As used in defining the modified accrual basis of accounting, the term "available" means
A)received in cash.
B)will be received in cash within 60 days of year-end.
C)collection in cash is reasonably assured.
D)collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period.

Question

Quizplus · Accepted Answer

The modified accrual basis of accounting requires revenues to be recognized when they are measurable and available. "Available" in this context means either collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. Choice A is too narrow as it only includes cash received, while choice B has a specific time frame that may not apply to all revenues. Choice C is also too narrow as it only considers collectibility and does not address the timing of collection. Therefore, choice D is the best answer.

As Used in Defining the Modified Accrual Basis of Accounting