ExpertEasy1 markMultiple Choice
CPA · Question 22 · Area III: State & Local Governments
Under GASB standards, which of the following funds uses the economic resources measurement focus and the accrual basis of accounting?
Under GASB standards, which of the following funds uses the economic resources measurement focus and the accrual basis of accounting?
Answer options:
A.
General Fund
B.
Enterprise Fund
C.
Capital Projects Fund
D.
Debt Service Fund
How to approach this question
Memorize: Governmental Funds (GRaSPP) = Modified Accrual. Proprietary (SE) & Fiduciary (CIPPOE) = Full Accrual.
Full Answer
B.Enterprise Fund✓ Correct
B
Proprietary funds (Enterprise and Internal Service Funds) and Fiduciary Funds use the economic resources measurement focus and full accrual basis of accounting, similar to for-profit business entities. Governmental funds use the current financial resources measurement focus and modified accrual.
Common mistakes
Assuming all government funds use modified accrual.
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