An Encumbrance Represents the Estimated Future Liability for Goods or Services

question 76

True/False

An encumbrance represents the estimated future liability for goods or services resulting from placing a purchase order or signing a contract.

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Definitions:

Resource Endowments

The natural resources, capital, and other economic assets that a country possesses, impacting its economic potential.

World Price

The international market price of a good or service, determined through global supply and demand interactions.

Diminishing Returns

The principle that if one factor of production is increased while others remain constant, the overall returns will eventually decrease after reaching an optimal level.

Opportunity Cost

The act of foregoing potential opportunities for gain from several alternatives when deciding on one.