In 2008, New City issued purchase orders and contracts of RO 850,000 that were chargeable against 2008 budgeted appropriations of RO 1,000,000.The Journal Entry to record the issuance of the purchase orders and contracts should include a _____________.

a.

Debit to Expenditures RO 1,000,000

b.

Credit to Vouchers Payable of RO 1,000,000

c.

Debit to Appropriations RO 850,000

d.

Credit to Budgetary Fund Balance Reserve for Encumbrances RO 850,000