Under the Modified Accrual Basis of Accounting, License Fees, Permits

question 20

Multiple Choice

Under the modified accrual basis of accounting, license fees, permits, and other miscellaneous revenue are generally recognized for practical purposes

• A) when cash is received.
• B) when the exchange takes place.
• C) over the period during which the government obtains an enforceable legal claim.
• D) when related expenditures are incurred.

---

Definitions:

Annual Coupon Bond

A bond that pays interest to the holder annually until its maturity, at which point the principal is repaid.

Real Rate

The interest rate that has been adjusted for inflation, reflecting the true cost of borrowing or real yield on an investment.

Inflation

The rate at which the comprehensive cost of goods and services inflates, sapping the buying power.

Total Percentage Return

The total return on an investment, including both capital gains and dividends, expressed as a percentage of the initial investment.