Recognizing revenues when measurable and available for paying current obligations and expenditures when incurred describes which basis of accounting?
A) Accrual.
B) Modified accrual.
C) Modified cash.
D) Budgetary.

Question

Quizplus · Accepted Answer

This description of recognizing revenues aligns with the modified accrual basis of accounting, which is commonly used by government entities. This basis of accounting recognizes revenues when they are measurable and available, meaning they are both earned and can be collected soon enough to be used to pay for current expenses. It also recognizes expenditures when they are incurred, meaning goods or services are received and the obligation to pay is established.

Recognizing Revenues When Measurable and Available for Paying Current Obligations