Accounting Dictionary
Commitments
Money set aside to pay a bill you know you will be receiving in the future.
Susan’s company bought a $500,000 machine. She has set aside a $500,000 bank CD so she will be able to pay the bill when it is received. The CD would be considered a commitment.
https://accounting.uworld.com/cpa-review/lc/accounting-dictionary/term/commitments/
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