Chapter 1, Problem 1.5E

Legally adopted budgets of governmental funds are

1. a. fixed-dollar budgets, which establish expenditure limits that are not to be exceeded.
2. b. fixed budgets that cannot be modified during the budget year.
3. c. flexible budgets in which the expenditure limits are automatically modified to reflect larger than budgeted levels of various services.
4. d. always adopted using the same basis of accounting required by GAAP.