Under the Modified Accrual Basis of Accounting for the General

question 15

Multiple Choice

Under the modified accrual basis of accounting for the general fund,expenditures should be recognized in the period in which the related liability is:
I.paid.
II.incurred.

• A)I only
• B)II only
• C)Both I and II
• D)Neither I nor II

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Definitions:

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate costs more accurately.

Variances

The difference between planned or expected financial outcomes and the actual results, often analyzed in budgeting and cost management.

Performance Reports

Documents that compare actual work performance against planned or expected outcomes.

Variable Cost

A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.