Encumbrances Definition | Becker
Accounting Dictionary
Encumbrances
Open purchase orders represent an encumbrance or reduction of the appropriations of a government. In order for governmental managers to effectively monitor the degree to which they have used their budgetary appropriations, governmental accounting systems reflect not only the expenditures but also the obligations to spend (purchase orders). This is done to prevent overspending of appropriations. See also expenditures and budgetary accounts.
Related Terms:
Expenditures [FARBAR]Budgetary Accounts [FARBAR]Back to Dictionary