Encumbrance accounting records commitments made for goods on order and for unperformed contracts.

Name: Encumbrance accounting records commitments made for goods on order and for unperformed contracts.
Brand: Quizplus
Rating: 4.8 (43 reviews)

Question

Quizplus · Accepted Answer

Encumbrance accounting is a method of accounting for commitments made for goods or services that have not yet been received or performed. It is used to prevent overspending by ensuring that funds are set aside for these commitments and can be tracked separately from actual expenditures.

Encumbrance Accounting Records Commitments Made for Goods on Order and for Unperformed