What Basis of Accounting Is Used by Proprietary Funds

question 17

Multiple Choice

What basis of accounting is used by proprietary funds?

• A)Modified accrual accounting
• B)Accrual accounting
• C)Cash basis accounting
• D)Fair value accounting

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Definitions:

Nominal Interest

The interest rate on a loan or investment without adjusting for inflation.

Real Interest Rates

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true yield on savings.

Rental Cost

The price paid for the temporary use of a good, service, or property owned by another.

Private Investment

Financial resources allocated by individuals or entities into private sector projects or companies aiming to earn returns.