Which of the following is not an accepted modification of the accrual basis concerning the recognition of expenditures in governmental funds?
A) Vacations and sick leave should never be accrued.
B) Capital assets should be reported as expenditures when the assets are acquired.
C) Inventory and the costs of using supplies may be accounted for using the consumption method.
D) Claims and judgments should be reported as expenditures only insofar as they will be paid out of current financial resources.

Question

Quizplus · Accepted Answer

Vacations and sick leave should be accrued as liabilities when earned, even if they are not paid out of current financial resources, according to the modified accrual basis used in governmental accounting.

Which of the Following Is Not an Accepted Modification of the Accrual