Encumbrance accounting is typically used for Permanent Funds.

Name: Encumbrance accounting is typically used for Permanent Funds.
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Encumbrance accounting is typically used for governmental funds, such as the General Fund, to track commitments related to expenditures, not for Permanent Funds, which are used to account for resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs.

Encumbrance Accounting Is Typically Used for Permanent Funds