Which of the following funds would use the modified accrual basis of accounting in preparing its fund financial statements?
A) City Electric Utility Enterprise Fund.
B) City Hall Capital Projects Fund.
C) City Motor Pool Internal Service Fund.
D) City Employee Pension Trust Fund.

Question

Quizplus · Accepted Answer

The City Hall Capital Projects Fund would use the modified accrual basis of accounting because it is a governmental fund. Modified accrual accounting is typically used by governmental funds, while proprietary and fiduciary funds (like enterprise, internal service, and pension trust funds) use the full accrual basis of accounting.

Which of the Following Funds Would Use the Modified Accrual