Encumbrance Accounts Need Not Be Closed at Year-End If the Government

question 13

True/False

Encumbrance accounts need not be closed at year-end if the government is required or intends to honor the encumbrances outstanding at year-end.

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Definitions:

Net Profit Margin Ratio

A financial performance metric that measures the percentage of net income derived from total revenue, showing how much of each dollar earned by the company is translated into profits.

Profit

The financial gain, particularly the difference between the amount earned and the amount spent in buying, operating, or producing something.

Sales Dollar

A measure of the revenue generated from the sale of goods or services, expressed in dollar amounts.

Revenue Accounts

Accounts that record the income a company generates from its business activities.