A company implements Dynamics 365 Finance for budget control. Encumbrance accounting is enabled. The company must subtract confirmed purchase order amounts from the available budget fund. You need…

The correct answer is C. Budget reservations for encumbrances. If you record encumbrances for purchase orders in the general ledger, including purchase orders for projects, you can generate closing entries in the general ledger and against budget reservations at the end of each fiscal year. At the start of the new fiscal year, you can…

Manage budgeting

Question

A company implements Dynamics 365 Finance for budget control. Encumbrance accounting is enabled. The company must subtract confirmed purchase order amounts from the available budget fund. You need to configure the available budget fund for budget control. Which configuration should you use?

Options

ABudget reservations for pre-encumbrances
BBudget reservations to reduce unconfirmed encumbrances
CBudget reservations for encumbrances
DBudget reservations for unconfirmed pre-encumbrances

How the community answered

(24 responses)

A
4% (1)
B
13% (3)
C
79% (19)
D
4% (1)

Explanation

If you record encumbrances for purchase orders in the general ledger, including purchase orders for projects, you can generate closing entries in the general ledger and against budget reservations at the end of each fiscal year. At the start of the new fiscal year, you can create opening entries to correctly record the encumbrances and budget reservations. These entries ensure that the reservations for purchase order encumbrances are correctly recorded on the year-end financial statements and in budget control. https://learn.microsoft.com/en-us/dynamics365/finance/budgeting/purchase-order-year-end-

Topics

#budget control#encumbrance#purchase order#available budget fund

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