A liability for compensated absences that is created during the current period but that is not expected to be paid for several years would not result in the reporting of Expenditures in the current-period operating statement of the General Fund-at the fund-based reporting level.

Question

Quizplus · Accepted Answer

Under the modified accrual basis of accounting used in governmental fund financial statements, expenditures are recognized in the period the fund liability is incurred, if measurable. However, liabilities for compensated absences that are not expected to be liquidated with expendable available financial resources are not reported as expenditures in the current period but are recognized in the period in which they are expected to be liquidated with available resources.

A Liability for Compensated Absences That Is Created During the Current