Which of the Following Accounting Methods Is Most Consistent with the Budgetary

question 19

Multiple Choice

Which of the following accounting methods is most consistent with the budgetary spending limits that governmental managers must manage?

• A)Disbursement basis
• B)Expenditure basis
• C)Accrual basis
• D)Cash basis

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Definitions:

Fair Value Hedge

A hedge that protects against changes in the fair value of an asset or liability or an unrecognized firm commitment.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Mexican Pesos

The currency of Mexico, represented by the symbol $ or MXN, used for all financial transactions within the country.

Forward Contract

A customized contractual agreement to buy or sell an asset at a specified price on a future date, used to hedge against price movements.