The appropriate basis of accounting for the proprietary funds of a governmental entity is
A)Cash basis.
B)Modified accrual.
C)Full accrual.
D)None of the above.

Question

Quizplus · Accepted Answer

The proprietary funds of a governmental entity are enterprise funds and internal service funds that are primarily charged with providing goods or services to other funds or departments within the government. Since these funds operate similarly to businesses, full accrual basis of accounting is appropriate for them. This means that transactions are recognized when they occur, regardless of when cash is received or paid. This method provides a more complete picture of the financial position and operating results of these funds. Therefore, Option C is the best choice.

The Appropriate Basis of Accounting for the Proprietary Funds of a Governmental