In contrast to the accounting for debt service fund expenditures, the interest revenue on bonds held as investments should be accrued in the period the revenue is earned.

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In governmental accounting, interest revenue on bonds held as investments is recognized when it is earned, regardless of when it is received, following the accrual basis of accounting. This contrasts with the accounting for debt service fund expenditures, where expenditures are recognized when they are due.

In Contrast to the Accounting for Debt Service Fund Expenditures