Under the modified accrual basis of accounting
A)expenditures are recognized when paid in cash if not previously encumbered
B)property tax revenues are recognized when earned
C)property tax revenues are recognized when measurable and available
D)encumbrances are equivalent to expenditures

Question

Quizplus · Accepted Answer

Under the modified accrual basis of accounting, property tax revenues are recognized when measurable and available. This means that the revenue must be both measurable (the amount can be reasonably estimated) and available (the funds are expected to be collected within a reasonable timeframe). Expenditures, on the other hand, are recognized when they are incurred, not necessarily when they are paid in cash. Encumbrances represent commitments to spend funds and are not equivalent to expenditures.

Under the Modified Accrual Basis of Accounting