What is the difference between obligation and commitment of funds?

What is the difference between obligation and commitment of funds?

• A. Obligation is the legally binding commitment to make payment; Commitment is setting aside funds to cover a purchase.
• B. Obligation sets aside funds; Commitment obligates payment.
• C. Obligation and commitment are the same.
• D. Obligation is only an accounting entry; Commitment is a legal action.

Answer: (A)