Explain the nature of the accountant dilemma

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Question: A federal agency receives a separate appropriation for supplies. A large number of purchase orders marked "Rush" are processed in August. Because several clerks are on vacation, they are not recorded as obligations. The supplies are received in early September, before the end of the fiscal year. After matching the invoices with the receiving reports, the accountant finds the agency has insufficient funds to process many of the payments. On further inquiry, the accountant locates the batch of unrecorded purchase orders. He also finds that the supplies were used immediately upon receipt. He explains the problem to his immediate supervisor, who says, "Forget it. Just charge the bills to next year's appropriation." Explain the nature of the accountant's dilemma, and discuss what you think he should do.

Reference no: EM131704212

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