One of the differences between accounting for a governmental unit and a commercial unit is that a governmental unit should:
A) not record depreciation expense in any of its funds.
B) always establish and maintain complete self-balancing accounts for each fund.
C) use only the cash basis of accounting.
D) use only the modified accrual basis of accounting.

Question

Quizplus · Accepted Answer

Governmental units use fund accounting, where each fund is a separate fiscal and accounting entity with a self-balancing set of accounts. This is different from commercial accounting, where the focus is on the business as a whole.

One of the Differences Between Accounting for a Governmental Unit