If the actual liability for goods or services ordered in the current year differs from the estimated liability,the Encumbrances account should be credited in the amount of the estimated liability when the goods or services were ordered.

Question

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If the actual liability for goods received differs from the estimated liability (which is often the case), the Encumbrances account is credited for the estimated liability that was originally debited.

If the Actual Liability for Goods or Services Ordered in the Current