When Is It Not Appropriate to Use an Encumbrance System

question 21

Multiple Choice

When is it not appropriate to use an encumbrance system?

• A)When there is a significant lag between purchase orders and the receipt of goods
• B)When reporting is done on an expenditure basis
• C)When only a small part of expenditures for goods and services are discretionary
• D)When commitments and expenditures are made on a decentralized basis

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