When a Liability Is Incurred as Authorized by an Appropriation,the

question 26

Multiple Choice

When a liability is incurred as authorized by an appropriation,the appropriation is said to be:

• A) Encumbered
• B) Appropriated
• C) Expended
• D) Expensed

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Definitions:

Working Capital

Working capital is the difference between a company's current assets and current liabilities, indicating its short-term financial health and operational efficiency.

Long-Term Liquidity

Measures a company's ability to meet its long-term financial obligations, indicating financial health over a prolonged period.

Contingent Liability

A potential financial obligation that may occur in the future, depending on the outcome of a specific event.

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.