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Under the modified accrual basis of accounting, revenues cannot be recognized

Under the modified accrual basis of accounting, revenues cannot be recognized
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Government and Not-for-Profit Accounting
Granof, Wardlow, Khumawala, Government and Not-for-Profit Accounting: Concepts & Practices (5th edition)
MULTIPLE CHOICE

Exercise 4-1 (E. 4-1) Select the best answer.

1. Under the modified accrual basis of accounting, revenues cannot be recognized

2. ‘‘Available’’ (as in ‘‘measurable and available’’) means

3. Property taxes are an example of

4. To be considered ‘‘available,’’ property taxes must have been collected either during the government’s fiscal year or within

5. For its fiscal year ending September 30, 2011, Twin City levied $500 million in property taxes. It collected taxes applicable to fiscal 2011 as follows (in millions):
June 1, 2010, through September 30, 2010 $ 20 October 1, 2010, through September 30,
2011 $440 October 1, 2011, through November 30, 2011 $15 December 2011 $4
The city estimates that $10 million of the outstanding balance will be uncollectible. For the fiscal year ending September 30, 2011, how much should Twin City recognize in property tax revenue (in millions) in its general fund?

6. Assume the same facts as in the previous example. How much should Twin City recognize in property tax revenue (in millions) in its government-wide statement of activities?

7. Central City was awarded two state grants during its fiscal year ending September 30, 2011: a $2 million block grant that can be used to cover any operating expenses incurred during fiscal 2012, and a $1 million grant that can be used any time to acquire equipment for its police department. For the year ending September 30, 2011, Central City should recognize in grant revenue in its funds statements (in millions):

8. Assume the same facts as in the previous example. How much should the city recognize in grant revenue in its government-wide statements?

9. Assuming that a government will collect its sales taxes in sufficient time to satisfy the ‘‘available’’ criterion, it would ordinarily recognize revenue from sales taxes in its governmental fund statements

10. Assuming that a government will collect its sales taxes in sufficient time to satisfy the ‘‘available’’ criterion, it would ordinarily recognize revenue from sales taxes in its government-wide statements

 

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