Under the Modified Accrual Basis of Accounting, Expenditures Should Be

question 76

Multiple Choice

Under the modified accrual basis of accounting, expenditures should be recognized when:

• A) they are authorized by the budget ordinance.
• B) they are paid.
• C) they are measurable and can be financed by the revenues of the current period.
• D) the fund liability is incurred.

Recognize the treatment of sales taxes in financial records.

Understand the adjustments for returns and their effect on inventory and revenue accounts.

Differentiate between types of invoices and their roles in accounting.

Grasp the comprehensive framework of revenue recognition and its steps.

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Definitions:

Privity of Reversion

A legal concept relating to the rights of individuals who have a future interest in property currently possessed by another.

Distrain

The right to seize someone's property in order to compel payment of debts or obligations.

Default

Failure to fulfill a legal obligation or agreement, commonly referring to the inability to make timely payments on a loan.

Payment of Rent

The act of providing monetary compensation typically on a monthly basis, by a tenant to a landlord, for the use of property such as residential housing or commercial space.