Filter by Categories
Accounting
Banking

Accounting




Encumbrance


In accounting, encumbrance is a commitment to spend a certain amount of money for a particular purpose at a certain point in time.

For example, encumbrance may arise from a situation where an entity enters into a contract with a supplier, via purchase order, to receive a certain amount of good after the passage of six months. The amounts assigned to such a future payment are encumbered on account of the underlying commitment.

Certain expense items are typically encumbered. Examples include items of operating expense such as salary commitment, end of service payments, etc.



ABC
Accounting is the language of business, everywhere, worldwide. It is the means by which virtually every business communicates information about its operations, irrespective of size, scale, objectives, ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*