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ACC380_Week2 Discussion 1

ACC380_Week2 Discussion 1 - I a In regards to the modified...

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Unformatted text preview: I. a) In regards to the modified accrual basis of accounting, revenues are recognized when they are measurable and available. This means that revenues can only be recognized when a reasonable estimate of the amount can be made and when that amount is likely to be collected in an amount of time reasonable to pay the current periods liabilities. The revenue from property taxes is only recognized if it is expected to be collected within 60 days from the end of the fiscal year. b) The modified accrual basis of accounting recognizes expenditures when goods and services are received. There is an exception for debt service expenditures; these are not recognized until the maturity date, there is no accrual of debt service expenditures. There is another exception for certain expenditures such as compensated absences or special termination benefits; these expenditures are only recognized when resources are available for payment, any additional amount is reported on the financial statements as a long-term liability. II. The GAAP basis of accounting recognizes revenue when it is measurable and available while the bugetary basis recognizes revenue when it is received....
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