by Mark Marucot on July 23, 2010
Accrual Basis Accounting is the most commonly used accounting method which recognized revenue and expenses as follows: Revenue Recognition Revenue is recognized when the following conditions are met Income is earned when cash is received when products are delivered or services are provided Income is realized when it is reasonable to expect that cash will [...]
by Mark Marucot on July 23, 2010
In accounting, an encumbrance is an action of predefining future expenditures for a certain planned project, company expenses, etc. This will later on become actual expenditures when goods and services are received. The primary purpose of tracking encumbrances is to avoid overspending a budget. Encumbrances can also be used to predict cash outflow and as [...]