The Accrual Basis of Accounting Applicable to Proprietary Fund Types

question 64

Multiple Choice

The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when

• A) Earned.
• B) Collected in cash.
• C) Authorized by the budget ordinance.
• D) Measurable and available.

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Definitions:

Revenues

The cumulative revenue a firm earns from its sales of products or provision of services over a specified period.

Selling Services

The act of offering intangible products or skills to customers in exchange for payment.

Debit Side

The left side of an accounting ledger, where debit entries are recorded, typically indicating increases in assets or expenses, or decreases in liabilities or revenues.

Account

An accounting form used to record the increases and decreases in each financial statement item.