Q1

Internal service funds use cash basis of accounting in order to determine full cost that is both operating costs and capital costs, because this fund type make user charges for governmental employees.

a.

TRUE

b.

FALSE

Under the Modified accrual basis of accounting revenues are recognized when it is earned.

a.

TRUE

b.

FALSE

An encumbrance is considered a liability, It represents resources which are now committed for a specified use and which are no longer available for other expenditures.

a.

False

b.

True