A City with a 12/31 Fiscal Year-End Requires That Restaurants $10 / 1 / 13 - 9 / 30 / 14$

question 44

Multiple Choice

A city with a 12/31 fiscal year-end requires that restaurants buy a license,renewable yearly.Proceeds of the license fees are intended to pay the salaries of inspectors in the health department.Licenses are issued for a fiscal year from October 1 to September 30.During 2014,cash collections related to licenses were as follows Licenses issued during 2013 for the $10 / 1 / 13 - 9 / 30 / 14$ fiscal year $\quad$$\quad$$\$ 30$
Licenses issued during 2014 for the $10 / 1 / 14 - 9 / 30 / 15$ fiscal year $\quad$$\quad$ $\$ 180$ It is anticipated that during 2015 the amount collected on licenses for the 10/1/14-9/30/15 fiscal year will be $45.In September 2013 the amount collected related to 10/1/13-9/30/14 licenses was $144.What amount should be recognized as revenue in the fund financial statements for the fiscal year ended 12/31/14?

• A)$180.
• B)$183.
• C)$210.
• D)$225.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is used internationally.

U.S.GAAP

United States Generally Accepted Accounting Principles, which is a framework of accounting standards, principles, and procedures used in the U.S.

Fair Value

An estimate of the market value of an asset or liability based on current market prices or valuations of similar transactions.

Long-Term Construction Projects

Large scale construction endeavors that span over a long period, often requiring special accounting methods like the percentage-of-completion method for revenue recognition.