A government that uses the encumbrance method for purchases of goods and services is not required to use encumbrance accounting for its payrolls.

Question

Quizplus · Accepted Answer

If neither law nor good financial management requires the use of encumbrance accounting for payrolls, which is typically the case, there is no need to use the encumbrance method. An exception might be when payroll varies substantially from period to period, perhaps due to seasonal part-time employment.

A Government That Uses the Encumbrance Method for Purchases of Goods