Which of the following statements is TRUE?
A)The deferral method of accounting generally results in a higher level of revenue than the restricted fund method.
B)The deferral method of accounting generally results in a higher level of revenue than the restricted fund method only if capital asset amortization is involved.
C)The deferral method of accounting generally results in a lower level of revenue than the restricted fund method.
D)The deferral method of accounting results in the same amount of revenue as the restricted fund method.

Question

Quizplus · Accepted Answer

The deferral method defers recognition of revenue until it is earned and measurable, while the restricted fund method recognizes revenue when it is received and restricted for a specific purpose. Therefore, the deferral method generally results in a lower level of revenue than the restricted fund method.

Which of the Following Statements Is TRUE