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

Question

Quizplus · Accepted Answer

Proprietary funds of a government operate in a manner similar to private businesses, and thus they use the full accrual basis of accounting. This method recognizes revenues when they are earned and expenses when they are incurred, regardless of when cash is received or paid.

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