Under the Modified Accrual Basis of Accounting Used by a Governmental

question 32

Multiple Choice

Under the modified accrual basis of accounting used by a governmental entity, investment revenues for the current period should include

• A)only interest and dividends received.
• B)all interest and dividends received during the period plus all accruals of interest and dividends earned.
• C)all interest and dividends received plus gains and losses on securities that were sold during the period.
• D)all interest and dividends received, all gains and losses on securities sold and all changes in market values on securities held in the portfolio at year-end.

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Definitions:

Money Supply Growth Rate

The rate at which the amount of money available in an economy is growing, influencing inflation and economic stability.

Phillips Curve

A concept suggesting an inverse relationship between the rate of inflation and the rate of unemployment within an economy.

Desired Expenditures

The amount of spending households, firms, and the government wish to make, usually influenced by economic conditions and policies.

Inflation

A persistent upsurge in the average cost of goods and services across an economy over time.