The Primary Objective of Using an Encumbrance System Is to Keep

question 9

Multiple Choice

The primary objective of using an encumbrance system is to keep track of an organization's ________.

• A)purchase of goods and services
• B)commitments made for the acquisition of goods and services
• C)purchase of capital assets
• D)expenditures

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Definitions:

Closing Inventories

The total value of goods available for sale at the end of an accounting period, recorded on the balance sheet.

Non-Controlling Interests

The portion of equity in a subsidiary not attributable directly or indirectly to the parent company, sometimes referred to as minority interest.

Retained Earnings

Profits that a company retains for reinvestment in its operations, rather than distributing to shareholders as dividends.

Reporting Period

A specified duration of time for which an organization prepares its financial statements and reports to present its financial performance and position.