Governmental fund financial statements are prepared on the ________ basis of accounting.Proprietary fund financial statements are prepared on the ________ basis of accounting.
A)modified accrual; modified accrual
B)accrual; fund
C)modified accrual; accrual
D)blended; discrete

Question

Quizplus · Accepted Answer

Governmental fund financial statements are prepared on the modified accrual basis of accounting, which means that revenues are recognized when they become both measurable and available to finance current expenditures, and expenditures are recognized when the related liability is incurred. Proprietary fund financial statements, on the other hand, are prepared on the accrual basis of accounting, which means that revenues are recognized when earned, and expenses are recognized when incurred, regardless of when cash is received or paid.

Governmental Fund Financial Statements Are Prepared on the ________ Basis