Which Statement Is Not Correct

question 61

Multiple Choice

Which statement is not correct?

• A) Governmental funds account for expenditures of financial resources rather than matching revenues and expenses.
• B) The Fund Balance Reserved for Encumbrances account is not 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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