Which of the Following Is the Appropriate Basis of Accounting

question 64

Multiple Choice

Which of the following is the appropriate basis of accounting for a custodial fund?

• A) Cash basis.
• B) Modified cash basis.
• C) Accrual basis.
• D) Modified accrual basis.

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Definitions:

Adjusting Entries

Journal entries made in the accounting records to correct or update financial information before the preparation of financial statements.

Unearned Revenue

Money received by an entity for goods or services yet to be delivered or rendered, recognized as a liability until the obligation is fulfilled.

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances before the preparation of financial statements.

Unbilled Consulting Revenue

Unbilled consulting revenue refers to earnings from consulting services that have been delivered but not yet invoiced to the client.