What types of costs are NOT typically recorded as encumbrances?

The correct answer highlights that salaries and wages are not typically recorded as encumbrances because encumbrances primarily represent commitments for expenditures that are expected to occur in the future, usually related to the purchase of goods and services. An encumbrance is used in governmental accounting to reserve funds for expenses that are planned but not yet incurred.

Salaries and wages are considered expenditures that occur regularly based on employment contracts and payroll schedules, and they are generally recorded directly as expenditures in the accounting period in which the employees provide services.

On the other hand, capital project expenditures, interest on bonds, and materials and supplies purchases often involve a planned allocation of resources that can be encumbered in advance, making them suitable for encumbrance accounting. This helps in tracking budgetary compliance and ensuring that funds are appropriately reserved for those future costs.