Which of the following would be reported on the operating statement of a governmental fund?
A)Incurrence of a liability for the annual contribution to the employee retirement plan.
B)Depreciation expense.
C)Amortization expense.
D)Revenue related to prior periods.

Question

Quizplus · Accepted Answer

Governmental funds use the modified accrual basis of accounting, which recognizes expenditures when liabilities are incurred. Therefore, the incurrence of a liability for the annual contribution to the employee retirement plan would be reported on the operating statement. Depreciation and amortization expenses are not reported in governmental funds, and revenue related to prior periods would not typically be recognized in the current period's operating statement.

Which of the Following Would Be Reported on the Operating