The Encumbrances Outstanding account is properly termed a
A) Long-term liability.
B) Reservation of unassigned fund balance.
C) Budgetary account.
D) Current liability if paid within a year; otherwise,long-term debt.

Question

Quizplus · Accepted Answer

The Encumbrances Outstanding account is a budgetary account that represents commitments for goods or services that have been ordered but not yet received or paid for. It is not considered a liability as it does not represent an actual debt or obligation. Instead, it helps to ensure that funds are set aside to cover future expenses and to prevent overspending in the current fiscal year.

The Encumbrances Outstanding Account Is Properly Termed a