Capital Projects funds recognize encumbrances and expenditures,not expenses.

Question

Quizplus · Accepted Answer

Capital Projects funds are used for the acquisition, construction, or improvement of long-term capital assets. Therefore, they focus on the funding and spending of capital projects and recognize encumbrances (commitment of funds for an order or contract) and expenditures (actual payment of funds) but do not recognize expenses (the consumption of goods or services).

Capital Projects Funds Recognize Encumbrances and Expenditures,not Expenses