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Governments Use Modified Accrual Accounting to Determine When Transactions and Events

question 64

Essay

Governments use modified accrual accounting to determine when transactions and events will be recognized in the financial statements of the governmental fund types.
a.) What is modified accrual accounting and how does it affect revenue recognition for the following types of revenue: property taxes; sales and income taxes; fines; grants of all types; and investment income.
b.) In your opinion is modified accrual accounting the best basis of accounting for governments? Why or why not?


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