ExpertHard1 markMultiple Choice
CPA · Question 44 · Area III: State & Local Governments
A City levies $1,000,000 in property taxes for the year ending Dec 31. <br/>- Collected during year: $800,000<br/>- Collected Jan 1 - Feb 28 (next year): $100,000<br/>- Collected Mar 1 - Mar 31 (next year): $50,000<br/>- Estimated uncollectible: $50,000<br/><br/>What amount of Revenue should be recognized in the General Fund (Modified Accrual)?
A City levies $1,000,000 in property taxes for the year ending Dec 31. <br/>- Collected during year: $800,000<br/>- Collected Jan 1 - Feb 28 (next year): $100,000<br/>- Collected Mar 1 - Mar 31 (next year): $50,000<br/>- Estimated uncollectible: $50,000<br/><br/>What amount of Revenue should be recognized in the General Fund (Modified Accrual)?
Answer options:
A.
$800,000
B.
$900,000
C.
$950,000
D.
$1,000,000
How to approach this question
Modified Accrual Revenue = Measurable + Available. Available = Collected within current period + 60 days after.
Full Answer
B.$900,000✓ Correct
B
Revenue recognized = $800,000 (current) + $100,000 (within 60 days) = $900,000. The $50,000 collected in March is recorded as a Deferred Inflow of Resources.
Common mistakes
Including amounts collected after 60 days.
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