Chap018-baker 4

Chap018-baker 4 - b. For the general fund, the modified...

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Chapter 18 - Governmental Entities: Special Funds and Government-Wide Financial Statements 18-4 SOLUTIONS TO CASES C18-1 Basis of Accounting and Reporting Issues a. In the accrual basis of accounting, revenue should be recognized in the accounting period in which it is earned and becomes measurable. In the modified accrual basis of accounting, revenue should be recognized in the accounting period in which it becomes both measurable and available to finance expenditures of the fiscal period. "Available" means collectible within the current period or soon enough thereafter to be used to pay current period liabilities.
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Unformatted text preview: b. For the general fund, the modified accrual basis of accounting should be used because it is a governmental fund, which is, in essence, an accounting segregation of financial resources. For the special revenue fund, the modified accrual basis of accounting should be used because it is a governmental fund, which is, in essence, an accounting segregation of financial resources. For the enterprise fund, the accrual basis of accounting should be used because it is a proprietary fund, with activities similar to those in the commercial, profit-seeking sector....
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This note was uploaded on 10/09/2011 for the course ACC 253 taught by Professor Strimling during the Fall '11 term at Harper.

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