All of the governmental funds use the modified accrual basis of accounting

Question

Quizplus · Accepted Answer

It is true that all of the governmental funds use the modified accrual basis of accounting. This means that revenues are recognized when they are measurable and available to finance current-period expenditures, while expenditures are recognized when they are incurred and expected to be paid with available resources within a reasonable timeframe. This basis of accounting is different from the accrual basis used in the private sector, which recognizes revenues when they are earned and expenses when they are incurred, regardless of when the cash is received or paid.

All of the Governmental Funds Use the Modified Accrual Basis