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Prepare a budgetary comparison statement for the General Fund of Murphy County for the 20X8 fiscal year. The statement should present revenues (by source category), expenditures and encumbrances (by function), and the excess of revenues over (under) expenditures and encumbrances. Use these column headings: Original Budget Revised Budget Actual Variance-Favorable (Unfavorable) Assume that no encumbrances were outstanding at the beginning of 20X8. 2. Because encumbrances do not constitute expenditures, some governmental fund budgetary comparison statements omit data on encumbrances.
(a) If no encumbrances were outstanding at the beginning of 20X8, what effects would omission of encumbrances data have on the Murphy County General Fund budgetary comparison statement for the 20X8 fiscal year?
(b) In what circumstances would including or excluding encumbrances data mislead users of a governmental fund budgetary comparison statement?
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