When Reporting on the General Fund in the Fund Financial

question 37

Multiple Choice

When reporting on the General Fund in the fund financial statements,what is the general principle regarding the accrual of sales taxes collected by merchants but not yet remitted to the taxing government?

• A)sales taxes should be recognized only if received by the state by year end
• B)sales taxes should be recognized when the merchant makes the sale provided taxes are received early enough in the following year to finance expenditures of the period covered by the statements
• C)sales taxes should be accrued provided they are received within 15 days after the end of the accounting period
• D)sales taxes should be accrued based on an estimate of amounts received by merchants but not yet remitted to the state,regardless of when the taxes are remitted