Under the modified accrual basis of accounting, imposed nonexchange revenues such as fines should be recognized
A)when assessed.
B)when the government has an enforceable legal claim.
C)when collected.
D)when the government has an enforceable legal claim and when the collected within the current period or soon enough thereafter to be used to pay the liabilities of the current period.

Question

Quizplus · Accepted Answer

Under the modified accrual basis of accounting, imposed nonexchange revenues such as fines should be recognized when the government has an enforceable legal claim and when the collected within the current period or soon enough thereafter to be used to pay the liabilities of the current period. This is because the revenue is not earned until the government has the legal right to collect it and can use it for current period obligations.

Under the Modified Accrual Basis of Accounting, Imposed Nonexchange Revenues