Which of the following fund types uses modified accrual accounting?
A) Debt Service
B) Internal Service
C) Investment Trust
D) Enterprise

Question

Quizplus · Accepted Answer

Debt Service funds use modified accrual accounting, which means that revenue is recognized when it is measurable and available to finance current period expenditures, while expenditures are recognized when they are incurred. This method of accounting is used for funds that have a short-term focus and are heavily reliant on cash flows. Internal Service funds use full accrual accounting, while Investment Trust and Enterprise funds may use either modified accrual or full accrual accounting depending on the type of activities they engage in.

Which of the Following Fund Types Uses Modified Accrual Accounting