When a governmental entity adopts a basis of accounting other than full accrual and a measurement focus that excludes long-lived assets and liabilities in its governmental fund types:
A)It is in violation of the law.
B)It is in violation of GAAP.
C)It has reported in accordance with GAAP for governmental fund financial statements.
D)It has the ability to better measure the results of operations.

Question

Quizplus · Accepted Answer

Governmental fund financial statements are prepared using the modified accrual basis of accounting and the current financial resources measurement focus, which excludes long-lived assets and liabilities, in accordance with GAAP.

When a Governmental Entity Adopts a Basis of Accounting Other