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A city government is currently preparing fund-based financial statements. What guides the timing of recognition for the transactions to be reported?
Governmental funds are prepared using the modified accrual basis of accounting, while proprietary funds use regular accrual accounting.
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Which of the following is true regarding cash basis and accrual basis revenue in regards to accounts receivable?
Under both the cash and accrual basis of accounting, reductions in accounts receivable is generally due to cash collections.
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When adjusting service revenue from cash basis to accrual basis, which of the following adjustments must be made?
To adjust cash received to accrual basis income, ending AR is added back to cash received and beginning AR is subtracted.
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Under modified accrual basis accounting, revenue is recognized when:
Modified accrual is used by governmental funds and income is recognized when it can be reasonably measured and when it is available for usage during the year or 60 days after.
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