Which one of the following statement about encumbrance is correct? a. Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as assets b. None of the options c. Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as liabilities d. Encumbrances are recorded at the estimated cost of goods ordered or services contracted for. The subsequent amount recognized as expenditures upon receipt of the goods and services may differ from the encumbered amount.
Which one of the following statement about encumbrance is correct? a. Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as assets b. None of the options c. Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as liabilities d. Encumbrances are recorded at the estimated cost of goods ordered or services contracted for. The subsequent amount recognized as expenditures upon receipt of the goods and services may differ from the encumbered amount.
Chapter3: Analyzing And Recording Transactions
Section: Chapter Questions
Problem 12MC: Which of the following principles matches expenses with associated revenues in the period in which...
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Which one of the following statement about encumbrance is correct?
a.
Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as assets
b.
None of the options
c.
Encumbrances are equivalent to expenditures and encumbrances outstanding at the end of a year should be reported as liabilities
d.
Encumbrances are recorded at the estimated cost of goods ordered or services contracted for. The subsequent amount recognized as expenditures upon receipt of the goods and services may differ from the encumbered amount.
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