Which of the following is the appropriate basis of accounting for a custodial fund?

Question

Quizplus · Accepted Answer

Custodial funds, as part of governmental accounting, use the 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. This approach is appropriate for custodial funds because it accurately reflects the financial position and activities of the fund over time, including receivables and liabilities.

Which of the Following Is the Appropriate Basis of Accounting