Question

Under the modified accrual basis of accounting for a governmental unit, revenues should be recognized in the accounting period in which they:____.
A. Are earned and become measurable.
B. Are collected Become available and measureable.
C. Become available and earned.
D. Are earned and collected.

Answer 1

Answer:

The answer is B.

Explanation:

Modified accrual basis of accounting combine both the characteristics of accrual basis and cash basis together.

Revenue is only recognize in the income statement when it is measurable(must be reasonably estimated) and available to finance the firm's expenditure.