reserve for encumbrances Definition | Business Dictionaries from AllBusiness.com
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Business Definition for: reserve for encumbrances
reserve for encumbrances

in government accounting , account reflecting part of the fund balance that has been committed by a contract, purchase order, salary agreement, travel claim, etc. Therefore, reserve for encumbrances represents a reservation of the fund's equity. Entries for this account occur when an encumbrance comes into being and when the actual expenditure is later made.

Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.

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