A Debt Due to Be Paid Within One Year (Or

question 92

True/False

A debt due to be paid within one year (or operating cycle,if longer)is a current liability.

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Definitions:

Encumbrance System

A method or system for tracking claims, liens, or restrictions on property to ensure clear title or usage rights.

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future.

Obligation Recorded

The accounting process of documenting a liability or duty to pay an amount as a result of a contractual agreement or other legal requirement.

Restricted Fund Method

An accounting method used for reporting restricted funds separately from unrestricted funds in nonprofit organizations' financial statements.