Given a specific set of data, the basis of accounting selected by or imposed on a government will impact which of the following the LEAST?
A) Determining whether the government has a balanced budget.
B) Determining whether the government has the ability to issue debt.
C) Determining whether certain economic events occurred.
D) Determining the annual payments to a government-sponsored pension plan.

Question

Given a specific set of data, the basis of accounting selected by or imposed on a government will impact which of the following the LEAST? 
A) Determining whether the government has a balanced budget.
B) Determining whether the government has the ability to issue debt.
C) Determining whether certain economic events occurred.
D) Determining the annual payments to a government-sponsored pension plan.

Quizplus · Accepted Answer

The basis of accounting primarily affects how transactions and events are recognized and reported in financial statements. It has a significant impact on budgeting, debt issuance capabilities, and pension plan payments. However, it has the least effect on determining whether certain economic events occurred, as these events happen independently of accounting practices.

Given a Specific Set of Data, the Basis of Accounting