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1)The modified accrual accounting is required for governmental accounting by GASB and presumes that expenditures are recorded when the resource is acquired, a legal obligation to pay exists, and the payment will come from available resources. (TRUE/FALSE)

1)The modified accrual accounting is required for governmental accounting by GASB and presumes that expenditures are recorded when the resource is acquired, a legal obligation to pay exists, and the payment will come from available resources. (TRUE/FALSE)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1)The modified accrual accounting is required for governmental accounting by GASB and presumes that expenditures are recorded when the resource is acquired, a legal obligation to pay exists, and the payment will come from available resources. (TRUE/FALSE) 2)IU manages many dorms and apartment buildings on its Bloomington campus. Suppose the university posts "Monthly Rent for May 2020" to students' bursar accounts on May 23. Students need to pay rent by June 10. Assume all students pay their rent between June 3 and June 10. Can IU record these rent payments as revenue for May under a cash accounting basis? (YES/NO)
Transcribed Image Text:1)The modified accrual accounting is required for governmental accounting by GASB and presumes that expenditures are recorded when the resource is acquired, a legal obligation to pay exists, and the payment will come from available resources. (TRUE/FALSE) 2)IU manages many dorms and apartment buildings on its Bloomington campus. Suppose the university posts "Monthly Rent for May 2020" to students' bursar accounts on May 23. Students need to pay rent by June 10. Assume all students pay their rent between June 3 and June 10. Can IU record these rent payments as revenue for May under a cash accounting basis? (YES/NO)
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