Underlying Factors That Cause Activities to Be Performed and Their

question 28

True/False

Underlying factors that cause activities to be performed and their costs to be incurred are known as root cause cost drivers.

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Definitions:

Encumbrance System

A system used in accounting to reserve portions of appropriated funds to avoid overspending, primarily used by governments.

Estimated Commitments

Obligations or contracts that a company is likely to incur in the future based on past or planned activities.

Journal Entry

A record in accounting that represents the recording of a financial transaction in a journal.

Restricted Funds

Funds that are constrained by external parties or legislation for specific purposes and cannot be freely used for any other expenditures.