identify journal entry required to be passed in encumbrance accounting for the following transaction on cancellation of purchase order: Purchase order for the third Equipment

Identify journal entry required to be passed in encumbrance accounting for the following transaction on cancellation of purchase order: Purchase order for the third Equipment was cancelled as per the discussion with the supplier. (Purchase order was issued, last month, for three Equipment costing OMR 9,000 each)

a.

Dr. Encumbrance 9,000 and Cr. Encumbrance Reserve 9000

b.

Dr. Encumbrance Reserve 9,000 and Cr. Encumbrance 9,000

c.

Dr. Encumbrance Reserve 27,000 and Cr. Encumbrance 27,000

d.

None of these

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