Which of the following is not true regarding the Statement of Revenues,Expenses and Changes in Net Position for a public college reporting as a special purpose entity engaged in business type activities only?
A) The accrual basis of accounting is used to measure revenues and expenses.
B) Encumbrances are recorded at the time purchase orders are issued.
C) Depreciation expense is recorded.
D) All of the above are true.

Question

Quizplus · Accepted Answer

Public colleges reporting as a special purpose entity engaged in business type activities only do not typically use encumbrances to record purchases. Instead, they typically use a budgetary control system. The other options listed are true statements about the Statement of Revenues, Expenses and Changes in Net Position for this type of entity.

Which of the Following Is Not True Regarding the Statement