The Modified Accrual Basis of Accounting Is Used in Presenting

question 13

Multiple Choice

The modified accrual basis of accounting is used in presenting the fund financial statements of the governmental funds because

• A)it is the superior method of accounting for the economic resources of any entity.
• B)it provides information as to the extent the entity achieved interperiod equity.
• C)it is budget oriented while facilitating comparisons among entities.
• D)it results in accounting measurements based on the substance of transactions.

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Definitions:

Forward Buying

Forward buying is a purchasing strategy where buyers purchase larger quantities than immediately needed to take advantage of lower prices or to ensure supply against future shortage.

Market Growth

The increase in the demand or sales of a particular product or service within a specific industry or market over time.

Stealing Share

A business strategy aimed at gaining market share from competitors through tactics like competitive pricing, improved quality, or marketing.

Marginal Subcontracting Cost

The additional cost incurred for subcontracting one more unit of production or service.