Use of modified accrual accounting:
A) eliminates the need for keeping track of encumbrances during budget execution.
B) records expenditures when contractual payments are made.
C) records expenditures when materials are delivered
D) requires immediate depreciation of all capital assets.

Question

Quizplus · Accepted Answer

Modified accrual accounting records expenditures when goods or services are received (i.e., when the obligation is incurred), which aligns with option C, stating expenditures are recorded when materials are delivered. This method does not eliminate the need for tracking encumbrances, does not record expenditures solely based on payments, and does not require immediate depreciation of capital assets.

Use of Modified Accrual Accounting