Assume a Capital Projects Fund of Henry County is holding investments as of the end of the fiscal year. Which of the following statements is true related to the interest earned on the investments?

Question

Quizplus · Accepted Answer

Accrued interest receivable and interest revenue should be reported in the Capital Projects Fund as of the end of the fiscal year. This is because according to GASB 62, interest earned on investments that is expected to be collected within 60 days of the end of the fiscal year should be accrued and reported in the current period. Therefore, Option A is the correct statement. Option B is incorrect because interest revenue should be recognized when earned, not just upon maturity. Option C is partially correct, as the government may have a choice in how to account for interest revenue, but it must follow GASB standards. Option D is incorrect because interest earned should be reported in the fund in which it is held.

Assume a Capital Projects Fund of Henry County Is Holding