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Your customer has enabled budgetary control for purchase orders. They have a purchase order for $1,000 USD which is fully reserved. An invoice for $600 is entered and matched to the purchase order, and the purchase order is closed for further invoicing. What happens to the remaining $400 USD?
Correct Answer: C
When a purchase order is closed for invoicing, any remaining encumbrance amount is liquidated automatically. This means that the reserved funds are released and added back to the available funds for the budget. You do not need to enter a manual encumbrance journal or perform any other action to release the budget amount. Reference: Oracle Financials Cloud: General Ledger 2022 Implementation Professional Objectives - Process Budget Journals 12