When resources are available for Debt Service Fund payments and those payments will be made within the first month of the next accounting period, governments have the option, under GAAP, to record the liability and the associated expenditures for bond principal and interest at the end of the year before the payments are due.

Question

Quizplus · Accepted Answer

This is an exception to the general rule that expenditures for bond principal or interest on long-term debt should not be accrued until it become legally due (matures). The exception allows governments to record bond principal and interest payments due early in the next fiscal year as part of their current year budget expenditures and as the government may have to make payments to its fiscal agent prior to the end of its current fiscal year.

When Resources Are Available for Debt Service Fund Payments and Those