The accounting system of Barb City is organized and operated on a fund basis. Among the types of funds used are a general fund, a special revenue fund, and an enterprise fund.

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a. Explain the basic differences in revenue recognition between the accrual basis of accounting and the modified accrual basis of accounting in relation to governmental accounting.

b. What basis of accounting should be used for each of the following funds: (1) general fund. (2) special revenue fund, and (3) enterprise fund?