Question
1A. It is most accurate to look at modified accrual more as a modification of cash. In cash accounting we record revenues as they are
1A. It is most accurate to look at modified accrual more as a modification of cash. In cash accounting we record revenues as they are collected; in accrual accounting, we record revenues as they are earned. In modified accrual, we do use the accrual method, but if revenues are not collected within 60 days of year-end, they are not included. Why do we use 60 days?
1B. Small Businesses usually have more transactions than a government does, even in the general fund. Some funds have less than 24 transactions a year. Most townships have far fewer activities than small businesses. This brings up a good point, small businesses and small governments make up the bulk of accounting. While states and publicly traded companies are challenging, they are a smaller percentage of the activity. What does this say about Small GAAP and GASB?
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