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State Whether These Statements Are True or False

Question 39

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State whether these statements are true or false.Discuss why the false statements are false.

Premises:

Responses:

To determine whether they have obtained sufficient revenues to cover their expenses,funds that account for governmental business-type activities use the modified accrual basis of accounting.

False

Basis of accounting refers to the timing of the recognition of assets,liabilities,revenues and expenses or expenditures.The basis of accounting facilitates what one is trying to measure.

True

Depreciation of capital assets is not recognized as an expense in a Special Revenue Fund,but it is recognized as an expense in an Internal Service Fund.

Property taxes are recognized as revenues in governmental type funds to the extent that they are collected in the year for which they are levied.

Under the modified accrual basis of accounting,expenditures are generally recognized in the period that goods and services are received,but there are a number of exceptions to that rule.

Premises:

To determine whether they have obtained sufficient revenues to cover their expenses,funds that account for governmental business-type activities use the modified accrual basis of accounting.

Basis of accounting refers to the timing of the recognition of assets,liabilities,revenues and expenses or expenditures.The basis of accounting facilitates what one is trying to measure.

Depreciation of capital assets is not recognized as an expense in a Special Revenue Fund,but it is recognized as an expense in an Internal Service Fund.

Property taxes are recognized as revenues in governmental type funds to the extent that they are collected in the year for which they are levied.

Under the modified accrual basis of accounting,expenditures are generally recognized in the period that goods and services are received,but there are a number of exceptions to that rule.

Responses:

False

True

Correct Answer:

Premises:

Responses:

To determine whether they have obtained sufficient revenues to cover their expenses,funds that account for governmental business-type activities use the modified accrual basis of accounting.

Basis of accounting refers to the timing of the recognition of assets,liabilities,revenues and expenses or expenditures.The basis of accounting facilitates what one is trying to measure.

Depreciation of capital assets is not recognized as an expense in a Special Revenue Fund,but it is recognized as an expense in an Internal Service Fund.

Property taxes are recognized as revenues in governmental type funds to the extent that they are collected in the year for which they are levied.

Under the modified accrual basis of accounting,expenditures are generally recognized in the period that goods and services are received,but there are a number of exceptions to that rule.