When a governmental entity adopts a basis of accounting other than full accrual and a measurement focus that excludes long-lived assets and liabilities in its governmental fund types:
A) It is in violation of the law.
B) It is in violation of GAAP.
C) It has reported in accordance with GAAP for governmental fund financial statements.
D) It can better measure the results of operations.

Question

When a governmental entity adopts a basis of accounting other than full accrual and a measurement focus that excludes long-lived assets and liabilities in its governmental fund types: 
A) It is in violation of the law.
B) It is in violation of GAAP.
C) It has reported in accordance with GAAP for governmental fund financial statements.
D) It can better measure the results of operations.

Quizplus · Accepted Answer

The Answer is C

When a Governmental Entity Adopts a Basis of Accounting Other