Custodial funds should utilize the modified accrual basis of accounting.

Name: Custodial funds should utilize the modified accrual basis of accounting.
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Question

Quizplus · Accepted Answer

Custodial funds, as part of governmental accounting, should utilize the accrual basis of accounting, not the modified accrual basis. This is because custodial funds typically involve holding assets for others, and the full accrual basis provides a more accurate reflection of these financial activities.

Custodial Funds Should Utilize the Modified Accrual Basis of Accounting