Which Statement Is Not Correct

question 1

Multiple Choice

Which statement is not correct?

• A) Governmental funds account for expenditures of financial resources rather than matching revenues and expenses.
• B) The Encumbrances Outstanding account should be reversed and closed at the end of a fiscal year.
• C) Revenues from licenses and permit fees are recognized when received in cash if using the modified accrual basis of accounting for governmental funds.
• D) A fund is an independent accounting entity composed of cash and other financial resources, segregated for the purpose of carrying on specific activities and objectives.
• E) Commitments for purchase orders are recorded as expenses.

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Definitions:

Horizontal Communication

The exchange of information between peers within the same level of an organization, facilitating collaboration and team coordination.

Staff

Refers to all the employees of an organization or a specific group within.

Coworkers

Individuals working together in the same organization, sharing responsibilities or projects.

Manufacturing Company

An enterprise engaged in the industrial production of goods through the processing of raw materials.