The primary objective of using an encumbrance system is to keep track of an organization's ________.

Question

Quizplus · Accepted Answer

An encumbrance system is used to track commitments made for the acquisition of goods and services. It helps organizations to monitor their approved budgets and ensure that they have enough funds available to cover their commitments. This is different from actual expenditures, which are recorded after goods and services have been received and paid for. While purchases of goods and services and capital assets may be tracked using an encumbrance system, the primary objective is to track commitments.

The Primary Objective of Using an Encumbrance System Is to Keep